Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020709a.jpg" width="353">
Chain store sales jumped 0.7% in the first week of July according to the BTM-UBSW survey. The rise followed a 0.9% decline the prior week.
Early-July sales were 0.4% above the June average.
The leading indicator of chain store sales published by BTM fell in the fourth week of June, reversing all of the gain the prior week.
During the last ten years there has been a 35% correlation between the year-to-year percent change in monthly chain store sales and the change in nonauto retail sales.

<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">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">7/6/02</th>
<th scope="col">6/29/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>415.6</td>
<td>412.9</td>
<td>3.7%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales jumped 0.7% in the first week of July according to the BTM-UBSW survey. The rise followed a 0.9% decline the prior week. Early-July sales were 0.4% above the June average. The leading indicator of chain store sales [...]

Weekly Chain Store Sales Up in Early July

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020708b.jpg" width="353">
Consumer borrowing rose 0.6% in May, quite a bit more than expected. April figures were little revised. Gains during the last three months are roughly equal to last year&#39;s monthly average of $9.0B. 
Revolving credit rose by a modest 0.3% m/m and generally has run at or below last year&#39;s pace except for this past April.
Nonrevolving credit rose 0.7%, up from 0.4% in each of the prior two months. That rate is slightly above the average monthly gain last year.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E103/@E10308/@E10308.HTM">Consumer Credit Outstanding</a></th>
<th scope="col">May m/m</th>
<th scope="col">April m/m</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$9.5B</td>
<td>$8.6B</td>
<td>5.7%</td>
<td>6.9%</td>
<td>10.2%</td>
<td>7.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$2.4B</td>
<td>$4.4B</td>
<td>2.4%</td>
<td>5.1%</td>
<td>11.5%</td>
<td>6.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonrevolving</td>
<td>$7.1B</td>
<td>$4.2B</td>
<td>8.2%</td>
<td>8.3%</td>
<td>9.2%</td>
<td>8.4%</td>
</tr>
</tbody>
</table>
Challenger Survey Indicates Layoffs Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 8, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020708a.jpg" width="353">
According to Challenger, Gray &amp; Christmas, announced job cuts remained below 100,000 in June for the second month.
The latest figures are an improvement in labor market conditions versus last year when layoffs averaged 160,000 per month.
Layoffs in June did rise slightly versus May, but remain down 24.1% versus last year.

</body>
</html>

Consumer borrowing rose 0.6% in May, quite a bit more than expected. April figures were little revised. Gains during the last three months are roughly equal to last year's monthly average of $9.0B. Revolving credit rose by a modest [...]

Consumer Credit Growth Strong

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020705a.jpg" width="353">
Payrolls rose somewhat less than expected last month and the modest May gain was revised down.
The modest rise in June payrolls was accompanied by a sharp 364,000 drop (-0.7% y/y) in household employment which pushed the unemployment rate up as expected. The labor force fell 293,000 (0.7% y/y).
Amongst industries, factory sector jobs fell and are down 11.3% from the peak in early 1998. Construction jobs rose in June but are down 1.2% so far this year. Jobs in service producing industries ticked up and the year-to-date gain is a meager 0.2%.
The one-month diffusion index for nonfarm payrolls fell to 49.1, up versus the November low of 39.3. The level still suggests little or no employment growth near term. 
The index of aggregate hours worked (employment times hours worked) rose in June but was up just slightly in 2Q versus the 1Q average. 
Average hourly earnings rose slightly more than expected following a downwardly revised May gain.
The employment figures for nonfarm payrolls are based on reports provided to the US Labor Department by businesses, while the figures from which the unemployment rate is derived are based on a survey of US households.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>36,000</td>
<td>24,000</td>
<td>-1.0%</td>
<td>0.2%</td>
<td>2.2%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-23,000</td>
<td>-27,000</td>
<td>-5.6%</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>-1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>34.3</td>
<td>34.2</td>
<td>34.2</td>
<td>34.2</td>
<td>34.4</td>
<td>34.5</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.4%</td>
<td>0.1%</td>
<td>3.3%</td>
<td>4.1%</td>
<td>3.9%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.9%</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.8%</td>
<td>4.0%</td>
<td>4.2%</td>
</tr>
</tbody>
</table>
</body>
</html>

Payrolls rose somewhat less than expected last month and the modest May gain was revised down. The modest rise in June payrolls was accompanied by a sharp 364,000 drop (-0.7% y/y) in household employment which pushed the unemployment [...]

June Payrolls Weak, Jobless Rate Up

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703a.jpg" width="353">
Light vehicle sales rose 5.2% last month versus May. The rise in sales was very slightly more than expected following a 9.7% decline in May. Vehicle sales in 2Q rose 1.2% from 1Q to an average of 16.50M units.
Sales of domestically built cars and trucks rose 4.2% m/m. 2Q sales of domestics rose 2.2% from the 1Q average.
Imported vehicle sales rose 9.4% vs. May. Sales of imports in 2Q fell 3.0% from the 1Q average.
Imports captured 19.6% of the US light vehicle market in 2Q02 versus 20.4% in 1Q and 17.8% last year.
Sales of cars (-5.5% y/y) and light trucks (-3.6% y/y) both rose last month versus May. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil.Units)</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>16.48</td>
<td>15.67</td>
<td>-4.5%</td>
<td>17.21</td>
<td>17.40</td>
<td>16.95</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Domestic</td>
<td>13.19</td>
<td>12.67</td>
<td>-7.2%</td>
<td>14.15</td>
<td>14.58</td>
<td>14.47</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imported</td>
<td>3.29</td>
<td>3.00</td>
<td>7.9%</td>
<td>3.06</td>
<td>2.82</td>
<td>2.48</td>
</tr>
</tbody>
</table>
Claims for Jobless Insurance Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 3, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703b.jpg" width="353">
Initial claims for unemployment insurance fell about as expected in the latest week. The prior week&#39;s level was revised up slightly.
Continuing claims for unemployment insurance rose slightly from the prior week&#39;s level which fell sharply and was revised down.
The four-week moving average of initial claims was little changed at 392,000 (-1.8% y/y). 
The insured rate of unemployment was stable at 2.9% for the fourth consecutive week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">6/29/02</th>
<th scope="col">6/22/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>382.0</td>
<td>393.0</td>
<td>-4.0%</td>
<td>405.8</td>
<td>299.8</td>
<td>297.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,699</td>
<td>23.3%</td>
<td>3,021</td>
<td>2,114</td>
<td>2,186</td>
</tr>
</tbody>
</table>
ISM Nonmanufacturing Index Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 3, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703c.jpg" width="353">
The Institute for Supply Management business activity index of the nonmanufacturing sector fell slightly more than expected last month following strength the month prior. 
The overall index has remained above 50, the dividing line for expansion and contraction, since February.
Of the seasonally adjusted subgroups, new orders were about unchanged, employment fell and imports rose. The not seasonally adjusted index of export orders was quite strong. 
The not seasonally adjusted index of prices fell for the second consecutive month. 
Business activity for the nonmanufacturing sector is a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index weights the components. 
During the last four years, there has been a 43% correlation between the level of the NAPM nonmanufacturing index and quarterly growth in real GDP in the service sector.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The nonmanufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>57.2</td>
<td>60.1</td>
<td>52.4</td>
<td>49.0</td>
<td>59.2</td>
<td>59.1</td>
</tr>
</tbody>
</table>
Factory Inventories Fell Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 3, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020703d.jpg" width="353">
Manufacturing inventories fell for the sixteenth consecutive month in May. April&#39;s decline was revised slightly deeper and figures back to 1999 also were revised.
Inventory decumulation continued strong across the board, notably in the metals industries. Inventories of computers rose for the third month this year. Furniture &amp; related products inventories rose after months of sharp decline since late 2000. 
Shipments rose slightly (-3.2% y/y) following two months of sharp gain.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Inventories</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Mfg Inventories</td>
<td>-0.4%</td>
<td>-0.3%</td>
<td>-8.6%</td>
<td>-8.0%</td>
<td>4.5%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

Light vehicle sales rose 5.2% last month versus May. The rise in sales was very slightly more than expected following a 9.7% decline in May. Vehicle sales in 2Q rose 1.2% from 1Q to an average of 16.50M units. Sales of domestically [...]

U.S. Light Vehicle Sales Recover

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020702a.jpg" width="353">
Chain store sales fell 0.9% in the last full week of June according to the BTM-UBSW survey. The decline was the first in five weeks.
June sales rose 2.0% from the May average.
The leading indicator of chain store sales published by BTM rose in the third week of June and has resumed the upward move begun this past April.
During the last ten years there has been a 40% correlation between the year-to-year percent change in monthly chain store sales and the change in general merchandise store sales.

<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">BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">6/29/02</th>
<th scope="col">6/22/02</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>412.9</td>
<td>416.7</td>
<td>3.6%</td>
<td>2.1%</td>
<td>3.4%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales fell 0.9% in the last full week of June according to the BTM-UBSW survey. The decline was the first in five weeks. June sales rose 2.0% from the May average. The leading indicator of chain store sales published by [...]

Weekly Chain Store Sales Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020701a.jpg" width="353">
The ISM Composite Index of manufacturing sector activity rose slightly more than expected last month. Consensus expectations were for a slight decline to 55.5. 
Higher production, employment and vendor performance (slower deliveries) fueled the gain in the composite index to its highest level since February 2000.
The new orders index fell but has remained in a relatively high range since earlier this year.
Inflation pressure rose sharply as the percentage of companies reporting lower prices fell to the lowest since August 2000. The percentage of companies reporting higher prices rose to the highest since April 2000.
Over the last twenty years there has been a 66% correlation between the ISM Composite Index and quarterly growth in chained GDP.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF02/@EF02.HTM">ISM Manufacturing Survey</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>56.2</td>
<td>55.7</td>
<td>44.3</td>
<td>43.9</td>
<td>51.6</td>
<td>54.6</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>65.5</td>
<td>63.0</td>
<td>42.8</td>
<td>43.0</td>
<td>64.8</td>
<td>54.2</td>
</tr>
</tbody>
</table>
Construction Spending Down in May 
by <a href="/comment/Moeller.html">Tom Moeller</a> July 1, 2002


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/020701b.jpg" width="353">
The value of construction put in place fell unexpectedly in May. A slight gain had been expected. It was the second decline in three months following hefty gains in January and February. Figures were revised back to 1999. Growth in 2001 was lowered substantially in all sectors.
Residential building fell for the first month since October. Activity is up 7.4% versus last year and has been strongest in the multi-unit sector. 
Nonresidential building activity fell sharply for the third month this year, continuing a trend of decline that began last year. Industrial and office building has fallen notably but has been offset somewhat by gains in the hospital and educational areas.
Spending by governments rose for the fourth month this year driven by gains in the education and military sectors.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E907/@E90701/@E90701.HTM">Construction Put-in-place</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
<th scope="col">1999</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-0.7%</td>
<td>0.4%</td>
<td>0.6%</td>
<td>2.5%</td>
<td>7.3%</td>
<td>8.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Residential</td>
<td>-0.8%</td>
<td>0.4%</td>
<td>7.4%</td>
<td>3.3%</td>
<td>7.4%</td>
<td>11.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-3.1%</td>
<td>0.1%</td>
<td>-14.4%</td>
<td>-3.1%</td>
<td>7.1%</td>
<td>1.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Public</td>
<td>1.9%</td>
<td>0.1%</td>
<td>3.1%</td>
<td>7.4%</td>
<td>5.4%</td>
<td>10.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

The ISM Composite Index of manufacturing sector activity rose slightly more than expected last month. Consensus expectations were for a slight decline to 55.5. Higher production, employment and vendor performance (slower deliveries) [...]

ISM Index Rose Further

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

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

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

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


Privacy Policy

Disclaimer

Contact us

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

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Tian Yong Woon

This week, we focus on India’s economic developments, which continue to demonstrate resilience amid persistent global headwinds. In Q1, GDP growth accelerated to its fastest pace in a year, surpassing expectations. Services remained the primary growth driver, bolstered by gains in construction and manufacturing (chart 1). Despite widespread global downgrades, the World Bank still expects India to be the fastest-growing major economy in 2025.

While services have long underpinned India’s growth, the country is gradually pivoting toward manufacturing, including higher-end, IP-intensive sectors. Progress has been made—such as attracting iPhone production—but manufacturing has yet to significantly shift the composition of GDP, which remains heavily weighted toward services (chart 2). India’s rising role as a “China Plus One” destination has enhanced its global appeal, though the shift has drawn criticism from former US President Trump, who favours bringing manufacturing back to the US.

India’s strategic ties with both the US and China require a careful balancing act. The US is India’s top export destination, with major exports including pharmaceuticals, jewellery, and smartphones (chart 3). At the same time, India relies heavily on China for critical inputs such as Key Starting Materials (KSMs) and Active Pharmaceutical Ingredients (APIs), both vital to its pharmaceutical sector (chart 4). As a result, India is seeking to deepen trade relations with the US while avoiding actions that might provoke China. Trade negotiations with the US are reportedly progressing, with an interim deal possible ahead of Trump’s July 9 tariff deadline.

On the monetary front, the Reserve Bank of India cut policy rates by 50 bps in June and announced a phased 100 bps reduction in the Cash Reserve Ratio (CRR), in response to falling inflation and risks of weaker demand (chart 5). As a partial consequence, the rupee has underperformed its Asian peers—though the primary pressures stem from persistent foreign outflows and narrower interest rate differentials (chart 6).

**India’s economic developments**
India’s economy grew faster than expected in calendar Q1, with growth accelerating to 7.4% y/y—exceeding economists’ expectations and marking the fastest growth rate in a year. By sector, and based on gross value added at basic prices, services remained the primary growth driver, as shown in chart 1. However, contributions from the construction and manufacturing sectors also improved. More broadly, many investors and economists continue to view India as one of the few economies expected to deliver robust growth this year. This remains a rare distinction, given the growth-dampening effects of US tariffs and the associated retaliatory actions. That said, recent US-China breakthroughs on trade-related agreements have eased much of this latent risk.

Despite enacting widespread forecast downgrades in its latest projections just last week, the World Bank still expects India to post the fastest growth among major economies in 2025. Nonetheless, India’s outlook has been somewhat dampened by weaker export potential and slowing investment amid rising global trade barriers. Similarly, panellists in our recent Blue Chip Economic Indicators survey continued to rank India as the top-growing major economy among those covered.


250616T1.jpg

Over the years, India has positioned itself as a services-oriented economy, a strategy that initially offered a degree of insulation from external shocks. More recently, however, the country has begun shifting its focus toward manufacturing—not only at the low- and mid-range levels but also in high-end, intellectual property (IP)-intensive sectors. In support of this pivot, India has been gradually improving its IP protection framework. Nonetheless, it remains on the US Trade Representative’s 2025 Priority Watch List, partly due to what has been described as “inconsistent” progress on IP protection and enforcement. In more traditional forms of manufacturing, India has made several high-profile strides, including securing production capacity for iPhones. However, despite such headline-grabbing developments, the shift has yet to meaningfully alter the structure of India’s GDP (chart 2), which remains heavily services-dependent—likely due to the limited scale of manufacturing gains thus far. 

India has also emerged as a key beneficiary of the “China Plus One” strategy, as global firms seek to diversify production away from China amid rising geopolitical tensions, particularly with the US. These concerns—recently reinforced by US policy actions—have helped position India as a partial but increasingly viable alternative. That said, the shift has not been without controversy. The redirection of US-linked manufacturing capacity toward India has drawn criticism from former President Donald Trump, who has advocated for bringing such production back to American soil—even though the current US manufacturing landscape may be ill-equipped to fully absorb it.

250616T2.jpg

**India’s relationship with the US and China**
Amid ongoing US-China tensions, India finds itself in a complex—but potentially advantageous—position. On one hand, India is heavily reliant on the US as a key export market, with the US currently being its top export destination. On the other hand, India depends on China for critical inputs across several major sectors. Among India’s key exports to the US are pharmaceutical products, jewellery, and, more recently—as mentioned earlier—smartphones (see chart 3). Given this dual dependency, it is unsurprising that India is eager to maintain constructive trade relations with the US. India-US trade talks are reportedly progressing well, with an interim deal likely before President Trump’s 90-day tariff pause ends on July 9.

250616T3.jpg

At the same time, India remains highly dependent on China for low-level inputs, which may temper its willingness to appear too closely aligned with the US or to pursue a trade deal perceived as unfavourable to China. This strategic caution stems from India’s reliance on key material imports from China, including rare earth elements (REEs), recently spotlighted by China’s export restrictions. REEs are critical to several industries, notably automotive manufacturing. India is also heavily dependent on China for key starting materials (KSMs) and active pharmaceutical ingredients (APIs), both essential to its large and growing pharmaceutical export sector (see chart 4). As a result, India must carefully balance its strategic interests—deepening ties with the US while avoiding actions that could provoke a negative response from China amid rising geopolitical tensions.

250616T4.jpg

**India’s financial and monetary developments**
In response to the potentially demand-dampening effects of ongoing US tariffs, the Reserve Bank of India (RBI) cut policy rates by a larger-than-expected 50 bps at its June meeting. The move was supported by a sharp decline in CPI inflation, which fell well below the RBI’s 4% target amid easing commodity prices. However, the central bank warned that it now has “very limited” policy space left to support growth, a concern reflected in its shift in policy stance from “accommodative” to “neutral.” In addition, the RBI announced a 100 bps cut to the Cash Reserve Ratio (CRR), to be implemented in four tranches of 25 bps each from September to November, ultimately bringing the CRR down to 3%. This measure aims to release additional liquidity into the financial system.

250616T5.jpg

Lastly, we turn to the Indian rupee, which has underperformed relative to its Asian peers so far this year (see chart 6), despite the broad-based weakening of the US dollar. Weighing on the rupee have been persistent foreign equity outflows—substantial on a year-to-date basis—along with some net FDI outflows and other external pressures. The RBI’s recent interest rate cuts, though necessary to support the domestic economy, have also reduced the rupee’s appeal by narrowing interest rate differentials. Investor sentiment was further shaken during the previous wave of US-China tensions, prompting capital flight from emerging markets, including India. While some of that risk aversion has eased amid a temporary cooling in US-China rhetoric, caution remains warranted, as the US appears poised to announce a new round of unilateral tariffs in the coming weeks.

250616T6.jpg

Asia

Economic Letter from Asia: India Rising

250613F20.jpg

250613G20.jpg

The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) fell 2.3% (+6.2% y/y) in April to 101.0 after rising moderately in each of the prior four months. The recent high was 104.9 in September. The level of home affordability remained 12.3% higher than its low of 89.9 in October 2023. It remains 43.6% below the high of 179.2 in April 2020.

The decline in affordability in April occurred as the median price of an existing single-family home rose 2.6% (1.7% y/y) to $418,000, and mortgage rates rose to 6.81% from 6.73% in March. The price compared to the record $432,900 in June 2024. The rise in mortgage rates left them up from a recent low of 6.26% in September of last year and below a 7.70% high in October of 2023. It remained well above a December 2020 low of 2.73%. These changes raised the principal & interest payment by 3.5% (-1.0% y/y) to $2,182 per month. That was well above the most recent low of $984 in February 2020. Monthly mortgage payments averaged a higher 24.8% of income during April. They remained up from a low of 14.0% of income in April 2020.

The rise in housing costs in April was accompanied by improvement in median family income. It increased 1.0% (5.1% y/y) to a record $105,791 after rising 0.4% in each of the prior two months.

Housing affordability declined m/m across the country in April. The index fell 3.7% (+4.2% y/y) to 130.1 in the Midwest. It remains the most affordable region of the country. In the South, the index declined 1.1% (+8.3% y/y) to 105.6 and the affordability index in the Northeast declined 3.9% (+0.5% y/y) to 92.0. In the West, where homes are the least affordable, the index fell 1.1% (+7.7% y/y) to 71.0 in April.

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.

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**.

**Inflation Expectations** from the Federal Reserve Bank of Cleveland is available [here](https://www.clevelandfed.org/indicators-and-data/inflation-expectations).

250613H20.jpg

250613I20.jpg

- Home prices & mortgage rates rise.
- Median income improves.
- Affordability falls across country.

U.S. Housing Affordability Declines in April

Andrew Cates

**The Blue Chip growth consensus**
Our first chart this week depicting shifts in consensus growth expectations highlights significant divergences in the economic outlook over the past six months and the more recent one-month period. Major downward revisions over the past six months have prominently affected economies such as South Korea, Mexico, Australia and Canada, indicating heightened vulnerability to external shocks, particularly from disruptions linked to intensified US trade policies. Conversely, China has shown a slight improvement, possibly due to an effective policy response. The recent one-month adjustments, however, exhibit much smaller and generally modest upward revisions, suggesting some stabilization or cautious optimism amid ongoing uncertainties.

250612Z1.jpg

**The Blue Chip inflation consensus**
This next chart tracking consensus forecasts for CPI inflation in 2025 across the US, Euro area, and China reveals a striking divergence in inflation expectations. In the US, inflation projections rose steadily through late 2024 and early 2025, peaking above 3% before easing slightly. This upward drift likely reflects the lagged impact of the US economy's relative strength in 2024, including robust consumer demand and tight labour markets, rather than more recent tariff-related pressures. By contrast, Euro area forecasts have remained relatively low and stable, suggesting more subdued domestic dynamics and tighter policy. Meanwhile, China's CPI forecast has fallen sharply over the same period pointing to deepening demand-side weakness and lingering deflationary risks.

250612Z2.jpg

**Supply chain pressures** 
Looking ahead, the tight correlation between the New York Fed’s Global Supply Chain Pressure Index and producer price inflation for advanced economies underscores the risks posed by US trade policies. As supply chain pressures potentially intensify—partly due to renewed protectionist measures—global producer price pressures could again escalate, creating renewed inflationary challenges and complicating central bank policy calibration.

250612Z3.jpg

**US policy uncertainty**
As the chart below illustrates, US monetary policy uncertainty remains elevated, even as it has eased from its recent peaks. This persistent uncertainty continues to drive market volatility, reflecting investor unease over the Federal Reserve’s future policy path in the face of tariff-related disruptions and inflationary pressures. The chart specifically shows a potentially valuable tool for tracking this uncertainty – the Kansas City Fed’s measure of Policy Rate Uncertainty (KC PRU). This index is constructed from the prices of financial options linked to future short-term interest rates—rates that closely track the federal funds rate—and captures one-year-ahead uncertainty at a daily frequency dating back to the late 1980s.

250612Z4.jpg

**The UK labour market** 
The UK labour market data released this week revealed a sharp deterioration, with substantial job losses indicated by payroll data alongside a rising unemployment rate. This surprising weakness not only signals immediate economic challenges but also complicates the BoE’s monetary policy response at a time when policymakers face persistent inflationary pressures and broader macroeconomic uncertainty.

250612Z5.jpg

**Energy and growth**
Over the longer term, the strong historical correlation between primary energy consumption and GDP growth in advanced economies underscores the critical role of energy in sustaining economic stability. Persistently high real energy prices and complex energy transition processes present significant obstacles, particularly for energy-intensive economies like the UK, which seek sustainable growth trajectories amid heightened geopolitical and trade uncertainties.

250612Z6.jpg

Financial markets have experienced considerable gyrations in recent weeks, reflecting substantial shifts in investor expectations and heightened uncertainty, largely driven by ongoing US tariff policies. Over the past six months, consensus growth forecasts have seen notable downward revisions across most major economies, though these have been partially offset by modest upward revisions in the past month (chart 1). Concurrently, consensus inflation projections have diverged significantly, with upward pressures in the US contrasting with deflationary risks in China (chart 2). Compounding these US issues, renewed protectionism appears to be pressuring global supply chains again, potentially increasing inflation risks and sustaining elevated monetary policy uncertainty (charts 3 and 4). This week's particularly weak UK employment data highlight immediate domestic economic fragility, while longer-term economic stability remains challenged by persistently high real energy prices and complexities surrounding the energy transition (charts 5 and 6).

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/2K5yn5mktem6BKoNjOxNI6?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: What’s Consensus?

250612J8.jpg

250612K8.jpg

The Producer Price Index for final demand rose 0.1% (2.6% y/y) during May after falling 0.2% in April, revised from down 0.5%, and easing 0.1% in March, revised from unchanged, according to the Bureau of Labor Statistics (BLS). The Action Economic Forecast Survey expected a 0.2% increase in May. Producer prices excluding food, energy & trade services also edged up 0.1% (2.7% y/y) after falling an unrevised 0.1% in April and rising an unrevised 0.2% in March. The PPI excluding food and energy (the former core index) rose 0.1% last month (3.0% y/y) after declining 0.2% in April, revised from down 0.4%, and rising 0.3% in March, revised from 0.4%. A 0.3% increase had been expected.

A 0.1% increase (3.2% y/y) in final demand services prices held back overall pricing pressure last month and followed a 0.4% decline. Final demand trade services prices rose 0.4% (4.1% y/y) after falling 0.5%, while the trade of finished goods index rose 0.3% (3.9% y/y) following a 0.3% April decline. Transportation & warehousing prices fell 0.2% (+2.3% y/y) after a 0.1% improvement in April. Prices for final demand services less trade, transportation, and warehousing held steady last month (+3.0% y/y) after falling 0.3% in April.

The price index for final demand goods less foods & energy increased 0.2% (2.4% y/y) during May following a 0.3% increase. Nondurable consumer goods prices less food & energy rose 0.2% (2.2% y/y) after rising 0.4% in April. Durable consumer goods prices rose 0.4% (2.1% y/y) following a 0.2% rise. The private capital equipment price index improved 0.4% (3.0% y/y) following a 0.3% gain. Government prices less food & energy rose 0.2% (2.6% y/y) after rising 0.4% in April.

Food prices edged 0.1% higher (3.5% y/y) during May after falling 0.9% in April. Consumer good prices rose 0.1% (4.3% y/y) following a 1.2% decline. Energy prices for final demand held steady (-4.4% y/y) last month after rising 0.1% in April. Finished consumer energy prices rose 0.8% (-3.9% y/y) after holding steady in April.

Construction costs rose 0.3% (2.0% y/y) in May after falling 0.5% in April.

Prices for intermediate demand of processed goods edged 0.1% higher (1.9% y/y) in May after rising 0.3% in April. Processed energy goods prices fell 1.2% following a 0.4% rise while processed foods prices rose 0.5% after falling 0.9% in April.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s **USECON** database. Further detail is contained in **PPI** and **PPIR**. The expectations figures are available in the **AS1REPNA** database.

250612L8.jpg

250612M8.jpg

- Annual increase remains below January peak.	
- Core price gain slows y/y.
- Final demand goods price increase is steady y/y while services decelerate.

U.S. Producer Price & Core Price Indexes Edge Higher in May

Kathleen Stephansen, CBE

250612A5.jpg

250612B5.jpg

Initial claims for unemployment insurance were 248,000 in the week ending June 7, unchanged from the revised level in the week ending May 31. The previous week’s level was revised up by 1,000 from 247,000. The Action Economics Forecast Survey had expected 241,000. These data are seasonally adjusted by the Department of Labor. The 4-week moving average was 240,250, an increase of 5,000 from the previous week’s average of 235,250, which was revised up 250 from 235,000. It also is the highest level for this average since August 26, 2023, when it was 245,000.

The total number of unemployment insurance beneficiaries – also known as “continuing claims” – in the week ended May 31 was 1.956 million, up 54,000 from 1.902 million, revised from 1.904 million in the prior week. The Department of Labor reported that this is the highest level for insured unemployment since November 13, 2021, when it was 1,970,000. The 4-week moving average was 1.915 million, an increase of 19,750 from the previous week’s level of 1.895 million. This is the highest level for this average since November 27, 2021, when it was 1.924 million.

The insured unemployment rate for the week ending May 31, that is, the number of unemployment beneficiaries as a % of covered employment, edged up to 1.3% from the prior week’s 1.2%.

Economic conditions vary widely across states and territories. In the week ended May 24, the highest unemployment rates were in New Jersey (2.22%), Washington (2.06%), California (2.03%), Rhode Island (1.96%), and Massachusetts (1.87%). The lowest rates were in South Dakota (0.28%), Florida (0.36%), Alabama (0.45%), North Carolina (0.47%), Tennessee (0.48%), and Kentucky (0.49%). Rates in other notable states include Illinois (1.61%), New York (1.55%), Pennsylvania (1.46%) and Texas (1.13%). 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.

250612C5.jpg

250612D5.jpg

- Initial claims for unemployment insurance were unchanged in the June 7 week.
- Total beneficiaries rose by 54,000 in the May 31 week.
- The insured unemployment rate ticked up to 1.3%.