Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128d.jpg" align="left" border="0" height="265" width="353">
German wholesale sales growth is lagging in new quarter. Real
ex-auto sales remain challenged. 
 

Europe has been spinning out mixed economic signals. While
there has been a lot of angst exhibited over the strong euro, the
German finance minister has embraced the strength and ECB members say a
strong currency is &#8216;the right sort of problem to have,&#8217; better than the
other one. 
 

In the wake of this strength EMU economic reports have become
uneven. While orders have showed weakness across countries, other
reports have showed some resilience, notably the IFO survey in Germany
and an INSEE morale survey for industry in France. The most recent
German consumer sentiment reading from GFK shows a weaker December is
in store. But there has been no full scale weakening. 
 

German wholesalers fit not the mixed mode. Overall sales are
withering in the new quarter down by 0.1% Q/Q for an annual rate drop
of 0.7% and lower from the year ago three month period by 1.6% in real
terms. Ex autos sales are still eroding. The German VAT tax hike has
wreaked havoc with German retail/wholesale trends so far this year. Now
with the euro soaring, a new challenge is in gear. The strong euro does
not appear to have knocked the wind out of the German economy but it
has been added to list of headwinds that the economy faces. Labor
unrest and possibly more ECB rate hikes, especially in the wake of such
strong ongoing money and loan growth in EMU, also are on that list.
Despite it all German wholesale sales are only moderately weak. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="4" scope="col"> One
Month of Quarter Complete</th>
</tr>
<tr>
<th colspan="4" scope="col">Quarterly
showing</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>%Q/Q</td>
<td>%-Saar</td>
<td>%Q/Yr Ago</td>
</tr>
<tr>
<td class="firstcol">Nominal</td>
<td>1.1%</td>
<td>5.5%</td>
<td>-19.8%</td>
</tr>
<tr>
<td class="firstcol">Real</td>
<td>-0.1%</td>
<td>-0.7%</td>
<td>-1.6</td>
</tr>
</tbody>
</table>
</body></html>

German wholesale sales growth is lagging in new quarter. Real ex-auto sales remain challenged. Europe has been spinning out mixed economic signals. While there has been a lot of angst exhibited over the strong euro, the German finance [...]

The German Condition...

Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128c.jpg" align="left" border="0" height="265" width="353">
Another low was reached by existing home sales last month. The
level of 4,970 (AR) about met expectations but was the lowest on record
which extends back only to 1999. The tally of single family home sales,
however, extends further back. For October, sales of existing single
family homes were unchanged from the September level, but it was the
lowest since early 1998. The figures are reported by the National
Association of Realtors at the time sales are closed.
Weakness in sales last month was led by a 4.4% decline in
sales out West. The count of single family sales in the West also fell
by 2.5% (-33.1% y/y) to the lowest level since late 1995. Sales in the
Midwest also were lower by 1.7% though single family sales were
unchanged m/m (-15.9% y/y). Total sales in the Northeast were unchanged
m/m as single family sales rose 3.1% (-13.2% y/y), the first gain in
three months. In the South sales were also unchanged m/m as were sales
of singe family units (-19.8% y/y).
The median price of an existing single family home fell for
the fourth straight month. The 1.2% decline pulled prices 5.1% lower
than last October and the price of an existing single family home fell
as well, down 1.4% m/m and 6.3% y/y.
The Economic Outlook and Central Bank Policy
is today' speech by Charles I. Plosser, President of the Federal
Reserve Bank of Philadelphia and it is available <a href="http://www.philadelphiafed.org/publicaffairs/speeches/plosser/2007/11-26-07_university-of-rochester.cfm">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col" colspan="2">October
2007</th>
<th scope="col">Sept 2007</th>
<th scope="col">Year Ago</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
<tr>
<th></th>
<th scope="col">Number</th>
<th scope="col">M/M%</th>
<th scope="col" colspan="5"></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Sales</td>
<td>4,970</td>
<td>-1.2%</td>
<td>5,030</td>
<td>6,270</td>
<td>6,510</td>
<td>7,075</td>
<td>6,727</td>
</tr>
<tr class="odd">
<td class="firstcol">Northeast</td>
<td>900</td>
<td>0.0</td>
<td>900</td>
<td>1,030</td>
<td>1,088</td>
<td>1,169</td>
<td>1,113</td>
</tr>
<tr>
<td class="firstcol">Midwest</td>
<td>1,180</td>
<td>-1.7</td>
<td>1,200</td>
<td>1,420</td>
<td>1,492</td>
<td>1,588</td>
<td>1,550</td>
</tr>
<tr class="odd">
<td class="firstcol">South</td>
<td>2,030</td>
<td>0.0</td>
<td>2,030</td>
<td>2,520</td>
<td>2,578</td>
<td>2,704</td>
<td>2,540</td>
</tr>
<tr>
<td class="firstcol">West</td>
<td>870</td>
<td>-4.4</td>
<td>910</td>
<td>1,300</td>
<td>1,353</td>
<td>1,616</td>
<td>1,575</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,370</td>
<td>0.0</td>
<td>4,370</td>
<td>5,708</td>
<td>5,677</td>
<td>6,182</td>
<td>5,958</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>207,800</td>
<td>-1.2</td>
<td>210,400</td>
<td>218,900</td>
<td>222,000</td>
<td>218,217</td>
<td>193,233</td>
</tr>
</tbody>
</table>
</body></html>

Another low was reached by existing home sales last month. The level of 4,970 (AR) about met expectations but was the lowest on record which extends back only to 1999. The tally of single family home sales, however, extends further [...]

Existing Home Sales Down and So Goes Prices

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<div align="left"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128b.jpg" width="353">
Orders for durable manufactured goods fell for the third consecutive month. The 0.4% slip in October followed a 1.4% slide in September that was only slightly revised. The latest slip contrasted with Consensus expectations for a 0.2% uptick.</div><div align="left">
Excluding the notably volatile transportation sector, orders fell an unexpected 0.7% although the September figure was revised to a 1.1% gain from the slight 0.3% increase reported initially. 
In the transportation sector, orders for aircraft &amp; parts fell 6.3% (+9.9% y/y) owing to a 5.2% (+10.6% y/y) decline in nondefense orders. Orders for motor vehicles &amp; parts also fell a hefty 1.4% (-3.7 y/y), down big for the third consecutive month. 
Orders for nondefense capital goods slid 3.1% helped lower by the drop in aircraft. Less aircraft, however, orders were also weak and posted a 2.3% decline. Three month growth in these orders fell to -1.0%, the weakest since early this year.</div><div align="left">
Fewer orders for communications equipment led the decline with a 22.6% (+3.3% y/y) plunge. Machinery orders also fell 1.7% and three month growth in these orders fell to -1.7%. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128a.jpg" width="353">
Also down were orders for computers &amp; related products which fell 15.2% (+11.9% y/y) after strong gains during the prior two months.</div><div align="left">
To the upside, primary metal orders rose 3.0% (5.0% y/y) but over the last three months the gain is a weaker 0.5%.Orders for electrical equipment, appliances and components recovered all of the prior month&#39;s decline with a 4.1% (1.8% y/y) gain. 
Overall shipments of durable goods rose 0.6% (1.4% y/y) after large declines during the prior two months. Less transportation shipments rose 0.6% (1.6% y/y) after two months of declines by a like amount. </div><div align="left">
Inventories of durable goods rose 0.2% (2.1% y/y) and less transportation rose 0.2% as well (1.2% y/y). 
Unfilled orders were firm again last month and rose 1.0% (17.9% y/y). Much of that strength has been due, however, to the strength in orders for aircraft. Less the transportation sector altogether unfilled orders rose 0.7% in October and the y/y gain is a lesser 9.3%.</div><div align="left">
Financial Markets and Central Banking, today&#39;s speech by Federal Reserve Board Vice ChairmanDonald L. Kohn at the Council on Foreign Relations, New York, New York, is available <a href="http://www.federalreserve.gov/newsevents/speech/kohn20071128a.htm"> here</a>.</div><div align="left">
Minutes of Board discount rate meetings, October 1 through October 31, 2007 from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/monetary20071127a1.pdf"> here</a>.</div>

<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/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-0.4%</td>
<td>-1.4%</td>
<td>1.9%</td>
<td>6.3%</td>
<td>9.9%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>-0.7%</td>
<td>1.1%</td>
<td>2.0%</td>
<td>7.6%</td>
<td>8.8%</td>
<td>7.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-3.1%</td>
<td>4.8%</td>
<td>-0.8%</td>
<td>10.6%</td>
<td>17.1%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.3%</td>
<td>1.2%</td>
<td>-2.4%</td>
<td>8.5%</td>
<td>11.1%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
</body>
</html>

Orders for durable manufactured goods fell for the third consecutive month. The 0.4% slip in October followed a 1.4% slide in September that was only slightly revised. The latest slip contrasted with Consensus expectations for a 0.2% [...]

U.S. Durable Goods Orders Down Big for Second Month

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<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128b.jpg" align="left" border="0" height="265" width="353">

Orders for durable manufactured goods fell for the third
consecutive month. The 0.4% slip in October followed a 1.4% slide in
September that was only slightly revised. The latest slip contrasted
with Consensus expectations for a 0.2% uptick.
</div>
<div align="left">
Excluding the notably volatile transportation sector, orders
fell an unexpected 0.7% although the September figure was revised to a
1.1% gain from the slight 0.3% increase reported initially. 

In the transportation sector, orders for aircraft &amp;
parts fell 6.3% (+9.9% y/y) owing to a 5.2% (+10.6% y/y) decline in
nondefense orders. Orders for motor vehicles &amp; parts also fell
a hefty 1.4% (-3.7 y/y), down big for the third consecutive month. 

Orders for nondefense capital goods slid 3.1% helped lower by
the drop in aircraft. Less aircraft, however, orders were also weak and
posted a 2.3% decline. Three month growth in these orders fell to
-1.0%, the weakest since early this year.
</div>
<div align="left">
Fewer orders for communications equipment led the decline with
a 22.6% (+3.3% y/y) plunge. Machinery orders also fell 1.7% and three
month growth in these orders fell to -1.7%. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128a.jpg" align="right" border="0" height="265" width="353">
Also down were orders for computers &amp; related products
which fell 15.2% (+11.9% y/y) after strong gains during the prior two
months.
</div>
<div align="left">
To the upside, primary metal orders rose 3.0% (5.0% y/y) but
over the last three months the gain is a weaker 0.5%.Orders for
electrical equipment, appliances and components recovered all of the
prior month's decline with a 4.1% (1.8% y/y) gain. 

Overall shipments of durable goods rose 0.6% (1.4% y/y) after
large declines during the prior two months. Less transportation
shipments rose 0.6% (1.6% y/y) after two months of declines by a like
amount. 
</div>
<div align="left">
Inventories of durable goods rose 0.2% (2.1% y/y) and less
transportation rose 0.2% as well (1.2% y/y). 

Unfilled orders were firm again last month and rose 1.0%
(17.9% y/y). Much of that strength has been due, however, to the
strength in orders for aircraft. Less the transportation sector
altogether unfilled orders rose 0.7% in October and the y/y gain is a
lesser 9.3%.
</div>
<div align="left">
Financial Markets and Central Banking, today's
speech by Federal Reserve Board Vice ChairmanDonald L. Kohn at the
Council on Foreign Relations, New York, New York, is available <a href="http://www.federalreserve.gov/newsevents/speech/kohn20071128a.htm">
here</a>.
</div>
<div align="left">
Minutes of Board discount rate meetings, October 1
through October 31, 2007 from the Federal Reserve Board can
be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/monetary20071127a1.pdf">
here</a>.
</div>


<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/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS
Classification</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-0.4%</td>
<td>-1.4%</td>
<td>1.9%</td>
<td>6.3%</td>
<td>9.9%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>-0.7%</td>
<td>1.1%</td>
<td>2.0%</td>
<td>7.6%</td>
<td>8.8%</td>
<td>7.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-3.1%</td>
<td>4.8%</td>
<td>-0.8%</td>
<td>10.6%</td>
<td>17.1%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.3%</td>
<td>1.2%</td>
<td>-2.4%</td>
<td>8.5%</td>
<td>11.1%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
Existing Home Sales Down and
SoGoes Prices 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 28, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128c.jpg" align="left" border="0" height="265" width="353">
Another low was reached by existing home sales last month. The
level of 4,970 (AR) about met expectations but was the lowest on record
which extends back only to 1999. The tally of single family home sales,
however, extends further back. For October, sales of existing single
family homes were unchanged from the September level, but it was the
lowest since early 1998. The figures are reported by the National
Association of Realtors at the time sales are closed.
Weakness in sales last month was led by a 4.4% decline in
sales out West. The count of single family sales in the West also fell
by 2.5% (-33.1% y/y) to the lowest level since late 1995. Sales in the
Midwest also were lower by 1.7% though single family sales were
unchanged m/m (-15.9% y/y). Total sales in the Northeast were unchanged
m/m as single family sales rose 3.1% (-13.2% y/y), the first gain in
three months. In the South sales were also unchanged m/m as were sales
of singe family units (-19.8% y/y).
The median price of an existing single family home fell for
the fourth straight month. The 1.2% decline pulled prices 5.1% lower
than last October and the price of an existing single family home fell
as well, down 1.4% m/m and 6.3% y/y.
The Economic Outlook and Central Bank Policy
is today' speech by Charles I. Plosser, President of the Federal
Reserve Bank of Philadelphia and it is available <a href="http://www.philadelphiafed.org/publicaffairs/speeches/plosser/2007/11-26-07_university-of-rochester.cfm">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col" colspan="2">October
2007</th>
<th scope="col">Sept 2007</th>
<th scope="col">Year Ago</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
<tr>
<th></th>
<th scope="col">Number</th>
<th scope="col">M/M%</th>
<th scope="col" colspan="5"></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Sales</td>
<td>4,970</td>
<td>-1.2%</td>
<td>5,030</td>
<td>6,270</td>
<td>6,510</td>
<td>7,075</td>
<td>6,727</td>
</tr>
<tr class="odd">
<td class="firstcol">Northeast</td>
<td>900</td>
<td>0.0</td>
<td>900</td>
<td>1,030</td>
<td>1,088</td>
<td>1,169</td>
<td>1,113</td>
</tr>
<tr>
<td class="firstcol">Midwest</td>
<td>1,180</td>
<td>-1.7</td>
<td>1,200</td>
<td>1,420</td>
<td>1,492</td>
<td>1,588</td>
<td>1,550</td>
</tr>
<tr class="odd">
<td class="firstcol">South</td>
<td>2,030</td>
<td>0.0</td>
<td>2,030</td>
<td>2,520</td>
<td>2,578</td>
<td>2,704</td>
<td>2,540</td>
</tr>
<tr>
<td class="firstcol">West</td>
<td>870</td>
<td>-4.4</td>
<td>910</td>
<td>1,300</td>
<td>1,353</td>
<td>1,616</td>
<td>1,575</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,370</td>
<td>0.0</td>
<td>4,370</td>
<td>5,708</td>
<td>5,677</td>
<td>6,182</td>
<td>5,958</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>207,800</td>
<td>-1.2</td>
<td>210,400</td>
<td>218,900</td>
<td>222,000</td>
<td>218,217</td>
<td>193,233</td>
</tr>
</tbody>
</table>
The German Condition... by <a href="/comment/Brusca.html">Robert
Brusca</a> November 28, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071128d.jpg" align="left" border="0" height="265" width="353">
German wholesale sales growth is lagging in new quarter. Real
ex-auto sales remain challenged. 
 

Europe has been spinning out mixed economic signals. While
there has been a lot of angst exhibited over the strong euro, the
German finance minister has embraced the strength and ECB members say a
strong currency is &#8216;the right sort of problem to have,&#8217; better than the
other one. 
 

In the wake of this strength EMU economic reports have become
uneven. While orders have showed weakness across countries, other
reports have showed some resilience, notably the IFO survey in Germany
and an INSEE morale survey for industry in France. The most recent
German consumer sentiment reading from GFK shows a weaker December is
in store. But there has been no full scale weakening. 
 

German wholesalers fit not the mixed mode. Overall sales are
withering in the new quarter down by 0.1% Q/Q for an annual rate drop
of 0.7% and lower from the year ago three month period by 1.6% in real
terms. Ex autos sales are still eroding. The German VAT tax hike has
wreaked havoc with German retail/wholesale trends so far this year. Now
with the euro soaring, a new challenge is in gear. The strong euro does
not appear to have knocked the wind out of the German economy but it
has been added to list of headwinds that the economy faces. Labor
unrest and possibly more ECB rate hikes, especially in the wake of such
strong ongoing money and loan growth in EMU, also are on that list.
Despite it all German wholesale sales are only moderately weak. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="4" scope="col"> One
Month of Quarter Complete</th>
</tr>
<tr>
<th colspan="4" scope="col">Quarterly
showing</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>%Q/Q</td>
<td>%-Saar</td>
<td>%Q/Yr Ago</td>
</tr>
<tr>
<td class="firstcol">Nominal</td>
<td>1.1%</td>
<td>5.5%</td>
<td>-19.8%</td>
</tr>
<tr>
<td class="firstcol">Real</td>
<td>-0.1%</td>
<td>-0.7%</td>
<td>-1.6</td>
</tr>
</tbody>
</table>
</body></html>

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071127i.jpg" width="353">
France&#146;s business climate improved to an index reading of 110 in November from 108 in October. The gain, like the rise in the German IFO index was unexpected. Still the index has moderated as the level reading has flattened out and the percentage gain reading shows a slowdown is still in effect. The climate index sits firmly at the 74th percentile mark of its range. The production trends and likely trend readings are also firm in their ranges in their 59th and 79th range percentiles, respectively. Orders are in about the same relative standing in the 74th percentile of their range and foreign orders are in the 69th percentile of their range.. 
The bounce in the French and German industrial sentiment gauges in November is curious especially as the euro moves higher and there have been concerns voiced of what a strong euro might do to growth. Still the rises in these two industrial gauges were small and they have not reversed the trends to weaker readings that had been in force. A stronger exchange rate is a good thing in many respects since it increases purchasing power and helps to fight off inflation. But so far in EMU the inflation numbers have stayed troublesome and even gotten worse, at least they have for Germany. 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
INSEE Industry Survey
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2">Since Jan 1990</td>
<td colspan="4">Since Jan 1990</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>Percentile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr>
<td class="firstcol">Climate</td>
<td>110</td>
<td>108</td>
<td>109</td>
<td>109</td>
<td>74.0</td>
<td>40</td>
<td>123</td>
<td>73</td>
<td>50</td>
<td>101</td>
</tr>
<tr class="even">
<td colspan="11">Production</td>
</tr>
<tr>
<td class="firstcol">Recent Trend</td>
<td>3</td>
<td>10</td>
<td>6</td>
<td>11</td>
<td>59.8</td>
<td>78</td>
<td>44</td>
<td>-58</td>
<td>102</td>
<td>-6</td>
</tr>
<tr>
<td class="firstcol">Likely trend</td>
<td>43</td>
<td>34</td>
<td>32</td>
<td>33</td>
<td>79.2</td>
<td>6</td>
<td>63</td>
<td>-33</td>
<td>96</td>
<td>7</td>
</tr>
<tr class="even">
<td colspan="11">Orders/Demand</td>
</tr>
<tr>
<td class="firstcol">Orders &amp; Demand</td>
<td>3</td>
<td>-1</td>
<td>1</td>
<td>1</td>
<td>74.7</td>
<td>30</td>
<td>25</td>
<td>-62</td>
<td>87</td>
<td>-15</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders &amp; Demand</td>
<td>4</td>
<td>3</td>
<td>10</td>
<td>8</td>
<td>69.7</td>
<td>51</td>
<td>31</td>
<td>-58</td>
<td>89</td>
<td>-11</td>
</tr>
<tr class="even">
<td colspan="11">Prices</td>
</tr>
<tr>
<td class="firstcol">Likely Sales Prices Trend</td>
<td>9</td>
<td>9</td>
<td>13</td>
<td>11</td>
<td>68.1</td>
<td>29</td>
<td>24</td>
<td>-23</td>
<td>47</td>
<td>0</td>
</tr>
</tbody>
</table>
</body>
</html>

Frances business climate improved to an index reading of 110 in November from 108 in October. The gain, like the rise in the German IFO index was unexpected. Still the index has moderated as the level reading has flattened out and [...]

Business Climate Perks up in France

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071127h.jpg" align="left" border="0" height="265" width="353">
The overall IFO business sentiment index rose to 104.2 in
November from 103.9 in October. Current conditions improved to 110.4
from 109.6. But expectations slipped to 98.3 from 98.6. Even so the
table below shows that the growth of the various indexes is slipping
further. The Biz climate index, though higher on the month, is 2.5%
lower year/year worse off than in October. The current conditions index
has fallen more year/year as well. Business Expectations are off by 2%,
their worst year/year drop so far. 

The graph speaks to sectors. Retailing is weakening. Services
are flattening. Manufacturing actually picked up in the month, but not
by a lot. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">IFO Survey:
Germany </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="5">Percent: Yr/Yr</td>
<td colspan="4">Index Numbers</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Nov 07</td>
<td>Oct 07</td>
<td>Sep 07</td>
<td>Aug 07</td>
<td>Jul 07</td>
<td>Current</td>
<td>Average</td>
<td>Curr/Avg</td>
<td>%tile</td>
</tr>
<tr>
<td class="firstcol">Biz Climate</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-1.5%</td>
<td style="color: red;">-0.9%</td>
<td>0.7%</td>
<td>0.8%</td>
<td>104.2</td>
<td>95.8</td>
<td>108.8%</td>
<td>81.0%</td>
</tr>
<tr>
<td class="firstcol">Current Situation</td>
<td style="color: red;">-3.1%</td>
<td style="color: red;">-2.1%</td>
<td style="color: red;">-1.3%</td>
<td>2.5%</td>
<td>2.4%</td>
<td>110.4</td>
<td>94.9</td>
<td>116.3%</td>
<td>84.8%</td>
</tr>
<tr>
<td class="firstcol">Biz Expectations: Next 6-Mos</td>
<td style="color: red;">-2.0%</td>
<td style="color: red;">-0.7%</td>
<td style="color: red;">-0.4%</td>
<td style="color: red;">-1.1%</td>
<td style="color: red;">-0.9%</td>
<td>98.3</td>
<td>96.7</td>
<td>101.6%</td>
<td>67.3%</td>
</tr>
</tbody>
</table>
</body></html>

The overall IFO business sentiment index rose to 104.2 in November from 103.9 in October. Current conditions improved to 110.4 from 109.6. But expectations slipped to 98.3 from 98.6. Even so the table below shows that the growth of [...]

German Indexes Show Some Unexpected Life…but not That Much

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071127f.jpg" width="353">
On average, retail gasoline prices last week held at the prior period&#39;s level of $3.10 per gallon, according to the US Department of Energy survey.
Divided by consumer prices other than energy, these gasoline prices are just below the high reached in 1981.
Yesterday, prices for spot WTI crude oil stood at $97.71 per barrel, down slightly from last week&#39;s average.
In perhaps a favorable sign for home heating bills this season, natural gas prices continued the move sideways at the high end of the recent $6.5 - $7.5 per mmbtu range (-0.3% y/y).
Gold prices continued to hover around the $800 per ounce level and the level surpassed the previous record price reached in early 1980.
Oil Shocks and Price Stability from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/mt/20071201/cover.pdf">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/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">11/26/07</th>
<th scope="col">11/19/07</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Retail Gasoline ($ per Gallon)</td>
<td>3.10</td>
<td>3.10</td>
<td>37.9%</td>
<td>2.57</td>
<td>2.27</td>
<td>1.85</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>98.83</td>
<td>91.18</td>
<td>70.3%</td>
<td>61.11</td>
<td>58.16</td>
<td>41.78</td>
</tr>
<tr class="odd">
<td class="firstcol">Gold: Handy &amp; Harmon ($ per Troy Oz.)</td>
<td>$795.50</td>
<td>$804.25</td>
<td>27.4%</td>
<td>628.70</td>
<td>$507.40</td>
<td>$443.40</td>
</tr>
</tbody>
</table>
</body>
</html>

On average, retail gasoline prices last week held at the prior period's level of $3.10 per gallon, according to the US Department of Energy survey. Divided by consumer prices other than energy, these gasoline prices are just below the [...]

Gasoline Held Above $3.00 per Gallon

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071127e.jpg" width="353">
Chain store sales dipped 0.1% last week after posing a 0.8% rise during the prior week, according to the International Council of Shopping Centers (ICSC)-UBS.
Despite the weak performance during Thanksgiving week, sales for the month of November rose 0.4% from the October average which fell 0.8% from September.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071127g.jpg" width="353">
The ICSC-UBS 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.
The leading indicator of chain store sales from ICSC-UBS fell 0.1% (-1.1% y/y) for the second weekly decline.

<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">11/24/07</th>
<th scope="col">11/17/07</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>478.2</td>
<td>478.8</td>
<td>2.5%</td>
<td>3.3%</td>
<td>3.6%</td>
<td>4.7%</td>
</tr>
</tbody>
</table>


</html>

Chain store sales dipped 0.1% last week after posing a 0.8% rise during the prior week, according to the International Council of Shopping Centers (ICSC)-UBS. Despite the weak performance during Thanksgiving week, sales for the month [...]

U.S. Chain Store Sales Dipped

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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Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

250501Z1.jpg

**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

250501Z2.jpg

**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

250501Z3.jpg

**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

250501Z4.jpg

**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

250501Z5.jpg

**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

250501Z6.jpg

Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

Charts of the Week: Tariff Truce, Tenuous Trust

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.

250430P1.jpg

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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.

Economy in Brief: November 2007

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The German Condition...

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