Tom Moeller

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223a.jpg" style="width: 353px; height: 265px;" align="right">Ever-so-slightly,
home prices are rising m/m and the annual decline has
eased. The December S&amp;P/Case Shiller Home Price Index edged up
another 0.3% and they have risen 3.6% from the May low. That
improvement pared the 12-month price decline to 3.1% from its worst of
-19.0% last January. For 2009 as a whole, prices fell 13.3% and they
have fallen 29.4% from the early-2006 peak.&nbsp;
The narrower 10 City
Composite Index also gained 0.3% following three months of 0.2%
increase. As a result, the 12-month decline eased to -2.4% from -19.4%
at its worst. These negative comparisons by far outpace those during
the 1990-91 recession when home prices fell 6.3%.
 The performance of
home prices has been quite varied around the country. During December,
price gains near or above 1.0% were logged in Boston, Las Vegas, San
Diego, San Francisco and Phoenix but prices still fell in Chicago,
Miami, New York, Cleveland, and Tampa.
The Case Shiller home price
series are value-weighted, i.e., a greater index weight is assigned to
more expensive homes. The S&amp;P/Case-Shiller home price series
can be found in Haver's USECON database and the
city data highlighted below is in the REGIONAL
database.
Mortgage
Choice and the Pricing of Fixed-Rate and
Adjustable-Rate Mortgages from the Federal Reserve Bank of
San Francisco is available here <a href="http://www.frbsf.org/publications/economics/letter/2010/el2010-03.html">here</a>.
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">S&amp;P/Case-Shiller
Home Price Index (SA, Jan 00 = 100)</th>
<th scope="col">December m/m</th>
<th scope="col">November m/m</th>
<th scope="col">October&nbsp;&nbsp;
m/m</th>
<th scope="col">Dec. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">20 City Composite Index</td>
<td>0.3%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>-3.1%</td>
<td>-13.3%</td>
<td>-15.7%</td>
<td>-3.8%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">&nbsp; Regional
Indicators</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Atlanta</td>
<td>-0.0</td>
<td>0.2</td>
<td>-0.3</td>
<td>-3.9</td>
<td>-11.6</td>
<td>-8.5</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Boston</td>
<td>0.9</td>
<td>0.5</td>
<td>-0.3</td>
<td>0.5</td>
<td>-4.9</td>
<td>-5.7</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Chicago</td>
<td>-0.6</td>
<td>-0.6</td>
<td>-1.1</td>
<td>-7.2</td>
<td>-14.2</td>
<td>-10.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Dallas</td>
<td>0.1</td>
<td>0.6</td>
<td>0.2</td>
<td>3.0</td>
<td>-2.3</td>
<td>-3.2</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Denver</td>
<td>0.1</td>
<td>0.2</td>
<td>0.3</td>
<td>1.2</td>
<td>-2.8</td>
<td>-4.9</td>
<td>-1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Los Angeles</td>
<td>1.4</td>
<td>1.2</td>
<td>0.7</td>
<td>-0.1</td>
<td>-15.4</td>
<td>-24.2</td>
<td>-5.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
New York</td>
<td>-0.5</td>
<td>-0.9</td>
<td>-0.4</td>
<td>-6.3</td>
<td>-9.8</td>
<td>-7.4</td>
<td>-2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
San Francisco</td>
<td>1.0</td>
<td>1.2</td>
<td>1.7</td>
<td>4.8</td>
<td>-18.4</td>
<td>-24.3</td>
<td>-4.5</td>
</tr>
</tbody>
</table>

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Ever-so-slightly, home prices are rising m/m and the annual decline has eased. The December S&P/Case Shiller Home Price Index edged up another 0.3% and they have risen 3.6% from the May low. That improvement pared the 12-month price [...]

U.S. Weekly Gasoline PricesRecover Somewhat

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223a.jpg" style="width: 353px; height: 265px;" align="right">Ever-so-slightly,
home prices are rising m/m and the annual decline has
eased. The December S&amp;P/Case Shiller Home Price Index edged up
another 0.3% and they have risen 3.6% from the May low. That
improvement pared the 12-month price decline to 3.1% from its worst of
-19.0% last January. For 2009 as a whole, prices fell 13.3% and they
have fallen 29.4% from the early-2006 peak.&nbsp;
The narrower 10 City
Composite Index also gained 0.3% following three months of 0.2%
increase. As a result, the 12-month decline eased to -2.4% from -19.4%
at its worst. These negative comparisons by far outpace those during
the 1990-91 recession when home prices fell 6.3%.
 The performance of
home prices has been quite varied around the country. During December,
price gains near or above 1.0% were logged in Boston, Las Vegas, San
Diego, San Francisco and Phoenix but prices still fell in Chicago,
Miami, New York, Cleveland, and Tampa.
The Case Shiller home price
series are value-weighted, i.e., a greater index weight is assigned to
more expensive homes. The S&amp;P/Case-Shiller home price series
can be found in Haver's USECON database and the
city data highlighted below is in the REGIONAL
database.
Mortgage
Choice and the Pricing of Fixed-Rate and
Adjustable-Rate Mortgages from the Federal Reserve Bank of
San Francisco is available here <a href="http://www.frbsf.org/publications/economics/letter/2010/el2010-03.html">here</a>.
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">S&amp;P/Case-Shiller
Home Price Index (SA, Jan 00 = 100)</th>
<th scope="col">December m/m</th>
<th scope="col">November m/m</th>
<th scope="col">October&nbsp;&nbsp;
m/m</th>
<th scope="col">Dec. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">20 City Composite Index</td>
<td>0.3%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>-3.1%</td>
<td>-13.3%</td>
<td>-15.7%</td>
<td>-3.8%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">&nbsp; Regional
Indicators</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Atlanta</td>
<td>-0.0</td>
<td>0.2</td>
<td>-0.3</td>
<td>-3.9</td>
<td>-11.6</td>
<td>-8.5</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Boston</td>
<td>0.9</td>
<td>0.5</td>
<td>-0.3</td>
<td>0.5</td>
<td>-4.9</td>
<td>-5.7</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Chicago</td>
<td>-0.6</td>
<td>-0.6</td>
<td>-1.1</td>
<td>-7.2</td>
<td>-14.2</td>
<td>-10.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Dallas</td>
<td>0.1</td>
<td>0.6</td>
<td>0.2</td>
<td>3.0</td>
<td>-2.3</td>
<td>-3.2</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Denver</td>
<td>0.1</td>
<td>0.2</td>
<td>0.3</td>
<td>1.2</td>
<td>-2.8</td>
<td>-4.9</td>
<td>-1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Los Angeles</td>
<td>1.4</td>
<td>1.2</td>
<td>0.7</td>
<td>-0.1</td>
<td>-15.4</td>
<td>-24.2</td>
<td>-5.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
New York</td>
<td>-0.5</td>
<td>-0.9</td>
<td>-0.4</td>
<td>-6.3</td>
<td>-9.8</td>
<td>-7.4</td>
<td>-2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
San Francisco</td>
<td>1.0</td>
<td>1.2</td>
<td>1.7</td>
<td>4.8</td>
<td>-18.4</td>
<td>-24.3</td>
<td>-4.5</td>
</tr>
</tbody>
</table>

U.S. Weekly Gasoline Prices
Recover Somewhat 
by <a href="/comment/Moeller.html">Tom
Moeller</a> February 23, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223d.jpg" style="width: 353px; height: 265px;" align="right">Continuing
to move generally in a sideways pattern, the pump price for
regular gasoline rose last week to $2.66. Nevertheless,
prices remained up by more than one-third from last year. Yesterday,
the spot market price for a gallon of regular gasoline rose to its
highest level since January. The figures are reported by the U.S.
Department of Energy and can be found in Haver's WEEKLY
&amp; DAILY databases.
 The price for a barrel of light
sweet crude (WTI) oil recovered prior weakness and rose last week to
$78.30. Nevertheless, it was down from the early-January high of
$82.59. Yesterday, the spot price was up further to $80.16. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223e.jpg" style="width: 353px; height: 265px;" align="right">
Prices have
risen from $71.53 early this past December and are more than double the
December 2008 low of $32.37.
Demand for gasoline fell 3.0% last week
versus one year ago. That decline compared to a 3.9% increase at the
beginning of October. Breaking away from earlier y/y strength, the
demand for residual fuel oil fell 3.7% y/y. Distillate demand fell
12.3% y/y, a decline more moderate than the 21.6% y/y shortfall at the
beginning of last July. Inventories of crude oil and petroleum products
slipped in February but were up 0.7% from one year ago.
 U.S. natural
gas prices have been roughly flat this year as temperatures have been
volatile. They fell to an average $5.40 per mmbtu (+25.21% y/y) from
the high of $6.50 early in January. Nevertheless they remained double
the September low.
The energy price data can be found in Haver's WEEKLY
database while the daily figures are in DAILY.
The gasoline demand figures are in OILWKLY.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM" style="color: white;">Weekly Prices</a></th>
<th scope="col">02/22/10</th>
<th scope="col">02/15/10</th>
<th scope="col">02/08/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.66</td>
<td>2.61</td>
<td>2.65</td>
<td>39.1%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>78.30</td>
<td>73.91</td>
<td>74.59</td>
<td>111.7%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>

U.S. Weekly Chain Store Sales Look
Lifeless 
by <a href="/comment/Moeller.html">Tom
Moeller</a> February 23, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223f.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Consumer spending has yet to show real spark. Weekly chain
store sales improved by 2.3% last week but for the month so far sales
remained down slightly from the January average. Sales also remained
down 1.6% from last summer's high.
The ICSC-Goldman
Sachs retail chain-store sales index is constructed using the
same-store sales (stores open for one year) reported by 78 stores of
seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney,
Sears and Wal-Mart.
 During the last ten years there has been a 69%
correlation between the year-to-year growth in chain store sales and
the growth in general merchandise retail sales. The weekly
figures are available in Haver's SURVEYW database.

Also treading water has been the leading indicator of chain
store sales. It's been roughly unchanged since early-January and flat
for the last year. This composite leading economic indicator is
compiled from four series: (1) the MBA's volume index of mortgage
applications for home purchase (2) the ABC News/Money magazine's survey
of consumer buying conditions (3) new filings for jobless benefits and
(4) the 30-year government bond yield.
<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/surveyw/@S2/@S2.HTM" style="color: white;">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">02/20/10</th>
<th scope="col">02/13/10</th>
<th scope="col">02/06/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>490.4</td>
<td>479.5</td>
<td>487.1</td>
<td>0.9%</td>
<td>0.1%</td>
<td>1.4%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>
Confidence Among German
Industrialists Slips A Bit In February 
by <a href="/comment/Curley.html">Louise
Curley</a> February 23, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
German business confidence, which had been improving since
March 2009, declined slightly in February. On a percent balance
measure, which subtracts the percentage of respondents who are negative
from those who are positive, confidence among German entrepreneurs fell
to -10.3% from -9.0%. The climate measure is a combination of the
business opinions regarding current conditions and expectations for the
next six months.. The percent balance of business opinion on current
conditions fell to -23.8% in February from -21.0% in January. Much of
the decline can probably be attributed to the weather. Heavy snow fall
and cold temperatures were particularly bad for construction and the
distributive trades, both wholesale and retail.
In spite of the fact
that the pessimists have exceeded the optimists regarding current
conditions by more than 20% over the past several months, the
proportion of German entrepreneurs who expect better condition six
months ahead has been increasing. In December there was a slight excess
of optimists over pessimists of 0.3%. In February the percent balance
on expectations increased to 4.2% from 3.8% in January.
The increase
in the proportion of business people who expect better conditions is in
sharp contrast to the declines in the proportion of financial people
who expect better conditions as revealed last Week in the ZEW survey.
Not only do the business and financial communities sometimes differ in
their appraisals of the future, but, they apparently differ in
temperament, as shown in the attached chart which compares the percent
balances on expectations of the two surveys. The financial community
appears to have a positive bias and to have wide mood swings while the
business community tends to have a negative bias and more restrained
mood swings. In statistical terms--over entire history of each of the
two series--the mean of the ZEW series is 27.1% and its standard
deviation, 40.6%; the mean of the IFO series is -5.2% and its standard
deviation, 10.6%

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">GERMANY</th>
<th scope="col">Feb 10&nbsp;</th>
<th scope="col">Jan 10&nbsp;</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Low</th>
<th scope="col">Date</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">IFO:&nbsp;&nbsp;
Climate (% Bal.)</td>
<td>-10.3</td>
<td>-9.0</td>
<td>-16.5</td>
<td>-12.9</td>
<td>-16.5</td>
<td>-17.8</td>
<td>-36.0</td>
<td>Mar 09</td>
</tr>
<tr>
<td class="firstcol">Current Conditions (% Bal.)</td>
<td>-23.8</td>
<td>-21.0</td>
<td>-22.5</td>
<td>-24.9</td>
<td>-28.4</td>
<td>-29.0</td>
<td>-38.1</td>
<td>Jun 09</td>
</tr>
<tr class="odd">
<td class="firstcol">Expectations
(% Bal.)</td>
<td>4.2</td>
<td>3.8</td>
<td>0.3</td>
<td>0.0</td>
<td>-3.9</td>
<td>-5.9</td>
<td>-44.8</td>
<td>Dec 08</td>
</tr>
<tr>
<td class="firstcol">ZEW: Expectations
(% Bal.)</td>
<td>45.1</td>
<td>47.2</td>
<td>50.4</td>
<td>51.1</td>
<td>56.0</td>
<td>57.7</td>
<td>-63.0</td>
<td>Oct 08</td>
</tr>
</tbody>
</table>
U.S. Consumer Confidence Falls
Sharply 
by <a href="/comment/Moeller.html">Tom
Moeller</a> February 23, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223h.jpg" style="width: 353px; height: 265px;" align="right">There
was a
slowing of retail sales during December and January. More weakness may
be in the offing given the latest souring of consumers' mood. For
February, the Conference Board reported that consumer confidence fell
18.6% from January and that brought down the level of confidence to its
lowest since last April. Just a modest m/m decline had been the
Consensus expectation for February and during the last ten years there
has been an 83% correlation between the level of consumer confidence
and the y/y change in real consumer spending. The Conference Board data
can be found in Haver's CBDB database.
Consumers'
assessment of current economic conditions slumped by nearly one-quarter
m/m. That reversed all of a January increase and left the measure near
the historic low. Jobs were seen as hard to get by 47.7% of respondents
and jobs were seen as plentiful by only 3.6%. That was up just slightly
from the series' historic low. Also at a record low was the percentage
of respondents who saw business conditions as good. The percentage of
consumers who thought business conditions were bad rose to 46.3%, off
somewhat from its peak but nearly the highest since 1983.&nbsp;
The expectations component of confidence also fell sharply to
its
lowest level since April. Lessened expectations for business
conditions, employment and income have led the latest downdraft.
Expectations for the inflation rate in twelve months held stable at
5.2%, the lowest level since 2007 and down from last year's high of
7.7%. Interest rates in twelve months were expected to be higher by
52.2% of respondents while 14.2% expected rates to fall. A greatly
lessened 28.6% of respondents expected stock prices to rise.
&nbsp;
An improved 2.7% of those surveyed plan to buy a home
during the next six months. An increased 27.1% plan to buy a major
appliance versus 30.9% back in 2007. Only 4.8% plan to buy an
automobile versus 6.0% in 2007 and just 1.8% plan to buy a new
one.&nbsp;&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223i.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223j.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Conference
Board&nbsp;(SA, 1985=100)</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y %</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>46.0</td>
<td>56.5</td>
<td>53.6</td>
<td>81.8</td>
<td>45.2</td>
<td>57.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>19.4</td>
<td>25.2</td>
<td>20.2</td>
<td>-13.0</td>
<td>24.0</td>
<td>69.9</td>
<td>128.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>63.8</td>
<td>77.3</td>
<td>75.9</td>
<td>133.7</td>
<td>59.3</td>
<td>50.0</td>
<td>86.4</td>
</tr>
</tbody>
</table>

</body></html>

U.S. Weekly Gasoline PricesRecoverSomewhat

Louise Curley

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222e.jpg" style="width: 353px; height: 265px;" align="right">Taiwan
and
Thailand released fourth quarter Gross Domestic Product data this
morning.&nbsp; Taiwan is a small highly industrialized island
nation of about 7 million people with a per capita income of $16,428 in
2009 .&nbsp; Thailand, by contrast, is a large continental nation
of some 23 million people with a per capital income of $4,108 in
2008.&nbsp;&nbsp; Taiwan reported a fourth quarter increase of
4.23% and Thailand one of 3.6%.
In Taiwan, although the rate of
increase in the exports of good and service declined from 7.92% in the
third quarter, it was still a respectable 6.08%.&nbsp; Private
consumption, however, increased by 4.52% in the fourth quarter,
compared with 0.77% in the third quarter.&nbsp; Fixed capital
formation was up by 10.04% and inventory liquidation was sharply lower.
Inventories have been cut back aggressively since the beginning of
2009.&nbsp; From declines 52,762, 29,881 and 75,142million 2006 NT$
in the third, second and first quarters of 2009 respectively, the
fourth quarter saw a decline of only 2,555 million 2006 NT$.
In
Thailand, exports of goods and service increased 7.69% in the fourth
quarter, compared with 2.39% in the third quarter.&nbsp; Private
consumption also accelerated, from 1.78% to 2.97%.&nbsp; Fixed
investment, however, was 1.66% lower in the fourth quarter than in the
third quarter and inventories were increased by 1,806 million '88 Bahts
The inventory accumulation in the fourth quarter followed three
previous quarters of liquidation.&nbsp; 17,367 mil 88 bahts in the
third quarter, 910 in the second and 74,368 in the first quarter of
2009.
Quarterly changes in the major components of GDP for the two
countries are shown in the accompanying charts and in the table
below.&nbsp; Additional data for Taiwan and Thailand can be found
in the Haver Data Base:&nbsp; EMERGEPR
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222f.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Q/Q
Percent Changes (ex where noted)</th>
<th scope="col">Q4 09&nbsp;</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q1 09</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3 08</th>
<th scope="col">Q2 08</th>
<th scope="col">Q1 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP:&nbsp;
Taiwan</td>
<td>4.23</td>
<td>2.45</td>
<td>4.25</td>
<td>-2.55</td>
<td>-3.62</td>
<td>-3.62</td>
<td>-0.33</td>
<td>1.26</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>3.63</td>
<td>1.68</td>
<td>2.03</td>
<td>-1.45</td>
<td>-5.04</td>
<td>-0.49</td>
<td>-0.22</td>
<td>1.70</td>
</tr>
<tr class="odd">
<td class="firstcol">Private
Consumption:&nbsp; Taiwan</td>
<td>4.52</td>
<td>0.77</td>
<td>0.65</td>
<td>0.39</td>
<td>0.38</td>
<td>-1.192</td>
<td>-0.78</td>
<td>0.30</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>2.97</td>
<td>1.78</td>
<td>0.17</td>
<td>-3.43</td>
<td>0.25</td>
<td>0.87</td>
<td>-0.13</td>
<td>1.11</td>
</tr>
<tr class="odd">
<td class="firstcol">Fixed Capital
Formation:&nbsp; Taiwan</td>
<td>10.07</td>
<td>7.68</td>
<td>22.38</td>
<td>-30.52</td>
<td>-10.46</td>
<td>-2.31</td>
<td>-8.93</td>
<td>-7.20</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>-1.66</td>
<td>5.81</td>
<td>5.04</td>
<td>-11.68</td>
<td>-4.53</td>
<td>1.37</td>
<td>-1.59</td>
<td>-0.34</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports of Gds
&amp; Serv:&nbsp; Taiwan</td>
<td>6.08</td>
<td>7.92</td>
<td>12.20</td>
<td>-7.32</td>
<td>-17.35</td>
<td>-2.45</td>
<td>-1.0</td>
<td>2.62</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>7.69</td>
<td>2.39</td>
<td>-3.40</td>
<td>-6.66</td>
<td>-11.90</td>
<td>-1.33</td>
<td>2.52</td>
<td>1.96</td>
</tr>
<tr class="odd">
<td class="firstcol">Chg in
Inventories: Taiwan (Mil 2006NT$)</td>
<td>-2555</td>
<td>-52762</td>
<td>-29882</td>
<td>-75142</td>
<td>37228</td>
<td>42424</td>
<td>25900</td>
<td>46269</td>
</tr>
<tr>
<td class="firstcol">Thailand
(mil 1988Bahts)</td>
<td>1806</td>
<td>-17367</td>
<td>-910</td>
<td>-74368</td>
<td>21240</td>
<td>30930</td>
<td>-106</td>
<td>6497</td>
</tr>
</tbody>
</table>


</body></html>

Taiwan and Thailand released fourth quarter Gross Domestic Product data this morning. Taiwan is a small highly industrialized island nation of about 7 million people with a per capita income of $16,428 in 2009 . Thailand, by contrast, [...]

Taiwan And Thailand Report Q4 09 GDP Growth

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Germany no longer seems to be locked in to the wining
trajectory that leads the e-Zone. France and Italy each have stronger
orders growth than Germany Yr/Yr. Among the four largest EU nations
Germany alone is the one with declining orders growth over the most
recent three months on order declines in December and in October.
The UK shook off a steep decline in orders in November; that
drop unwound a huge spike in orders in October. UK data have become
extremely volatile. December has brought another outsized gain in
orders this time of 8.5%. Despite some major league see-sawing the UK
orders series appears to be in the same sort of rebound as Germany
Italy and France.
The clear message from the chart above is that despite some
period-to-period volatility in orders an upswing is still in train.
Orders are climbing up out of the hole they were dug into during the
recession. In November the large three EMU countries each had Yr/Yr
declines in orders but in December orders in Italy, France and Germany
all are in the plus column again for Yr/Yr growth.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col">Selected Euro-Area and UK Industrial Orders </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Dec 09</td>
<td>Nov 09</td>
<td>Dec 09</td>
<td>Nov 09</td>
<td>Dec 09</td>
<td>Nov 09</td>
</tr>
<tr>
<td class="firstcol">Countries:</td>
<td>Dec 09</td>
<td>Nov 09</td>
<td>Oct 09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
</tr>
<tr>
<td class="firstcol">Germany
(MFG):</td>
<td>-1.8%</td>
<td>3.2%</td>
<td>-2.1%</td>
<td>-3.4%</td>
<td>9.9%</td>
<td>10.3%</td>
<td>23.7%</td>
<td>4.2%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">France(Ind):</td>
<td>17.1%</td>
<td>0.5%</td>
<td>-8.2%</td>
<td>36.4%</td>
<td>-7.3%</td>
<td>40.5%</td>
<td>4.5%</td>
<td>15.5%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">Italy
(Ind):</td>
<td>4.7%</td>
<td>2.9%</td>
<td>0.7%</td>
<td>38.5%</td>
<td>47.6%</td>
<td>18.5%</td>
<td>15.4%</td>
<td>5.3%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">UK
(Engineering Industy):</td>
<td>8.5%</td>
<td>-15.6%</td>
<td>14.1%</td>
<td>19.1%</td>
<td>-18.1%</td>
<td>7.1%</td>
<td>-9.9%</td>
<td>-16.2%</td>
<td>-3.8%</td>
</tr>
</tbody>
</table>
</body></html>

Germany no longer seems to be locked in to the wining trajectory that leads the e-Zone. France and Italy each have stronger orders growth than Germany Yr/Yr. Among the four largest EU nations Germany alone is the one with declining [...]

Large EU Country Orders Go Back On The Rise…Mostly

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222a.jpg" style="width: 353px; height: 265px;" align="right">The U.S.
economy regained forward momentum last month. The January Chicago Fed
National Activity Index (CFNAI) from the Federal Reserve Bank of
Chicago rose to a reading of 0.02 from a little-revised -0.58 in
December. Also pointing toward positive economic growth was the rise
from the series' low of -4.14 reached one year ago. During the last ten
years the has been a 76% correlation between the index level and the
q/q change in real GDP.The three-month moving average of the
index, which smoothes out some of the series' volatility, also rose to
its highest level since 2007. An index level at or below
-0.70 typically has indicated negative U.S. economic growth. A zero
value of the CFNAI indicates that the economy is expanding at its
historical trend rate of growth of roughly 3.0%. The complete CFNAI
report is available <a href="http://www.chicagofed.org/digital_assets/publications/cfnai/2010/cfnai_february2010.pdf">here</a>.The Chicago Fed indicated that the production &amp; income series
made the largest positive contribution to the series improvement in
January. Overall, 50 of the 85 individual indicators made positive
contributions to the index while 35 made negative contributions. The
CFNAI is a weighted average of 85 indicators of economic activity. The
indicators reflect activity in the following categories: production
&amp; income, the labor market, personal consumption &amp;
housing, manufacturing &amp; trade sales, and inventories &amp;
orders.· In a separate survey, the Chicago Fed indicated that its
Midwest manufacturing index slipped during December but remained close
to its highest level of the year. Indicators for the auto, steel,
machinery and resource sectors were roughly unchanged. The Chicago
Federal Reserve figures are available in Haver's SURVEYS database.&nbsp;The Challenges Ahead is the title of N.Y.
Federal Reserve Bank President William C. Dudley's comments and they
are available&nbsp; <a href="http://www.newyorkfed.org/newsevents/speeches/2010/dud100219.html">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222c.jpg" style="width: 312px; height: 265px;">
<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/SURVEYS/@S5/@S503/@S503.HTM" style="color: white;">Chicago Fed</a></th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">CFNAI</td>
<td>0.02</td>
<td>-0.58</td>
<td>0.06</td>
<td>-1.64</td>
<td>-1.79</td>
<td>-0.35</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Moving
Average</td>
<td>-0.16</td>
<td>-0.47</td>
<td>-0.59</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Personal Consumption &amp; Housing&nbsp;</td>
<td>-0.45</td>
<td>-0.49</td>
<td>-0.42</td>
<td>-0.49</td>
<td>-0.32</td>
<td>-0.09</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Employment, Unemployment &amp; Hours</td>
<td>-0.01</td>
<td>-0.26</td>
<td>0.12</td>
<td>-0.76</td>
<td>-0.67</td>
<td>-0.15</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Production &amp; Income</td>
<td>0.45</td>
<td>0.14</td>
<td>0.25</td>
<td>-0.23</td>
<td>-0.56</td>
<td>-0.05</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Sales, Inventories &amp; Orders</td>
<td>0.04</td>
<td>0.03</td>
<td>0.11</td>
<td>-0.15</td>
<td>-0.25</td>
<td>-0.06</td>
</tr>
</tbody>
</table>
</body></html>

The U.S. economy regained forward momentum last month. The January Chicago Fed National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago rose to a reading of 0.02 from a little-revised -0.58 in December. Also pointing [...]

Chicago Fed Index Increases To Nearly Highest Since 2007

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222a.jpg" style="width: 353px; height: 265px;" align="right">The
U.S.
economy regained forward momentum last month. The January Chicago Fed
National Activity Index (CFNAI) from the Federal Reserve Bank of
Chicago rose to a reading of 0.02 from a little-revised -0.58 in
December. Also pointing toward positive economic growth was the rise
from the series' low of -4.14 reached one year ago. During the last ten
years the has been a 76% correlation between the index level and the
q/q change in real GDP.
The three-month moving average of the
index, which smoothes out some of the series' volatility, also rose to
its highest level since 2007.
 An index level at or below
-0.70 typically has indicated negative U.S. economic growth. A zero
value of the CFNAI indicates that the economy is expanding at its
historical trend rate of growth of roughly 3.0%. The complete CFNAI
report is available <a href="http://www.chicagofed.org/digital_assets/publications/cfnai/2010/cfnai_february2010.pdf">here</a>.
The Chicago Fed indicated that the production &amp; income
series
made the largest positive contribution to the series improvement in
January. Overall, 50 of the 85 individual indicators made positive
contributions to the index while 35 made negative contributions. The
CFNAI is a weighted average of 85 indicators of economic activity. The
indicators reflect activity in the following categories: production
&amp; income, the labor market, personal consumption &amp;
housing, manufacturing &amp; trade sales, and inventories &amp;
orders.· In a separate survey, the Chicago Fed indicated that its
Midwest manufacturing index slipped during December but remained close
to its highest level of the year. Indicators for the auto, steel,
machinery and resource sectors were roughly unchanged. The Chicago
Federal Reserve figures are available in Haver's SURVEYS database.&nbsp;
The
Challenges Ahead is the title of N.Y.
Federal Reserve Bank President William C. Dudley's comments and they
are available&nbsp; <a href="http://www.newyorkfed.org/newsevents/speeches/2010/dud100219.html">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222c.jpg" style="width: 312px; height: 265px;">
<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/SURVEYS/@S5/@S503/@S503.HTM" style="color: white;">Chicago Fed</a></th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">CFNAI</td>
<td>0.02</td>
<td>-0.58</td>
<td>0.06</td>
<td>-1.64</td>
<td>-1.79</td>
<td>-0.35</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Moving
Average</td>
<td>-0.16</td>
<td>-0.47</td>
<td>-0.59</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Personal Consumption &amp; Housing&nbsp;</td>
<td>-0.45</td>
<td>-0.49</td>
<td>-0.42</td>
<td>-0.49</td>
<td>-0.32</td>
<td>-0.09</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Employment, Unemployment &amp; Hours</td>
<td>-0.01</td>
<td>-0.26</td>
<td>0.12</td>
<td>-0.76</td>
<td>-0.67</td>
<td>-0.15</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Production &amp; Income</td>
<td>0.45</td>
<td>0.14</td>
<td>0.25</td>
<td>-0.23</td>
<td>-0.56</td>
<td>-0.05</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Sales, Inventories &amp; Orders</td>
<td>0.04</td>
<td>0.03</td>
<td>0.11</td>
<td>-0.15</td>
<td>-0.25</td>
<td>-0.06</td>
</tr>
</tbody>
</table>

Large EU Country Orders Go Back On
The Rise&#8230;Mostly 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 22, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Germany no longer seems to be locked in to the wining
trajectory that leads the e-Zone. France and Italy each have stronger
orders growth than Germany Yr/Yr. Among the four largest EU nations
Germany alone is the one with declining orders growth over the most
recent three months on order declines in December and in October.
The UK shook off a steep decline in orders in November; that
drop unwound a huge spike in orders in October. UK data have become
extremely volatile. December has brought another outsized gain in
orders this time of 8.5%. Despite some major league see-sawing the UK
orders series appears to be in the same sort of rebound as Germany
Italy and France.
The clear message from the chart above is that despite some
period-to-period volatility in orders an upswing is still in train.
Orders are climbing up out of the hole they were dug into during the
recession. In November the large three EMU countries each had Yr/Yr
declines in orders but in December orders in Italy, France and Germany
all are in the plus column again for Yr/Yr growth.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">Selected
Euro-Area and UK Industrial Orders </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
</tr>
<tr>
<td class="firstcol">Countries:</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>Oct 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
</tr>
<tr>
<td class="firstcol">Germany
(MFG):</td>
<td>-1.8%</td>
<td>3.2%</td>
<td>-2.1%</td>
<td>-3.4%</td>
<td>9.9%</td>
<td>10.3%</td>
<td>23.7%</td>
<td>4.2%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">France(Ind):</td>
<td>17.1%</td>
<td>0.5%</td>
<td>-8.2%</td>
<td>36.4%</td>
<td>-7.3%</td>
<td>40.5%</td>
<td>4.5%</td>
<td>15.5%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">Italy
(Ind):</td>
<td>4.7%</td>
<td>2.9%</td>
<td>0.7%</td>
<td>38.5%</td>
<td>47.6%</td>
<td>18.5%</td>
<td>15.4%</td>
<td>5.3%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">UK
(Engineering Industy):</td>
<td>8.5%</td>
<td>-15.6%</td>
<td>14.1%</td>
<td>19.1%</td>
<td>-18.1%</td>
<td>7.1%</td>
<td>-9.9%</td>
<td>-16.2%</td>
<td>-3.8%</td>
</tr>
</tbody>
</table>
Taiwan And Thailand Report Q4 09
GDP Growth 
by <a href="/comment/Curley.html">Louise
Curley</a> February 22, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222e.jpg" style="width: 353px; height: 265px;" align="right">Taiwan
and
Thailand released fourth quarter Gross Domestic Product data this
morning.&nbsp; Taiwan is a small highly industrialized island
nation of about 7 million people with a per capita income of $16,428 in
2009 .&nbsp; Thailand, by contrast, is a large continental nation
of some 23 million people with a per capital income of $4,108 in
2008.&nbsp;&nbsp; Taiwan reported a fourth quarter increase of
4.23% and Thailand one of 3.6%.
In Taiwan, although the rate of
increase in the exports of good and service declined from 7.92% in the
third quarter, it was still a respectable 6.08%.&nbsp; Private
consumption, however, increased by 4.52% in the fourth quarter,
compared with 0.77% in the third quarter.&nbsp; Fixed capital
formation was up by 10.04% and inventory liquidation was sharply lower.
Inventories have been cut back aggressively since the beginning of
2009.&nbsp; From declines 52,762, 29,881 and 75,142million 2006 NT$
in the third, second and first quarters of 2009 respectively, the
fourth quarter saw a decline of only 2,555 million 2006 NT$.
In
Thailand, exports of goods and service increased 7.69% in the fourth
quarter, compared with 2.39% in the third quarter.&nbsp; Private
consumption also accelerated, from 1.78% to 2.97%.&nbsp; Fixed
investment, however, was 1.66% lower in the fourth quarter than in the
third quarter and inventories were increased by 1,806 million '88 Bahts
The inventory accumulation in the fourth quarter followed three
previous quarters of liquidation.&nbsp; 17,367 mil 88 bahts in the
third quarter, 910 in the second and 74,368 in the first quarter of
2009.
Quarterly changes in the major components of GDP for the two
countries are shown in the accompanying charts and in the table
below.&nbsp; Additional data for Taiwan and Thailand can be found
in the Haver Data Base:&nbsp; EMERGEPR
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222f.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Q/Q
Percent Changes (ex where noted)</th>
<th scope="col">Q4 09&nbsp;</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q1 09</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3 08</th>
<th scope="col">Q2 08</th>
<th scope="col">Q1 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP:&nbsp;
Taiwan</td>
<td>4.23</td>
<td>2.45</td>
<td>4.25</td>
<td>-2.55</td>
<td>-3.62</td>
<td>-3.62</td>
<td>-0.33</td>
<td>1.26</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>3.63</td>
<td>1.68</td>
<td>2.03</td>
<td>-1.45</td>
<td>-5.04</td>
<td>-0.49</td>
<td>-0.22</td>
<td>1.70</td>
</tr>
<tr class="odd">
<td class="firstcol">Private
Consumption:&nbsp; Taiwan</td>
<td>4.52</td>
<td>0.77</td>
<td>0.65</td>
<td>0.39</td>
<td>0.38</td>
<td>-1.192</td>
<td>-0.78</td>
<td>0.30</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>2.97</td>
<td>1.78</td>
<td>0.17</td>
<td>-3.43</td>
<td>0.25</td>
<td>0.87</td>
<td>-0.13</td>
<td>1.11</td>
</tr>
<tr class="odd">
<td class="firstcol">Fixed Capital
Formation:&nbsp; Taiwan</td>
<td>10.07</td>
<td>7.68</td>
<td>22.38</td>
<td>-30.52</td>
<td>-10.46</td>
<td>-2.31</td>
<td>-8.93</td>
<td>-7.20</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>-1.66</td>
<td>5.81</td>
<td>5.04</td>
<td>-11.68</td>
<td>-4.53</td>
<td>1.37</td>
<td>-1.59</td>
<td>-0.34</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports of Gds
&amp; Serv:&nbsp; Taiwan</td>
<td>6.08</td>
<td>7.92</td>
<td>12.20</td>
<td>-7.32</td>
<td>-17.35</td>
<td>-2.45</td>
<td>-1.0</td>
<td>2.62</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>7.69</td>
<td>2.39</td>
<td>-3.40</td>
<td>-6.66</td>
<td>-11.90</td>
<td>-1.33</td>
<td>2.52</td>
<td>1.96</td>
</tr>
<tr class="odd">
<td class="firstcol">Chg in
Inventories: Taiwan (Mil 2006NT$)</td>
<td>-2555</td>
<td>-52762</td>
<td>-29882</td>
<td>-75142</td>
<td>37228</td>
<td>42424</td>
<td>25900</td>
<td>46269</td>
</tr>
<tr>
<td class="firstcol">Thailand
(mil 1988Bahts)</td>
<td>1806</td>
<td>-17367</td>
<td>-910</td>
<td>-74368</td>
<td>21240</td>
<td>30930</td>
<td>-106</td>
<td>6497</td>
</tr>
</tbody>
</table>


</body></html>

Chicago Fed Index Increases ToNearly Highest Since 2007

Carol Stone, CBE

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219e.jpg" style="width: 353px; height: 265px;" align="right">Yesterday,
February 18, the Federal Reserve Board announced several changes to the
extraordinary liquidity measures it instituted to help alleviate the
recent financial crisis. Just last week, Tom Moeller described here how
extensive those liquidity provisions have been for just one part of the
program, the Term Auction Facility. Even as that effort winds down &#8211; it
will be concluded altogether with a final auction on March 8,
yesterday&#8217;s announced said &#8211; the Fed Board is also pulling back or
diminishing some of its other emergency operations. In particular, the
old &#8220;discount window&#8221;, which is now also called &#8220;primary credit&#8221;, sees
its rate raised from 50 basis points (0.50%) to 75 basis points
(0.75%). · As the Fed&#8217;s statement explains, this move increases the
spread of the primary credit, or discount, rate to 50 basis points over
the high end of the FOMC&#8217;s target for the federal funds rate, as shown
in the chart. The chart also shows the altered treatment of the
discount window beginning in 2003. Previously, the discount rate
hovered just below coincident fed funds rates, but it was changed in
January that year to a penalty rate, pegged at some spread over the
funds rate. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219f.jpg" style="width: 353px; height: 265px;" align="right"> Generally this has been 1 percentage point, 100 basis
points. Part of the emergency liquidity boost beginning in August 2007
was making these funds cheaper for borrowing banks by cutting the
spread, first to 50 basis points, and then in March 2008, to 25 basis
points, where it has been until today, when the hike to 50 took
effect.The second graph shows the amount of this primary credit. This
is similar to, but not exactly the same as the old &#8220;adjustment credit&#8221;
in the pre-2003 procedures. The idea then was that banks avoided the
discount window like the plague, so there was rarely any use of it at
all. You can see the spike over the 9/11 period, which was, up to
mid-2008, by far the record amount of borrowing. The philosophy was
changing though; the rate was made higher than other sources of funds,
but banks theoretically wouldn&#8217;t be stigmatized by availing themselves
of it. In the easy-money period of those mid-2000s, hardly any ever
needed to anyway. All this changed in 2007 and 2008. The Fed Board cut
the spread with the express intention of helping banks get money. At
the peak in late October and early November 2008, banks were borrowing
more than $100 billion in this one facility alone. More recently, this
has shrunk markedly, to &#8220;just&#8221; $14.3 billion in the Fed&#8217;s statement
week ended this past Wednesday.Some wonder if this action by the Fed
is a &#8220;tightening&#8221;, even though their statement argues that it is not.
It certainly is the first action involving a rate. But they have
already reined in their &#8220;quantitative&#8221; easing substantially, and this
newest can thus be seen as part of a progression toward non-emergency
conditions. They further indicated that the maturity of the primary
credit borrowing, which has been as long as 90 days, will be shortened
to the more typical overnight on March 18. So there are several steps
here, and in one sense, they are reactive, not pro-active. They seem to
be a response to smoother money market conditions rather that an
attempt to disrupt the markets and alter the underlying demand
conditions. So technically, this would not be a &#8220;tightening&#8221;. But it is
a &#8220;de-easing&#8221;, which must, by definition, come first.The Fed&#8217;s
statement is&nbsp;<a href="http://www.federalreserve.gov/newsevents/press/monetary/20100218a.htm">here</a>
. The rates and borrowing amounts are contained in Haver&#8217;s DAILY and
WEEKLY databases, with monthly averages in USECON.
</body></html>

Yesterday, February 18, the Federal Reserve Board announced several changes to the extraordinary liquidity measures it instituted to help alleviate the recent financial crisis. Just last week, Tom Moeller described here how extensive [...]

The Fed De-Eases Bank Lending Terms

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219d.jpg" style="width: 353px; height: 265px;" align="left">
The Markit
PMIs are sensitive gauges measuring the breadth of the expansion in
manufacturing and services industries in the e-Zone. This month the MFG
PMI was above its neutral reading of 50 for the fifth month in a row.
In each of these five months MFG has accelerated improving its mark
above the neutral 50 readings.&nbsp;
Not so for services.
 For the
services, the index was also above 50 &#8211; and for the sixth consecutive
month. But the services gauge has now fallen for two months in a row.
It is not building momentum, it is losing momentum. The services
reading at 51.97 is now the weakest reading for this sector since
September 2009 when it first popped above the neutral 50 mark and began
to signal growth. Since this sector is the job-creating sector,
backtracking in services is very worrisome. True, the services sector
still is expanding. At 51.97 it stands above the neutral mark of 50.
But momentum is being lost and the margin above 50 for services is
small. The services reading is below its lifetime average of 53.67 so
it is far below normal even though the sector it technically still
registering growth. Growth does not imply normalcy.&nbsp;
Compare that to
the manufacturing index which at 54.13 has been steadily accelerating
and stands above its lifetime average reading of 51.12. Manufacturing
seems to be pointing the way ahead.
 But from other reports we know
that one of the problems in the Zone is that it has benefitted from
export led growth, and that has favored the manufacturing sector. It&#8217;s
a problem because the very name suggests that the Zone has not
cultivated its own domestic demand. And we see that loud and clear in
this report. While some services do get exported, goods are far more
likely to be exported than are services. The strength in manufacturing
stems from some considerable strength in Euro-Area export orders.
Meanwhile, the weakness at home has held back domestic demand. Just
today the UK (an EU member not an EMU member) posted a sharp drop in
retail sales, although weather seems to have been a prime culprit
there. The overriding point for Europe is that it has not cultivated
domestic demand; it is living off of demand rebounds elsewhere. And
Europe is too big to be carried for long in that fashion by the global
economy.&nbsp;The weakness in its own services sector reasonably leads us
to wonder if Europe&#8217;s export growth will be enough to sustain it until
job growth, the services sector and domestic demand- three highly
inter-linked factors - kick into gear.&nbsp;
Suffice it to say that
Europe&#8217;s report is not reassuring and its growth seems to be as much at
risk as at anytime in this nascent expansion period.
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col">FLASH
Readings
</th>
</tr>
<tr class="even">
<th colspan="3" scope="col">Markit PMIs for the
Euro-Area</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Feb-10</td>
<td>54.13</td>
<td>51.97</td>
</tr>
<tr>
<td class="firstcol">Jan-10</td>
<td>52.39</td>
<td>52.50</td>
</tr>
<tr>
<td class="firstcol">Dec-09</td>
<td>51.59</td>
<td>53.63</td>
</tr>
<tr>
<td class="firstcol">Nov-10</td>
<td>51.20</td>
<td>53.04</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">Segment
Averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>51.73</td>
<td>52.67</td>
</tr>
<tr>
<td class="firstcol">6-MO</td>
<td>50.57</td>
<td>52.36</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>44.78</td>
<td>48.47</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">136-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>60.47</td>
<td>62.36</td>
</tr>
<tr>
<td class="firstcol">Low</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>76.4%</td>
<td>55.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Range</td>
<td>26.92</td>
<td>23.12</td>
</tr>
<tr class="odd">
<td class="firstcol">Q3-2007</td>
<td>51.12</td>
<td>53.67</td>
</tr>
</tbody>
</table>

</body></html>

The Markit PMIs are sensitive gauges measuring the breadth of the expansion in manufacturing and services industries in the e-Zone. This month the MFG PMI was above its neutral reading of 50 for the fifth month in a row. In each of [...]

Disturbing Mixed Message From The Markit PMIs In EMU

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

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Nonfarm labor productivity fell 0.8% (SAAR) during Q1’25 after increasing 1.7% in Q4’24, revised from 1.5%. A 0.6% decline had been expected in the Action Economics Forecast Survey. It was the first productivity decline since Q2’22. The y/y increase during Q1 fell to 1.4% from 2.1% in Q4. It was below a 3.3% high in the first quarter of last year. Productivity fell as real value-added output dropped 0.3% last quarter (+2.2% y/y) after increasing 2.5% in Q4, and hours worked lengthened 0.6% (0.8% y/y) following a 0.8% gain.

Compensation per hour increased 4.8% last quarter following a 3.7% Q4 rise. Despite the strength of these last two increases, y/y growth decelerated to 2.7% from a 6.8% high one year earlier. Nevertheless, the productivity decline raised unit labor costs by 5.7% (1.3% y/y) in Q1 versus expectations for a 5.2% increase. It followed a 2.0% gain during Q4 and was the strongest quarterly increase in a year.

Factory sector productivity surged 4.5% (1.5% y/y) during Q1’25 following three consecutive increases of roughly 0.5%. This strength was accompanied by a 6.2% rise (2.2% y/y) in hourly compensation which came after two consecutive increases of approximately 4.1%. The strength in productivity lowered the rise in unit labor costs to 1.6% from 3.8% in Q4. The y/y gain fell to 0.7% from 2.0% in Q4 and stood below the 6.2% y/y increase in Q1’24.

The productivity and labor cost data are available in Haver’s **USECON** database. The Action Economics expectations figures are in the **AS1REPNA** database.

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- Productivity declines with lower output.
- Compensation surge exacerbates labor market stress.
- Factory sector productivity surge lessens cost pressure.

U.S. Productivity Declines in Q1’25; Unit Labor Costs Surge

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The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) rose 0.6% (3.2% y/y) in March to 103.2 after rising 0.9% to 102.6 in February and rising 0.8% in January to 101.7. The level of home affordability has risen 14.8% from its low of 89.9 in October 2023. It remains 42.4% below the high of 179.2 in April 2020.

The rise in affordability in March occurred as the median price of an existing single-family home rose 1.8% (2.9% y/y) to $408,000 which was offset by a decline in mortgage rates to 6.73% from 6.92% in February. The price compared to the record $432,900 in June 2024. The decline in mortgage rates compared to a recent low of 6.26% in September of last year and a 7.70% high during October of 2023. It remained well above a December 2020 low of 2.73%. These changes lowered the principal & interest payment by 0.2% (+1.1% y/y) to $2,113 per month. That was well above the most recent low of $984 in February 2020. Monthly mortgage payments averaged a lessened 24.2% of income during March. They remained up from a low of 14.0% of income in April 2020.

The rise in housing costs in March was accompanied by improvement in median family income. It increased 0.4% (4.4% y/y) to a record $104,705 after rising 0.4% in February and 0.7% in January.

Housing affordability improved m/m across the country in March. The index edged 0.1% higher (2.8% y/y) to 134.5 in the Midwest. It remains the most affordable region of the country. In the South, the index 0.9% (5.4% y/y) to 106.6 and the affordability index in the Northeast increased 2.1% (-2.6% y/y) to 95.7. In the West, where homes are the least affordable, the index rose 0.8% (3.3% y/y) to 71.8 in March.

The Housing Affordability Index (HAI) equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. The HAI had exceeded 100 in each month since July 1990 and reached its all-time high of 213.3 in January 2013; since then, it fell below 100 for the first time in June 2022.

Data on Housing Affordability can be found in Haver’s **REALTOR** database. Median home sales prices are also available in **USECON**. Higher frequency interest rate data are found in **SURVEYS**, **WEEKLY**, and **DAILY**.

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- Home prices rise but mortgage rates decline.
- Median income improves.
- Affordability increases across the country.

U.S. Housing Affordability Improves Slightly in March

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Initial claims for unemployment insurance were 228,000 seasonally adjusted in the week ended May 3, down from 241,000 in the previous week, which was unrevised. For the latest week, the Action Economics Forecast Survey had expected a smaller decline to 233,000.

In the week ended April 26, the total number of unemployment insurance beneficiaries – also known as “continuing claims” – was 1.879 million, down from 1.908 million in the April 19 week.

The insured unemployment rate, that is, the number of beneficiaries as a percentage of covered employment, returned to its longstanding rate of 1.2% in the April 26 week; this rate has held that amount since continuously since the week of January 6, 2024, except for the prior week’s 1.3%.

As we do highlight in every week’s discussion, economic conditions vary widely across individual states and territories. In the week ended April 19, the highest unemployment rates were in New Jersey and Rhode Island (both at 2.48%), California (2.26%), Washington (2.14%) and New York (1.85%). The lowest were in Florida (0.36%), South Dakota (0.37%), Alabama (0.41%), Virginia (0.45%) and Nebraska (0.47%). Rates in other notable states include Illinois (1.78%), Pennsylvania (1.53%) and Texas (1.14%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

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- Continued claims for unemployment insurance decreased 29, 000 in the week ended April 26.
- Insured unemployment rate returns to longstanding 1.2%.
- Across the states, the insured unemployment rate ranges from 0.36% to 2.48%.

U.S. Initial Unemployment Insurance Claims Ease 13,000 in the May 3 Week

Andrew Cates

**The global business cycle** 
The recent sharp decline in the Future Output Balance in the global composite PMI survey reflects a sudden deterioration in global business expectations. The sweeping tariffs, introduced in April 2025, have generated heightened uncertainty around trade policy and sparked fears of retaliatory actions from key trading partners. As a result, businesses worldwide are scaling back their expectations for future output, wary of rising costs, disrupted demand flows, and a broader shift toward protectionism that could undermine global economic momentum.

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Note: The extreme declines in the Future Output Balance that were recorded in the early months of 2020 (at the height of the COVID pandemic) have been removed from this chart.

**Global supply chain pressures**
Still, despite the marked deterioration in global business expectations, this second chart below provides a reassuring counterpoint: as of now, there is little evidence that global supply chain pressures have materially intensified. Both the New York Fed’s Global Supply Chain Pressure Index and the Baltic Exchange Dry Index remain relatively subdued, especially compared to the pandemic-era spikes of 2020–2022. While there has been heightened concern following the April 2025 US tariff announcements, these trade policy shifts have yet to translate into measurable physical disruption in logistics or freight rates. The stability of these indices suggests that although sentiment has taken a hit, global shipping networks and supply flows are, for now, absorbing the shock. However, this calm may prove fragile if the policy environment hardens further or retaliatory trade actions begin to compound the strain.

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**Expectations for central banks’ policy rates** 
Adding to the picture of mounting economic caution, the latest Blue Chip Financial Forecasts survey reveals that expectations for policy easing over the next 12 months have become even more pronounced than in previous months. While earlier surveys had already pointed to a further extension of the global rate-cutting cycle, the latest results suggest forecasters now anticipate a deeper and more aggressive round of monetary easing—most notably from the US Federal Reserve, which is now expected to deliver nearly a full percentage point in rate cuts over the next 12 months. The sharp deterioration in business sentiment is reshaping the macro narrative: central banks are no longer simply guiding inflation lower, but are instead preparing to confront the risk of a deeper, demand-driven slowdown.

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**Energy prices and inflation** 
Adding further context to the growing expectations for policy easing, oil prices have dropped sharply in recent weeks—driven by mounting concerns over global growth, as reflected in weakening business sentiment and softer demand indicators. The chart below provides a longer-run perspective on why this matters: energy prices have historically played a central role in shaping the global inflation trajectory. The strong positive correlation (r = 0.83) between median world energy price inflation and median core consumer price inflation underscores the powerful pass-through effects energy costs can have on broader price dynamics. While core inflation tends to be stickier, this historical relationship makes clear that sustained declines in energy prices often foreshadow broader disinflationary trends.

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**Intangibles versus tangibles** 
Shifting focus from short-term cyclical risks to longer-term structural dynamics, the next chart below underscores a fundamental transformation in the composition of US investment: the economy has increasingly been built on intangibles. Over the past several decades, investment in intangible assets—such as software, intellectual property, R&D, and brand equity—has steadily climbed and, since the mid-2010s, has overtaken investment in both structures and equipment as a share of GDP. This shift reflects the rise of a knowledge-based, innovation-driven economy, but it also introduces new forms of vulnerability. Unlike physical capital, intangible assets rely heavily on trust, reputation, legal protections, and global openness. In this context, escalating trade frictions and a more confrontational US economic stance—as signalled by the recent tariff wave—risk eroding the goodwill and institutional credibility that underpin much of the value created by intangibles. If geopolitical uncertainty undermines the perceived reliability of US intellectual property protections or weakens global collaboration, it could pose a deeper structural challenge to future growth than any immediate cyclical downturn.

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**Investment in Artificial Intelligence**
The centrality of intangibles to the US growth model is nowhere more evident than in the explosion of private investment in artificial intelligence. As this chart illustrates, global AI investment has surged over the past decade—reaching new highs in 2024—and the United States has consistently accounted for the lion’s share of that spending. This reflects not only America’s previous leadership in frontier technologies but also its dependence on intangible capital, from algorithms and data infrastructure to human expertise and institutional trust. However, this dominance also underscores the strategic stakes of current policy choices. In an environment of rising trade tensions and potential fragmentation, the foundations of US leadership in AI—cross-border collaboration, data openness, and global market access—could be at risk.

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Financial market sentiment has rebounded in recent weeks, buoyed by signs of de-escalation in the US-led trade war and growing confidence that central banks—particularly the Federal Reserve—will step in with more rate cuts to cushion any fallout. Yet beneath the surface, a more sobering picture of the global economy persists. For example, latest PMI surveys reveal that global business expectations have slumped to their lowest levels since the pandemic, reflecting widespread unease about the growth outlook (chart 1). While supply chain pressures have so far remained contained, suggesting no repeat of the logistical chaos seen during the pandemic (chart 2), the latest Blue Chip Financial Forecasts survey reveals that forecasters are now pencilling in deeper and more widespread monetary easing than previously anticipated—an acknowledgment that demand is faltering (chart 3). Falling oil prices further reinforce this view: they are both a symptom of weakening global demand and a potential source of disinflation, reducing the urgency for central banks to maintain tight policy (chart 4). At the structural level, the US economy's increasing reliance on intangible assets—ranging from intellectual property to reputation—has made it more vulnerable to geopolitical frictions and the erosion of global trust (chart 5). This risk is compounded by America's dominant role in AI investment, a sector symbolic of both its economic strengths and its exposure to international perceptions (chart 6). The longer-term challenge, then, is not just navigating the current downturn, but ensuring that the institutional goodwill and cross-border openness that support the modern US economy are not sacrificed in a more fragmented and uncertain global order.

Charts of the Week: Relief Rally Meets Recession Risk

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At today’s meeting of the Federal Open Market Committee, the target range for the Fed funds rate was left unchanged at 4.25% to 4.50%. This followed reductions at three consecutive meetings in the fall of 2024. Rates remain below the high of 5.25% to 5.50% in place in mid-September. Today’s target range matched expectations in the Action Economics Forecast Survey.

The statement following the meeting indicated that, “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook has increased further. The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.”

“The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”

The Fed continued, “The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage backed securities.”

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- FOMC holds funds rate target at late-December level.
- Risk assessments include higher unemployment & inflation.

Economy in Brief: February 2010

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