Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041223d.jpg" width="353">
Durable goods orders rebounded 1.6% following a 0.9% decline in October that was twice the advance indication. The Consensus expectation had been for a 0.6% gain. Less transportation, orders fell 0.8% (+11.8% y/y) and added to a 1.3% decline in October.
Transportation equipment orders rose 8.2% reflecting a 41.9% spurt in aircraft &amp; parts orders. Primary metals orders rose 3.9% (+23.6% y/y) but orders for fabricated metals eased 0.4% (+12.5% y/y).
Nondefense capital goods orders surged 8.1% m/m led by a 64.2% jump in aircraft. Excluding aircraft, orders rose 1.8% and recouped about half of the decline in October. A 4.6% (9.8% y/y) rise in orders for electrical equipment &amp; appliances led the gain, however, that was offset by a 4.2% decline (+12.6% y/y) in orders for computers &amp; electronic products, off for the second consecutive month. Machinery orders fell as well by 3.3% (+16.3% y/y).
Unfilled orders rose 1.2% (9.2% y/y), double the gain in October. Shipments fell for the second month in the last three so the rise in unfilled orders pulled the ratio of backlogs to shipments up sharply.
Inventories of durable goods surged 1.0% (8.3% y/y) after the 0.9% October gain which was revised up sharply. The inventory to shipments ratio rose to its highest level in a year.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041223b.jpg" width="353"><img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041223c.jpg" width="353">

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<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">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>1.6%</td>
<td>-0.9%</td>
<td>9.7%</td>
<td>2.6%</td>
<td>-1.7%</td>
<td>-10.5%</td>
</tr>
<tr>
<td class="firstcol">Nondefense Capital Goods</td>
<td>8.1%</td>
<td>-3.4%</td>
<td>21.2%</td>
<td>5.6%</td>
<td>-7.2%</td>
<td>-15.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Excluding Aircraft</td>
<td>1.8%</td>
<td>-4.1%</td>
<td>14.3%</td>
<td>6.6%</td>
<td>-7.1%</td>
<td>-12.9%</td>
</tr>
</tbody>
</table>
U.S. Personal Income Rebounded 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 23, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041223e.jpg" width="353">
Personal income rose a moderate 0.3% last month following the unrevised 0.6% spurt in October. Consensus expectations had been for a 0.2% rise.
The gain in wages &amp; salaries eased to 0.2% (+4.6% y/y) after the 0.6% surge in October. Factory sector wages eked out a 0.1% (1.1% y/y) gain after falling 0.1% the prior month.
Personal disposable income rose 0.3% (4.9% y/y), half the gain in October. Disposable income growth adjusted for inflation was stable m/m at 0.2% (2.2% y/y).
Personal consumption eased as well, growing 0.2%, one quarter the rise in October. A 2.4% decline in durable goods spending reflected a 3.4% m/m drop in total sales of light motor vehicles. Spending on nondurables also eased, up 0.4% after a 1.6% spike in October. However, services spending picked up and grew 0.6% (5.6% y/y), up from the 0.4%-0.5% range of the prior three months.
The PCE chain price index rose just 0.1%, reflecting the recent decline in gasoline prices. Less food &amp; energy prices rose 0.1% (1.5% y/y), the average for the last eight months.
&quot;Open Mouth Operations: A Swiss Case Study&quot; of a central bank&#39;s impact on the slope of the yield curve from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20050101/cover.pdf"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
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<td class="firstcol">Personal Income</td>
<td>0.3%</td>
<td>0.6%</td>
<td>4.9%</td>
<td>3.2%</td>
<td>1.8%</td>
<td>3.5%</td>
</tr>
<tr>
<td class="firstcol">Personal Consumption</td>
<td>0.2%</td>
<td>0.8%</td>
<td>6.1%</td>
<td>5.2%</td>
<td>4.6%</td>
<td>4.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Savings Rate</td>
<td>0.3%</td>
<td>0.1%</td>
<td>1.3%</td>
<td>1.4%</td>
<td>2.0%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">PCE Chain Price Index</td>
<td>0.1%</td>
<td>0.4%</td>
<td>2.6%</td>
<td>1.9%</td>
<td>1.4%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
U.S. Consumer Sentiment Rose Throughout December 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 23, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041223g.jpg" width="353">
The University of Michigan&#39;s reading of consumer sentiment for the full month of December rose to 97.1, up 4.6% from November. Consensus expectations had expected 95.7.
During the last ten years there has been a 75% correlation between the level of consumer sentiment and the y/y change in real PCE.
Consumers&#39; reading of current economic conditions rose 1.9% m/m but consumer expectations jumped 6.7%.
Sentiment amongst families earning less than $50,000 per year surged 9.5% m/m (5.3% y/y. Consumer sentiment amongst families earning more than $50,000 per year fell slightly m/m but rose 2.0% y/y.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.
&quot;Consumer Sentiment and the Media&quot; from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2004/el2004-29.pdf">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Dec</th>
<th scope="col">Mid-Dec</th>
<th scope="col">Nov</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
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<td class="firstcol">Consumer Sentiment</td>
<td>97.1</td>
<td>95.7</td>
<td>92.8</td>
<td>4.9%</td>
<td>95.2</td>
<td>87.6</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>106.7</td>
<td>106.3</td>
<td>104.7</td>
<td>10.0%</td>
<td>105.6</td>
<td>97.2</td>
<td>97.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer Expectations</td>
<td>90.0</td>
<td>88.8</td>
<td>85.2</td>
<td>1.2%</td>
<td>88.5</td>
<td>81.4</td>
<td>84.6</td>
</tr>
</tbody>
</table>
New Home Sales Softer 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 23, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041223f.jpg" width="353">
Sales of new single-family homes fell 12.0% to 1.125M last month from an upwardly revised level in October. Consensus estimates had been for a decline in sales to 1.200M. 
Sales fell throughout the country except in the South where they recovered 13.6% (11.5% y/y) following a sharp decline in October.
The median price of a new single family home slipped 8.2% m/m to $206,300 (-0.4% y/y).

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E904/@E90401/@E90401.HTM">Homes Sales (000s, AR)</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
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<td class="firstcol">New Single-Family</td>
<td>1,125</td>
<td>1,278</td>
<td>3.6%</td>
<td>1,089</td>
<td>976</td>
<td>907</td>
</tr>
</tbody>
</table>
Initial Unemployment Insurance Claims Bounced Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 23, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041223a.jpg" width="353">
Initial unemployment insurance claims bounced up 17,000 to 333,000 last week following the sharp 45,000 drop the week prior. Consensus expectations had been for 335,000 claims.
The latest figure is for the December survey period of nonfarm payrolls and claims fell a slight 2,000 (-0.6%) from the November survey period.
The four week moving average of initial claims rose to 340,000 (-7.6% y/y).
During the last ten years there has been a (negative) 82% correlation between the level of initial claims and the y/y change in payroll employment.
Continuing claims for unemployment insurance fell another 9,000 and added to the deepened 57,000 decline the prior week.
The insured rate of unemployment remained at 2.2%, where it&#39;s been since early October.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">12/18/04</th>
<th scope="col">12/11/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>333</td>
<td>316</td>
<td>-8.0%</td>
<td>402</td>
<td>404</td>
<td>406</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,721</td>
<td>-16.9%</td>
<td>3,531</td>
<td>3,570</td>
<td>3,018</td>
</tr>
</tbody>
</table>
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</html>

Durable goods orders rebounded 1.6% following a 0.9% decline in October that was twice the advance indication. The Consensus expectation had been for a 0.6% gain. Less transportation, orders fell 0.8% (+11.8% y/y) and added to a 1.3% [...]

U.S. Durable Goods Orders Rebounded

Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041222c.jpg" width="353">
Germany&#39;s IFO Business Climate Index rose 2.3 points in December to 96.2, the highest in eight months. Both the Business Situation (Current Conditions) and Expectations components participated in the gain. This was only the third month during all of 2004 that both increased at the same time. And only the second time that the two major German business surveys, the IFO and ZEW, had positive results simultaneously. This was also the largest monthly increase in the IFO since the winter of 2002. [Preliminary &quot;headline&quot; IFO data were reported last Friday, and more detail were published this morning.]
Is the upturn in the IFO of any consequence? Do German business executives express a realistic vision about business conditions they face?Apparently they do, at least where production is concerned. Over the last five years, there has been an 80% correlation between the Business Situation (current conditions) Index and the year-to-year percentage change in industrial production. This is helpful, since the survey takes place two months ahead of the publication of the production data; that is, while this is the December IFO survey, industrial production is available only through October.
Further, the business expectations component appears to be a reliable leading indicator of production growth. In the coincident month, expectations have only a 53% correlation with production. But if expectations behave as intended, they should point to the upcoming trend in production. We can check this easily in Haver DLXVG3; this software enables us to examine simple lead/lag relationships. Using &lt;CNTL&gt; together with the right or left arrow key, we can move the primary series back and forth across the graph; the correlation ratio displayed on the graph will change as we do that. This simple exercise shows that the expectations index has its maximum correlation with production growth, a respectable 81%, five months ahead of the production data. So company leaders appear to have a good grasp of the basic trends in their business, not only in the present, but also looking ahead several months.

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<th scope="col" class="firstcol">Indexes, 2000=100</th>
<th scope="col">Dec 2004</th>
<th scope="col">Nov 2004</th>
<th scope="col">Oct&nbsp; 2004</th>
<th scope="col">Year Ago</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
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</thead>
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<td class="firstcol">IFO Business Climate</td>
<td>96.2</td>
<td>94.1</td>
<td>95.3</td>
<td>96.9</td>
<td>91.7</td>
<td>89.4</td>
<td>92.1</td>
</tr>
<tr>
<td class="firstcol">IFO Business Situation (Current Conditions)</td>
<td>96.0</td>
<td>93.9</td>
<td>94.7</td>
<td>91.8</td>
<td>94.0</td>
<td>88.4</td>
<td>85.3</td>
</tr>
<tr class="odd">
<td class="firstcol">IFO Business Expectations</td>
<td>96.4</td>
<td>94.3</td>
<td>95.9</td>
<td>102.3</td>
<td>95.1</td>
<td>93.9</td>
<td>91.0</td>
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<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
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<td class="firstcol">Industrial Production, Yr/Yr % Chg</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>2.4</td>
<td>1.2</td>
<td>0.1</td>
<td>-1.2</td>
<td>-0.4</td>
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Germany's IFO Business Climate Index rose 2.3 points in December to 96.2, the highest in eight months. Both the Business Situation (Current Conditions) and Expectations components participated in the gain. This was only the third [...]

German IFO Improves in December

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041222b.jpg" width="353">
According to the Mortgage Bankers Association (MBA) Survey, mortgage applications were about unchanged last week but applications to refinance rose 5.7% after several weeks of decline.
Refi&#39;s rose despite an uptick in the effective interest rate on a conventional 30-year mortgage to 5.97% from 5.90% the prior week. The effective rate on a 15-year mortgage also rose to 5.43%.
Purchase applications fell 3.6% w/w but a 6.6% jump early in the month raised December&#39;s average so far 2.5% versus November. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">12/17/04</th>
<th scope="col">12/10/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
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<td class="firstcol">Total Market Index</td>
<td>689.3</td>
<td>689.0</td>
<td>9.2%</td>
<td>1,067.9</td>
<td>799.7</td>
<td>625.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>471.1</td>
<td>488.9</td>
<td>14.5%</td>
<td>395.1</td>
<td>354.7</td>
<td>304.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,958.2</td>
<td>1,852.4</td>
<td>2.6%</td>
<td>4,981.8</td>
<td>3,388.0</td>
<td>2,491.0</td>
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According to the Mortgage Bankers Association (MBA) Survey, mortgage applications were about unchanged last week but applications to refinance rose 5.7% after several weeks of decline. Refi's rose despite an uptick in the effective [...]

Total Mortgage Applications Unchanged but Refi's Rose

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041222a.jpg" width="353">
The &quot;final&quot; revision to US real GDP last quarter indicated 4.0% (AR) growth, up from the preliminary reading of 3.9% and the advance report of 3.7% growth. The Consensus expectation had been for no change at 3.9% growth.
The decline reported last month in corporate profits w/inventory (IVA) and capital consumption adjustments (CCAdj) was doubled to -4.8% (+5.8% y/y), the first quarterly decline since 1Q03. US nonfinancial corporate sector profits were little revised and rose 1.5% (18.8% y/y) but the decline in financial sector earnings was deepened to 19.8% (-17.0% y/y) from -13.4%.
Revisions to growth in domestic final demand were minimal. Personal consumption grew at a 5.1% (3.6% y/y) rate and business investment grew at a 13.0% rate (10.1% y/y). Residential investment grew at a 1.6% rate (8.0% y/y).
Slower accumulation of inventories subtracted slightly more than estimated earlier and twice the 0.5 percentage points estimated in the advance report and the drag from foreign trade was eased as import growth was lessened to 4.6% (11.1% y/y).
The estimate of price inflation was raised slightly to 1.4% (AR) as the PCE chain price index rose 1.3% (2.2% y/y) and the private fixed investment index rose 3.0% (3.0% y/y). A 5.1% gain in import prices held back the gain in GDP chain price index.
&quot;Productivity Gains Showing Up in Services&quot; from the Federal Reserve Bank of Dallas is available <a href="http://www.dallasfed.org/research/swe/2004/swe0406b.html"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained 2000$, % AR</a></th>
<th scope="col">3Q &#39;04 (Final)</th>
<th scope="col">3Q &#39;04 (Prelim.)</th>
<th scope="col">2Q &#39;04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>4.0%</td>
<td>3.9%</td>
<td>3.3%</td>
<td>4.0%</td>
<td>3.0%</td>
<td>1.9%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>-1.0%</td>
<td>-0.9%</td>
<td>0.8%</td>
<td>0.4%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>5.0%</td>
<td>4.9%</td>
<td>2.5%</td>
<td>3.6%</td>
<td>3.1%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-0.1%</td>
<td>-0.3%</td>
<td>-1.0%</td>
<td>-0.5%</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>4.9%</td>
<td>4.9%</td>
<td>3.5%</td>
<td>4.1%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>1.4%</td>
<td>1.3%</td>
<td>3.2%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>1.7%</td>
<td>2.4%</td>
</tr>
</tbody>
</table>
</body>
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The "final" revision to US real GDP last quarter indicated 4.0% (AR) growth, up from the preliminary reading of 3.9% and the advance report of 3.7% growth. The Consensus expectation had been for no change at 3.9% growth. The decline [...]

US 3Q GDP Revised Up

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041130a.jpg" width="353">
The &quot;final&quot; revision to US real GDP last quarter indicated 4.0% (AR) growth, up from the preliminary reading of 3.9% and the advance report of 3.7% growth. The Consensus expectation had been for no change at 3.9% growth.
The decline reported last month in corporate profits w/inventory (IVA) and capital consumption adjustments (CCAdj) was doubled to -4.8% (+5.8% y/y), the first quarterly decline since 1Q03. US nonfinancial corporate sector profits were little revised and rose 1.5% (18.8% y/y) but the decline in financial sector earnings was deepened to 19.8% (-17.0% y/y) from -13.4%.
Revisions to growth in domestic final demand were minimal. Personal consumption grew at a 5.1% (3.6% y/y) rate and business investment grew at a 13.0% rate (10.1% y/y). Residential investment grew at a 1.6% rate (8.0% y/y).
Slower accumulation of inventories subtracted slightly more than estimated earlier and twice the 0.5 percentage points estimated in the advance report and the drag from foreign trade was eased as import growth was lessened to 4.6% (11.1% y/y).
The estimate of price inflation was raised slightly to 1.4% (AR) as the PCE chain price index rose 1.3% (2.2% y/y) and the private fixed investment index rose 3.0% (3.0% y/y). A 5.1% gain in import prices held back the gain in GDP chain price index.
&quot;Productivity Gains Showing Up in Services&quot; from the Federal Reserve Bank of Dallas is available <a href="http://www.dallasfed.org/research/swe/2004/swe0406b.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained 2000$, % AR</a></th>
<th scope="col">3Q &#39;04 (Final)</th>
<th scope="col">3Q &#39;04 (Prelim.)</th>
<th scope="col">2Q &#39;04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>4.0%</td>
<td>3.9%</td>
<td>3.3%</td>
<td>4.0%</td>
<td>3.0%</td>
<td>1.9%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventory Effect</td>
<td>-1.0%</td>
<td>-0.9%</td>
<td>0.8%</td>
<td>0.4%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>5.0%</td>
<td>4.9%</td>
<td>2.5%</td>
<td>3.6%</td>
<td>3.1%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Trade Effect</td>
<td>-0.1%</td>
<td>-0.3%</td>
<td>-1.0%</td>
<td>-0.5%</td>
<td>-0.3%</td>
<td>-0.7%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>4.9%</td>
<td>4.9%</td>
<td>3.5%</td>
<td>4.1%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>1.4%</td>
<td>1.3%</td>
<td>3.2%</td>
<td>2.3%</td>
<td>1.8%</td>
<td>1.7%</td>
<td>2.4%</td>
</tr>
</tbody>
</table>
Total Mortgage Applications Unchanged but Refi's Rose 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 22, 2004


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041215c.jpg" width="353">
According to the Mortgage Bankers Association (MBA) Survey, mortgage applications were about unchanged last week but applications to refinance rose 5.7% after several weeks of decline.
Refi&#39;s rose despite an uptick in the effective interest rate on a conventional 30-year mortgage to 5.97% from 5.90% the prior week. The effective rate on a 15-year mortgage also rose to 5.43%.
Purchase applications fell 3.6% w/w but a 6.6% jump early in the month raised December&#39;s average so far 2.5% versus November. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">12/17/04</th>
<th scope="col">12/10/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>689.3</td>
<td>689.0</td>
<td>9.2%</td>
<td>1,067.9</td>
<td>799.7</td>
<td>625.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>471.1</td>
<td>488.9</td>
<td>14.5%</td>
<td>395.1</td>
<td>354.7</td>
<td>304.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,958.2</td>
<td>1,852.4</td>
<td>2.6%</td>
<td>4,981.8</td>
<td>3,388.0</td>
<td>2,491.0</td>
</tr>
</tbody>
</table>
</body>
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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041221d.jpg" width="353">
After becoming more confident in each month from June through October, Italian consumers lost confidence in the last two months. Overall consumer confidence fell 0.38% in December after having fallen 1.61% in November.
At a level of 103.5 (1980=100) in December, consumer confidence was only 4.05% above the low reached in January and February of this year and was 17.66% below the peak of June 2001.
Consumers viewed their personal economic situation positively, on balance, but while they were positive about their current situation, they were pessimistic regarding their future situation.
One factor that may have affected the confidence of the Italian consumer is the slow growth in employment. Employment data for the third quarter, released yesterday, show that total employment declined 0.03% in the quarter and was only 0.76% above the level of the third quarter of 2003. The growth in employment and the level of consumer confidence are shown in the attached chart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Consumer Confidence (1980=100)</th>
<th scope="col">Dec 04</th>
<th scope="col">Nov&nbsp;04</th>
<th scope="col">Dec 03</th>
<th scope="col">M/M %</th>
<th scope="col">Y/Y %</th>
<th scope="col">&nbsp;2004&nbsp;</th>
<th scope="col">&nbsp;2003&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2002&nbsp;</th>
<th scope="col">&nbsp; 2001&nbsp; &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Over all Indicator</td>
<td>103.5</td>
<td>103.9</td>
<td>104.9</td>
<td>-0.38</td>
<td>-1.32</td>
<td>101.5</td>
<td>106.2</td>
<td>115.8</td>
<td>122.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Gen. econ outlook</td>
<td>89.7</td>
<td>91.4</td>
<td>93.6</td>
<td>-1.86</td>
<td>-4.17</td>
<td>88.6</td>
<td>91.4</td>
<td>105.2</td>
<td>114.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Personal econ situation</td>
<td>109.9</td>
<td>109.4</td>
<td>110.0</td>
<td>0.46</td>
<td>-1.09</td>
<td>107.9</td>
<td>113.5</td>
<td>121.1</td>
<td>126.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current situation</td>
<td>102.1</td>
<td>101.4</td>
<td>103.3</td>
<td>0.69</td>
<td>-1.16</td>
<td>102.0</td>
<td>105.1</td>
<td>117.6</td>
<td>124.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Future situation</td>
<td>103.2</td>
<td>106.0</td>
<td>106.1</td>
<td>-2.17</td>
<td>-2.26</td>
<td>100.8</td>
<td>107.2</td>
<td>113.4</td>
<td>120.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>Q3 04</td>
<td>Q2 O4</td>
<td>Q3 04</td>
<td>Q/Q %</td>
<td>Y/Y %</td>
<td>&nbsp;</td>
<td>&nbsp;2003&nbsp;&nbsp;</td>
<td>&nbsp;2002&nbsp;</td>
<td>&nbsp; 2001&nbsp; &nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Employment&nbsp; (Thousands)</td>
<td>22417</td>
<td>22424</td>
<td>22247</td>
<td>-0.03</td>
<td>0.76</td>
<td>&nbsp;</td>
<td>22231</td>
<td>21917</td>
<td>21632</td>
</tr>
</tbody>
</table>
</body>
</html>

After becoming more confident in each month from June through October, Italian consumers lost confidence in the last two months. Overall consumer confidence fell 0.38% in December after having fallen 1.61% in November. At a level of [...]

Italian Consumers More Pessimistic in December

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041221c.jpg" width="353">
The November National Activity Index (CFNAI) compiled by the Federal Reserve Bank of Chicago fell to 0.12 from a downwardly revised 0.49 the prior month. The figure continues to suggest that the U.S. economy is expanding.
The decline lowered slightly the three-month moving average of the CFNAI to 0.13, the lowest level in a year. A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth.
During the last twenty years there has been a 74% correlation between the level of the CFNAI and q/q growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production and income, the labor market, personal consumption and housing, manufacturing and trade sales, and inventories &amp; orders.
The latest CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_december2004.pdf"> here</a>.
The future was the topic at <a href="http://www.chicagofed.org/news_and_conferences/news/files/economic_outlook_news_release_2004.pdf"> this</a> Economic Outlook Symposium.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago Fed</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Nov &#39;03</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>0.12</td>
<td>0.49</td>
<td>0.85</td>
<td>-0.11</td>
<td>-0.40</td>
<td>-1.19</td>
</tr>
</tbody>
</table>
</body>
</html>

The November National Activity Index (CFNAI) compiled by the Federal Reserve Bank of Chicago fell to 0.12 from a downwardly revised 0.49 the prior month. The figure continues to suggest that the U.S. economy is expanding. The decline [...]

Chicago Fed Nat'l Activity Index Down: Above Trend Growth Still Suggested

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041221a.jpg" width="353">
Chain store sales rose another 1.6% last week and added to the 1.2% rise during the first full week of December, according to the International Council of Shopping Centers (ICSC)-UBS.
The average of sales so far in December is 1.2% below November although strength during the last two weeks nearly recouped all of the declines of the prior two periods.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/041221b.jpg" width="353">
Consumers&#39; spending budgets benefited from another decline in gasoline prices. Last week, the average pump price for regular unleaded fell 3.2 cents to $1.815 per gallon (+22.2% y/y). The U.S. Energy Information Administration indicated that gas prices are down 10.8% from the peak in late October.
The leading indicator of chain store sales from ICSC surged 1.2% in the latest period, the first gain in six weeks.
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.
During the last ten years there has been a 60% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.

<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">12/18/04</th>
<th scope="col">12/11/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>437.9</td>
<td>430.9</td>
<td>3.5%</td>
<td>2.9%</td>
<td>3.6%</td>
<td>2.1%</td>
</tr>
</tbody>
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</body>
</html>

Chain store sales rose another 1.6% last week and added to the 1.2% rise during the first full week of December, according to the International Council of Shopping Centers (ICSC)-UBS. The average of sales so far in December is 1.2% [...]

Chain Store Sales Helped by Lower Gasoline Prices

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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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: December 2004

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U.S. Durable Goods Orders Rebounded

German IFO Improves in December

Total Mortgage Applications Unchanged but Refi's Rose

US 3Q GDP Revised Up

US 3Q GDP Revised Up

Italian Consumers More Pessimistic in December

Chicago Fed Nat'l Activity Index Down: Above Trend Growth Still Suggested

Chain Store Sales Helped by Lower Gasoline Prices