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/031209a.jpg" width="353">
Chain store sales slumped 2.5% last week as two snowstorms blanketed the Northeast region of the US, according to the BTM-UBSW survey. The decline followed a 0.1% dip in sales during Thanksgiving week.
Sales during all of November rose 0.5% versus the prior month. That followed a 0.6% m/m decline in October.
During the last five years there has been a 61% correlation between the year-to-year percent change in the BTM-UBSW measure of chain store sales and the change in non-auto retail sales less gasoline.
The BTM-UBSW retail chain-store sales index is constructed using the same-store sales reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
Analysis from the Federal Reserve Bank of New York exploring what chain store sales indicate about consumer spending can be found <a href="http://www.newyorkfed.org/research/epr/96v02n2/9610harr.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"> <a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM"> BTM-UBSW (SA, 1977=100)</a></th>
<th scope="col">12/06/03</th>
<th scope="col">11/29/03</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Retail Chain Store Sales</td>
<td>412.2</td>
<td>422.8</td>
<td>4.9%</td>
<td>3.6%</td>
<td>2.1%</td>
<td>3.4%</td>
</tr>
</tbody>
</table>
FOMC Indicates "Accommodation Can Be Maintained for a Considerable Period" 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 9, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031209b.jpg" width="353">
As expected, the Federal Reserve left the target rate for federal funds unchanged at 1.00%. The discount rate also was left unchanged at 2.00%.
The decision was unanimous.
The press release which accompanied the Fed&#146;s action contained the following statement. &quot;The evidence accumulated over the intermeeting period confirms that output is expanding briskly, and the labor market appears to be improving modestly.&quot;
Surprisingly, the press release also indicated that &quot;... with inflation quite low and resource use slack, the Committee believes that policy accommodation can be maintained for a considerable period.&quot; Most economists had expected the latter phrase would be omitted.
The complete text of the Fed&#39;s latest press release can be found <a href="http://www.federalreserve.gov/boarddocs/press/monetary/2003/20031209/default.htm"> here</a>.
The stock market&#39;s reaction to Federal Reserve policy is explored by the Federal Reserve Bank of New York <a href="http://www.newyorkfed.org/research/staff_reports/sr174.html"> here</a>.

</body>
</html>

Chain store sales slumped 2.5% last week as two snowstorms blanketed the Northeast region of the US, according to the BTM-UBSW survey. The decline followed a 0.1% dip in sales during Thanksgiving week. Sales during all of November [...]

Chain Store Sales Buried by Snow

Louise Curley

<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/031208a.jpg" width="353">
This is the week for the release of a number of measures of Japanese consumer and business sentiment. A report on consumer sentiment is due on Wednesday and the Bank of Japan&#39;s quarterly survey of business sentiment, known as theTankan is due on Friday. Today we have the Ministry of Finance&#39;s measure of business confidence and the Japanese Economy Watchers Survey.
The latter, a relatively new measure begun in 2000, is intended to provide a picture of present and future region-by-region economic trends. It is a monthly diffusion index. The Economy Watchers Survey currently covers eleven regions across the country and is based on the appraisals of 2,050 people. Opinions on the outlook for household and corporate activity, retail sales and employment, for example, are given. The results are coordinated by the Japan Economic Research Institute.
After rising in each month since March, the future outlook for the total and all of the components of the Economy Watchers Survey fell in November. However they were all between 20 and 40% above year ago figures. Even with the decline in November, there is a good chance that the fourth quarter average will, at worst, equal the third quarter average.
In contrast, the MOF&#39;s measure of business confidence among large corporations increased 10.8 percentage points from the third quarter to the fourth, while confidence among medium sized corporations rose 7.1 point and confidence among small corporation, 8.2 points. Although confidence has improved in all corporations, it is still in negative territory among medium and small sized businesses. However, the improvements over year ago figures show a significant improvement in business confidence.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;Economy Watchers Survey&nbsp;</th>
<th scope="col">Nov 03</th>
<th scope="col">Oct 03</th>
<th scope="col">Nov 03&nbsp;</th>
<th scope="col">M/M %</th>
<th scope="col">Y/Y&nbsp; %</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>48.5</td>
<td>51.1</td>
<td>36.0</td>
<td>-5.09</td>
<td>27.63</td>
<td>43.0</td>
<td>39.7</td>
<td>51.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Household</td>
<td>47.0</td>
<td>50.4</td>
<td>37.5</td>
<td>-6.75</td>
<td>25.33</td>
<td>43.0</td>
<td>41.1</td>
<td>50.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Corporate</td>
<td>49.3</td>
<td>50.8</td>
<td>38.4</td>
<td>-2.95</td>
<td>28.39</td>
<td>43.2</td>
<td>37.8</td>
<td>53.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail Sales</td>
<td>46.3</td>
<td>49.4</td>
<td>37.3</td>
<td>-6.20</td>
<td>24.13</td>
<td>43.0</td>
<td>40.9</td>
<td>48.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Employment</td>
<td>56.2</td>
<td>57.0</td>
<td>40.1</td>
<td>-1.40</td>
<td>40.15</td>
<td>42.3</td>
<td>34.3</td>
<td>60.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;MOF&#39; Business Confidence</td>
<td>4Q 03</td>
<td>3Q 03</td>
<td>4Q 02</td>
<td>Q/Q %</td>
<td>Y/Y %</td>
<td>2002</td>
<td>2001</td>
<td>2000</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Large Corporations</td>
<td>5.6</td>
<td>-5.2</td>
<td>-6.6</td>
<td>10.8</td>
<td>12.2</td>
<td>-11.3</td>
<td>-14.6</td>
<td>5.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Medium Corporations</td>
<td>-6.0</td>
<td>-13.1</td>
<td>-16.4</td>
<td>7.1</td>
<td>10.4</td>
<td>-19.6</td>
<td>-21.8</td>
<td>-8.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Small Corporations</td>
<td>-20.0</td>
<td>-28.2</td>
<td>-32.8</td>
<td>8.2</td>
<td>12.8</td>
<td>-35.3</td>
<td>-34.4</td>
<td>-23.3</td>
</tr>
</tbody>
</table>
</body>
</html>

This is the week for the release of a number of measures of Japanese consumer and business sentiment. A report on consumer sentiment is due on Wednesday and the Bank of Japan's quarterly survey of business sentiment, known as [...]

Business Confidence in Japan in Sharp Rise Over Last Year

Carol Stone, CBE

<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/031205c.jpg" width="353">
Over the last three months, the job market in Canada has been stronger than in the US. In that time frame, Canadian labor force employment has risen 165,800, a substantial 4.3% annual rate of growth. In the US, the comparable household survey employment measure is up at &quot;just&quot; a 2.9% pace. The unemployment rate in Canada has fallen from 8.0% in September to 7.5% last month. Thus, the Canadian job situation is showing a distinct improvement after a sinking spell in the middle of the year.
Among individual industries in November, labor force employment rose the most in manufacturing, 23,700. That key sector had been flat in October; it tends to be fairly erratic from month to month, so more evidence will be needed to conclude that factory employment is actually on a rising path. The trade sector had the second largest increase last month and is distinctive for achieving three successive increases, all of relatively good size. In contrast, earlier increases in health care and finance were not sustained, but information and hospitality sectors turned higher in October and November. Thus, employment patterns are uneven among industries, suggesting some fragility to the job gains.
That said, the majority of the new jobs represent full-time employment. And labor force participation remains high. Indeed, the participation rate has been 67.6% in two of the last three months, the highest ever (preceding high was 67.5% in early 1990). Moreover, the employment rate, at 62.5% several months of this year, is also a record high. Thus, the demographic forces in the labor market suggest it is strong, attracting potential workers and keeping them employed. By comparison, the employment rate in the US was 62.4% last month and has hovered just below that in Canada for much of 2003. This is a rare occurrence over the 28-year history of the Canadian data, which has seen the US rate nearly always higher and in 1996 more than 5 points above the Canadian rate.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Nov&nbsp; 2003</th>
<th scope="col">Oct&nbsp; 2003</th>
<th scope="col">Sept&nbsp; 2003</th>
<th scope="col">Year/Year</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Change in Total Employment (thous/ annualized % change)</td>
<td>+54 (+4.2%)</td>
<td>+65 (+5.1%)</td>
<td>+46 (+3.6%)</td>
<td>+22* (+1.7%)</td>
<td colspan="3">Dec/Dec % Change</td>
</tr>
<tr>
<td class="firstcol">3.7%</td>
<td>0.1%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate (%)</td>
<td>7.5%</td>
<td>7.6%</td>
<td>8.0%</td>
<td>7.5% (Nov 2002)</td>
<td colspan="3">Annual Average</td>
</tr>
<tr>
<td class="firstcol">7.6%</td>
<td>7.2%</td>
<td>6.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

Over the last three months, the job market in Canada has been stronger than in the US. In that time frame, Canadian labor force employment has risen 165,800, a substantial 4.3% annual rate of growth. In the US, the comparable [...]

Canada Job Gains Continue

<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/031205a.jpg" width="353">
Non-farm payrolls rose a less than expected 57,000 in November.Consensus expectations were for a 150,000 rise. Though the gain in October payrolls was revised up slightly to 137,000, September payrolls were revised down to +99,000 from +125,000.
From the separate household survey, the unemployment rate fell to 5.9% versus expectations for 6.0%. Employment surged another 589,000 (1.5% y/y).
The labor force also surged, up 484,000 (1.4% y/y), as the number of discouraged workers fell sharply.
The one-month diffusion index for private non-farm payrolls rose sharply to 54.7 from an upwardly revised October reading of 53.6. This was the strongest breadth of employment gain since December 2000.
Manufacturing sector payrolls fell another 17,000 (-3.6% y/y), but the one-month diffusion index for factory payrolls improved to 42.3, the highest level since July 2000. Weakness in factory sector jobs was notable last month in nondurable goods industries.
Service producing jobs rose 64,000 (0.2% y/y). The gain was held back by declines in both the financial and in the retail trade industries. Temporary help services jobs were again strong, up 20,800 (5.6% y/y). Education &amp; health services jobs also rose a firm 34,000 (1.9% y/y). Government sector jobs rose just 7,000 (-0.2% y/y).
Construction jobs rose 10,000 (1.6% y/y).
Average hourly earnings rose just 0.1% (2.1% Y/Y), but earnings in the factory sector rose 0.2% (2.3% Y/Y).
The index of aggregate hours worked rose 0.2% and so far in 4Q are up at a 2.5% annual rate versus 3Q. Hours worked fell in 3Q versus 2Q.

<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">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>57,000</td>
<td>137,000</td>
<td>-0.2%</td>
<td>-1.1%</td>
<td>0.0%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-17,000</td>
<td>-14,000</td>
<td>-3.6%</td>
<td>-6.9%</td>
<td>-4.8%</td>
<td>-0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.9</td>
<td>33.8</td>
<td>33.8</td>
<td>33.9</td>
<td>34.0</td>
<td>34.3</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.1%</td>
<td>0.1%</td>
<td>2.1%</td>
<td>2.9%</td>
<td>3.8%</td>
<td>3.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.9%</td>
<td>6.0%</td>
<td>5.9%</td>
<td>5.8%</td>
<td>4.8%</td>
<td>4.0%</td>
</tr>
</tbody>
</table>
OECD Leaders Firm Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 5, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031205b.jpg" width="353">
The Index of Leading Indicators for the Major Seven OECD Countries rose 1.0% (6.5% y/y) in October for the seventh consecutive firm monthly gain.
Gains amongst the member country leading indexes again were broad and strong. The leading index for the European Union rose 0.7% (3.9% y/y).
In France, the leading index gained 0.7% (3.2% y/y), the sixth strong gain in as many months. The leaders in Germany boomed 1.3% (6.0% y/y but in Italy the leaders fell 0.2% (2.0% y/y).
In Canada the leading index jumped 1.1% (6.4% y/y) but in the U.K. the leaders only squeaked out a 0.1% uptick (0.2% y/y). Leaders in Japan were little changed (3.7% y/y) for the first month since April.
Leading indicators in the United States surged 1.9% (9.9% y/y).
The latest increase pulled the OECD leading index above its trend level.
Visit the OECD&#39;s website at this <a href="http://www.oecd.org/home/">website</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/OECDMEI/OECDMEI.HTM"> OECD Main Economic Indicators</a></th>
<th scope="col"> Oct</th>
<th scope="col"> Sept</th>
<th scope="col"> Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">OECD Major Seven - Leading Index (Trend Restored)</td>
<td>125.0</td>
<td>123.8</td>
<td>6.5%</td>
<td>4.1%</td>
<td>-2.3%</td>
<td>3.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; European Union</td>
<td>121.2</td>
<td>120.4</td>
<td>3.9%</td>
<td>3.1%</td>
<td>-1.9%</td>
<td>3.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Japan</td>
<td>104.9</td>
<td>104.9</td>
<td>3.7%</td>
<td>0.8%</td>
<td>-3.1%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; United States</td>
<td>139.1</td>
<td>136.5</td>
<td>9.9%</td>
<td>5.6%</td>
<td>-2.7%</td>
<td>2.7%</td>
</tr>
</tbody>
</table>
Factory Orders Surge, Inventories Unchanged 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 5, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031205d.jpg" width="353">
Factory orders surged an expected 2.2% in October. The advance report of a jump in durable goods orders was little revised and October orders show a 3.4% (8.4% y/y) pop. Non-durable goods orders rose just 0.7%. That was held back by a 0.7% decline in petroleum refinery orders (shipments) which followed a 4.0% September decline.
Manufacturing inventories were unchanged following five consecutive months of decline. A turn toward inventory accumulation occurred in the electronic products, defense aircraft and miscellaneous categories, but inventories of computers, furniture, and automobiles continued down.
Factory shipments rose 0.7%, but the gain was held back by a 1.4% decline (-2.3% y/y) in shipments from the transportation sector. Shipments excluding transportation jumped 1.1% (4.3% y/y).

<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"> Factory Survey</a> (NAICS)</th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>0.0%</td>
<td>-0.3%</td>
<td>-1.1%</td>
<td>-1.8%</td>
<td>-6.1%</td>
<td>3.8%</td>
</tr>
<tr>
<td class="firstcol">New Orders</td>
<td>2.2%</td>
<td>1.4%</td>
<td>6.6%</td>
<td>-1.9%</td>
<td>-6.7%</td>
<td>5.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>0.7%</td>
<td>1.8%</td>
<td>3.2%</td>
<td>-2.0%</td>
<td>-5.4%</td>
<td>4.2%</td>
</tr>
<tr>
<td class="firstcol">Unfilled Orders</td>
<td>1.6%</td>
<td>0.4%</td>
<td>1.9%</td>
<td>-6.1%</td>
<td>-5.9%</td>
<td>8.7%</td>
</tr>
</tbody>
</table>
</body>
</html>

Non-farm payrolls rose a less than expected 57,000 in November.Consensus expectations were for a 150,000 rise. Though the gain in October payrolls was revised up slightly to 137,000, September payrolls were revised down to +99,000 [...]

U.S. Non-farm Payrolls Up Less Than Expected

<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/031204b.jpg" width="353">
German unemployment fell again last month, a third successive decrease and the fifth in the last seven months. In a press report accompanying release of the November data, government officials attribute this improvement to several policies aimed at fostering a market for temporary workers and subsidizing self- employment. The unemployment rate remained at 10.5% for a third month, as the rate in eastern Germany edged down 0.1%.
At the same time, employment in Germany has yet to turn higher. These data lag by two months and were just reported today for September, which saw a decrease of 29,000. The monthly contraction is moderating, though, and two other reports suggest room for some optimism that an upturn could develop soon. The November Purchasing Managers&#39; survey published yesterday for the services sector showed a 2.8-point rise in the employment component; as noted here in yesterday&#39;s Commentary, it remains below the 50% up/down dividing line, but is certainly headed in the right direction. Today, the Federal Statistics Office also published factory orders for October. They rose 1.8% from September, with a 1.1% rise in foreign orders accompanying a sharp 2.4% advance in domestic orders. The local orders had also been up 3.0% in September. Thus, better prospects in both services and manufacturing may help generate outright job gains in Germany in the next few months.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">German Labor Market Indicators</th>
<th scope="col">Nov 2003</th>
<th scope="col">Oct 2003</th>
<th scope="col">Sept 2003</th>
<th scope="col">Aug 2003</th>
<th scope="col">Year Ago</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Unemployment Rate (%)</td>
<td>10.5</td>
<td>10.5</td>
<td>10.5</td>
<td>10.6</td>
<td>10.0</td>
<td>9.8</td>
<td>9.4</td>
<td>9.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Western Germany (%)</td>
<td>8.4</td>
<td>8.4</td>
<td>8.4</td>
<td>8.4</td>
<td>7.8</td>
<td>7.7</td>
<td>7.2</td>
<td>7.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Eastern Germany (%)</td>
<td>18.4</td>
<td>18.5</td>
<td>18.6</td>
<td>18.6</td>
<td>17.8</td>
<td>17.7</td>
<td>17.3</td>
<td>17.1</td>
</tr>
<tr>
<td class="firstcol">Number Unemployed (Change, thousands)</td>
<td>-18</td>
<td>-12</td>
<td>-11</td>
<td>+6</td>
<td>+14*</td>
<td>+22*</td>
<td>+14*</td>
<td>-18*</td>
</tr>
<tr class="odd">
<td class="firstcol">Employment (Change, thousands)</td>
<td>N.A.</td>
<td>N.A.</td>
<td>-29</td>
<td>-33r</td>
<td>-37*</td>
<td>-42*</td>
<td>-6*</td>
<td>45*</td>
</tr>
<tr>
<td class="firstcol">Germany: PMI Services Employment (50 = Expansion/Contraction)</td>
<td>46.7</td>
<td>43.8</td>
<td>43.7</td>
<td>43.2</td>
<td>40.3 (Jan&#39;03 low)</td>
<td>46.5</td>
<td>49.7</td>
<td>53.8</td>
</tr>
</tbody>
</table>
<table border="0" cellspacing="0" width="100%">

</table>
</body>
</html>

German unemployment fell again last month, a third successive decrease and the fifth in the last seven months. In a press report accompanying release of the November data, government officials attribute this improvement to several [...]

Unemployment Picture Improves in Germany

<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/031204a.jpg" width="353">
Initial claims for jobless insurance rose 11,000 last week to 365,000. Consensus expectations had been for claims of 350,000 and the prior week&#39;s level was revised up.
The four-week moving average of initial claims rose slightly to 362,500 (-6.8% y/y).
Continuing claims for unemployment insurance rose 44,000 but the 105,000 decline during the prior week was revised to a decline of 134,000.
The insured rate of unemployment rose slightly to 2.7% from a downwardly revised 2.6% during the week prior.
Research from the Federal Reserve Board titled &quot;How Should Unemployment Benefits Respond to the Business Cycle?&quot; can be found <a href="http://www.federalreserve.gov/pubs/feds/2003/200301/200301abs.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"> <a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM"> Unemployment Insurance (000s)</a></th>
<th scope="col">11/29</th>
<th scope="col">11/22</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>365.0</td>
<td>354.0</td>
<td>-5.2%</td>
<td>404.3</td>
<td>406.0</td>
<td>299.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,385</td>
<td>-2.8%</td>
<td>3,575</td>
<td>3,022</td>
<td>2,114</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for jobless insurance rose 11,000 last week to 365,000. Consensus expectations had been for claims of 350,000 and the prior week's level was revised up. The four-week moving average of initial claims rose slightly to [...]

Initial Jobless Insurance Claims Rose Slightly

<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/031203f.jpg" width="353">
&quot;The highest since . . . &quot; is a phrase that applies to the service sector PMI or its main components for nearly every European country in November. For instance, the Euro-Zone-wide index, at 57.5, is the highest since October 2000. This diffusion index for service industries is based on a survey of purchasing managers by NTC Research in Henley-on- Thames, England, for Reuters Group Plc. The data, which begin in July 1998, are contained in Haver&#39;s PMI database. Indexes for Germany, Italy, Ireland and Spain all rose several points in November, while the total Euro-Zone index and those for the UK and Russia edged ahead modestly. The French PMI eased a bit, but it had jumped more than 4 points in October, so it is still strong. The small rise in the UK index made it &quot;the highest since&quot; June 1997.
The most notable development in November is the climb in the employment component for the Euro-Zone to 50.4, &quot;the highest in&quot; 18 months, i.e. May 2002, and the first indication of net employment gains, however tiny, since July 2002. A 2.9-point improvement in Germany was the main contributor, although that individual country index reached only 46.7, still well below the expansion/- contraction breakeven at 50.
We note with some interest the fairly recent compilation of a Purchasing Manager Survey for Russia. NTC Research also conducts this survey, and the results are distributed by the Moscow Narodny Bank. Only two years old, this survey indicates a rapidly expanding service sector in Russia, with the latest gains concentrated in new business and outstanding business components.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Service Sector PMIs&nbsp;&nbsp; (50+ = Expansion)</th>
<th scope="col">Nov 2003</th>
<th scope="col">Oct 2003</th>
<th scope="col">&nbsp;Sept 2003</th>
<th scope="col">Nov 2002</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Euro-Zone</td>
<td>57.5</td>
<td>56.0</td>
<td>53.6</td>
<td>50.8</td>
<td>51.6</td>
<td>51.6</td>
<td>59.8</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>55.4</td>
<td>53.7</td>
<td>52.4</td>
<td>45.6</td>
<td>48.6</td>
<td>48.9</td>
<td>56.7</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>59.6</td>
<td>59.8</td>
<td>55.6</td>
<td>54.1</td>
<td>54.7</td>
<td>54.3</td>
<td>64.2</td>
</tr>
<tr>
<td class="firstcol">United Kingdom</td>
<td>59.6</td>
<td>59.1</td>
<td>58.7</td>
<td>54.9</td>
<td>54.4</td>
<td>51.4</td>
<td>57.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Russia</td>
<td>65.1</td>
<td>64.6</td>
<td>61.9</td>
<td>58.4</td>
<td>58.1</td>
<td>61.2*</td>
<td>N.A.</td>
</tr>
</tbody>
</table>
</body>
</html>

"The highest since . . . " is a phrase that applies to the service sector PMI or its main components for nearly every European country in November. For instance, the Euro-Zone-wide index, at 57.5, is the highest since October 2000. [...]

Euro-Zone Services Continue Broad Expansion Through Q4

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031203d.jpg" width="353">
The November Business Activity Index for the non-manufacturing sector fell last month to 60.1 from 64.7 in October, reported the Institute for Supply Management. Consensus expectations had been for little change at 64.5.
Since the series&#39; inception in 1997 there has been a 58% correlation between the level of the ISM non-manufacturing business activity index and the quarterly change in real GDP for services plus construction.
The employment index added to its strength of the prior month and rose 2.0 points to 54.9, the highest level since March 2000.
Since the series&#39; inception in 1997 there has been an 68% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing and construction industries.
The seasonally adjusted orders index erased virtually all of the October gain and fell to 60.1.
Business activity for the non-manufacturing sector is a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index weights the components.
The seasonally adjusted prices index fell slightly to 58.0.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing 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">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>60.1</td>
<td>64.7</td>
<td>55.7</td>
<td>55.1</td>
<td>49.0</td>
<td>59.3</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>58.0</td>
<td>58.7</td>
<td>57.5</td>
<td>53.9</td>
<td>51.6</td>
<td>63.5</td>
</tr>
</tbody>
</table>
U.S. Light Vehicle Sales Improved 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 3, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031203b.jpg" width="353">
Light vehicle sales improved 7.7% last month versus October to 16.84M. Consensus expectations had been for sales of 16.4M.
Car sales recovered 11.3% from a miserable October selling rate to 7.77M units. Sales of light trucks also rose 4.9% m/m to 9.07M.
Domestic light vehicle sales rose 7.3% m/m to a 13.50M unit selling rate (6.4% y/y).
Imported vehicle sales jumped 9.3% m/m to 3.34M (-0.3% y/y). Imports captured 19.8% of the US market for new vehicles in November.

<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"> Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>16.84</td>
<td>15.64</td>
<td>5.0%</td>
<td>16.81</td>
<td>17.26</td>
<td>17.40</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>7.77</td>
<td>6.98</td>
<td>-1.4%</td>
<td>8.07</td>
<td>8.48</td>
<td>8.83</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>9.07</td>
<td>8.66</td>
<td>11.2%</td>
<td>8.74</td>
<td>8.78</td>
<td>8.56</td>
</tr>
</tbody>
</table>
Strong U.S. Productivity Revised Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 3, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031203a.jpg" width="353">
Nonfarm labor productivity growth last quarter was revised up to 9.4% from 8.1% estimated last month. Consensus expectations had been for a revision to 3Q growth to 9.0%.
The upward revision stemmed from a revision to output growth, now shown at 10.3% (4.4% y/y) versus the 8.8% estimated initially. Hours of all persons (employment times hours) was pegged at 0.8% (-0.5% y/y), little revised. Since peaking in three years ago, hours worked have fallen 5.2%.
Strong growth in recent quarters pulled the five-year growth in productivity to 3.6%, the fastest since the mid-1960s. Combined with 1.2% growth in the labor force over that period it suggests the economy&#39;s potential rate of growth is near 5.0%.
Unit labor costs are now estimated at down 5.8% in 3Q, the sharpest decline since 2Q 1983. Growth in compensation per hour was little revised at 3.0%, about the growth rate during the last two years.
Manufacturing sector productivity growth was revised up to 9.0% (4.4% y/y) from 8.6%. Unit labor costs in the factory sector fell 4.5% and were unchanged y/y.
Productivity in the nonfinancial corporate sector (derived from the income side of the NIPA) grew 9.2% (6.2% y/y). Unit labor costs fell 4.7% (-4.7% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EC/@EC02/@EC02.HTM">Nonfarm Business Sector</a> (SAAR)</th>
<th scope="col"> 3Q &#39;03 (Revised)</th>
<th scope="col">3Q &#39;03 (Prelim.)</th>
<th scope="col">2Q &#39;03</th>
<th scope="col">Y/Y</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Output per Hour</td>
<td>9.4%</td>
<td>8.1%</td>
<td>7.0%</td>
<td>5.0%</td>
<td>5.4%</td>
<td>1.9%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Compensation</td>
<td>3.0%</td>
<td>3.1%</td>
<td>3.6%</td>
<td>2.7%</td>
<td>2.8%</td>
<td>3.6%</td>
<td>7.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>-5.8%</td>
<td>-4.6%</td>
<td>-3.2%</td>
<td>-2.2%</td>
<td>-2.4%</td>
<td>1.7%</td>
<td>3.9%</td>
</tr>
</tbody>
</table>
Mortgage Applications Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 3, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031203c.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association fell 11.7% last week (-27.0% y/y) following two weeks of strong gain.
Purchase applications fell a moderate 3.9% (+14.3% y/y) from a near record height. Applications to refinance fell another 1.9% (-66.9% y/y).
During the last ten years there has been a 54% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
The effective interest rate on a conventional 30-Year mortgage rose sharply w/w to 6.22%. The effective rate on a 15-year mortgage also rose to 5.60%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org"> here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM"> MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">11/28</th>
<th scope="col">11/21</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>685.1</td>
<td>775.6</td>
<td>799.7</td>
<td>625.6</td>
<td>322.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>441.8</td>
<td>459.9</td>
<td>354.7</td>
<td>304.9</td>
<td>302.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,100.0</td>
<td>2,612.2</td>
<td>3,388.0</td>
<td>2,491.0</td>
<td>438.8</td>
</tr>
</tbody>
</table>


</html>

The November Business Activity Index for the non-manufacturing sector fell last month to 60.1 from 64.7 in October, reported the Institute for Supply Management. Consensus expectations had been for little change at 64.5. Since the [...]

ISM Non-manufacturing Index Down

Blue Chip forecasters expect US to lead aggressive policy rate cuts over coming year—apart from Japan

Ratio of job openings to the number unemployed in the US now below pre-pandemic level

U.S. layoffs not showing as much cooling in labor markets as unemployment rate

While goods prices have moderated, service price inflation remains elevated and sticky

Since Jan 2023, BCEI US outlook has improved, worsened for Japan and the euro area

Persistent negative US economic surprises leading to big rate-cut expectations

Germany is Euro area weakling

Flash PMIs show good start to Q3 in US; loss of momentum in the euro area

Chinese economy on downtrend could threaten global economy

Working age population labor force participation near all-time high as retirements increase

Blue Chip forecasters look for widespread policy rate cuts just ahead

Flash June PMIs point to a widespread slowdown apart from the US

Announcement of snap French election is causing concern across Europe

The UK economy’s post-pandemic under-performance relative to its pre-pandemic trend

US Beveridge Curve back to near pre-pandemic levels

Negative economic surprises in the US but positive in Europe, especially the UK

Latest PMIs show US losing momentum while RoW is gaining momentum

Sticky services prices behind sticky overall PCE inflation

Flash April PMIs point to slower growth in the US but a pickup in Europe and Japan

Outlook strengthens for US while it weakens for other major economies

Crude petroleum prices are having a big impact on inflation expectations

Inflation surprising to upside in the US; by contrast to the downside in the euro area

 Gross Domestic Income is catching up with GDP

FOMC expects GDP growth above trend over the next three years

US core CPI inflation has begun to reaccelerate

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

240910T5.jpg

240910U5.jpg

The NFIB Small Business Optimism Index declined to 91.2 during August after rising to 93.7 in July, according to the Small Business Economic Trends survey conducted by the National Federation of Independent Business. The index held steady y/y but has improved from a March low of 88.5. Eight of the 10 index components declined last month. The NFIB Small Business Uncertainty Index increased to 92 in August. It remained higher than its recent low of 65 in November 2023.

The outlook for business conditions in the next six months deteriorated in the latest survey. The net balance of respondents expecting the economy to improve fell to -13% in August from -7% in July but remained higher than a record-low of -61% in June 2022. Expected real sales fell to a net -18% in August, a five-month low. The latest reading as increased from a low of -29% in July 2022. A steady net -16% of respondents reported higher nominal sales in the past three months, down from the most recent positive reading of 1% in May 2022.

Plans to make capital outlays increased to 24% in August following three straight months at 23%. This reading was up from its recent low of 20% in March but remained below a high of 31% in October 2021. Plans to expand business fell to 4% in August after rising to 5% in July and holding at 4% for the prior four consecutive months. Expected credit conditions deteriorated to -8% in August, after three consecutive months at -7, and remained below its high six months ago.

On the labor front, 56% of respondents reported few or no qualified workers to fill job openings in August, up from 49% in July and the highest percentage since September of last year. These readings were below a high of 61% in May 2022. A net 13% planned to increase employment in August, below the most recent high of 18% in November of last year and a peak of 32% in August 2021.

Overall earnings trends deteriorated sharply last month to the weakest reading since March 2020, falling to -37% in August from -30% in July.

On the pricing front, the net percent raising their average selling prices declined to 20% in August, down from 22% in July and below a high of 66% in March of 2022. The percentage planning to raise prices edged higher to 25% in August from 24% in July but remained well below a high of 52% in March 2022.

Wage inflation held steady as a net 33% of respondents raised compensation during the last three months, the same as in July but below 38% reported in the June survey. Compensation peaked at 50% in January 2022. A net 20% of firms planned to raise worker compensation in the next three months, up from 18% in July but below a high of 32% in October 2022.

Inflation continued to be the single most important issue facing small businesses, as reported by 24% of NFIB members in August. The quality of labor was the second most important concern as reported by 21% of members. Other major concerns were taxes, 13%, the cost of labor, 9%, and government requirements, 8%.

According to the Small Business Administration, there are 33 million small businesses in the United States, which employ 62 million workers. The NFIB surveys anywhere from 500 to 2000 respondents each month and the typical firm employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver’s **SURVEYS** database.

240910V5.jpg

240910W5.jpg

- Expectations for economy & sales decline.
- Employment plans weaken but job openings surge.
- Prices ease but expectations edge higher.

U.S. NFIB Small Business Optimism Index Backpedals in August

240910C2.jpg

240910D2.jpg

Retail gasoline prices for all grades weakened to $3.36 per gallon (-14.7% y/y) in the week ended September 9 from $3.41 per gallon in the previous week. Prices were below the late-April high of $3.79 per gallon and at the lowest level since the second week of February. They also were below the all-time high of $5.11 in the week ended June 13, 2022. Prices are increased, however, versus the low of $3.18 per gallon in the third week of December. Retail prices for on-highway diesel fuel declined to $3.56 per gallon (-21.7% y/y) last week compared to $3.63 in the prior week. These prices reached a high of $4.63 per gallon in the third week of September of last year.

The average price of West Texas Intermediate crude oil weakened to $69.33 per barrel (-20.5% y/y) in the week ended September 6 from $75.97 per barrel in the prior week. Prices roughly equaled the lowest level since the last week of June 2023 and were lower than the $91.45 high in the last week of September 2023. They peaked at $142.46 per barrel in the week of July 4, 2008. Yesterday, the price of West Texas Intermediate crude oil was $68.71 per barrel. The price of European Brent crude oil fell to $75.25 per barrel (-17.6% y/y) in the week ended September 6 compared to $80.83 in the prior week. The price of Brent has recently ranged from a low of $73.55 in the week ended June 30, 2023 to a high of $127.40 in the week ended June 10, 2022. Yesterday, the price was $72.37 per barrel.

Natural gas prices averaged $2.04/mmbtu (-19.0% y/y) in the week ended September 6 compared to $1.90 in the prior week. Prices recently touched a high of $2.73/mmbtu in the second week of June and they remained above their low of $1.40/mmbtu in the second week of March. Prices reached a high of $9.56/mmbtu averaged in the last week of August 2022. Yesterday, the price of natural gas was $2.03/mmbtu.

Gasoline demand increased 0.9% y/y in the four weeks ended August 30 after improving 1.1% y/y in the four weeks ended August 23. Demand for all petroleum products weakened 1.6% y/y in the last four weeks after falling 2.9% y/y in the previous period. Crude oil input to refineries rose 0.3% y/y in the four weeks ended August 30 after a 0.4% y/y decline during the previous four-week period.

Gasoline inventories rose 2.1% y/y in the week of August 30 after rising 0.5% y/y in the prior week. Inventories of residual fuel oil fell 2.3% y/y after declining 1.9% y/y in the previous week. Crude oil inventories, including the Strategic Petroleum Reserve, rose 4.0% y/y in the week of August 30, the same as during the prior week.

Measured in days’ supply, gasoline inventories were 24.0 days in the week ended August 30 following 23.9 days one week earlier. The recent low was 23.4 days in the week of June 30, 2023. Crude oil inventories fell to 25.0 days in the week of August 30. These compare to a recent high of 31.9 days in the week of March 3, 2023 and a low of 25.0 days in the week of September 1, 2023.

These data are reported by the Energy Information Administration of the U. S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** and **USENERGY** databases.

- Gasoline prices fall to seven-month low.
- Crude oil prices decline sharply.
- Natural gas prices rise slightly.

U.S. Gasoline & Crude Oil Prices Decline in Latest Week

Robert Brusca

240910E.jpg

Inflation of the European Monetary Union in August rose by 0.2% compared with 0.3% gain in July and a 0.2% rise in June. The three-month inflation rate at 2.5%, however, is part of a slow progression higher that compares to a 2.2% annual rate over six months and a 2.1% annual rate over 12 months, a moderate but clear accelerating pattern.

**Country level trends**
The four largest countries in the monetary union also are exhibiting patterns that suggest or that outright demonstrate, inflation acceleration at least based on headline measures. Germany is the largest monetary union economy and is a slight exception with a 2.2% inflation rate over three months, down from 2.5% over six months but up from 2.1% over 12 months. France demonstrates inflation rising from 2.2% over 12 months to a pace of 2.4% over six months to a strong 3.6% over three months. In Italy, inflation transitions from a low 1.3% over 12 months to a 3% pace over six months, to another strong pace of 3.7% over three months. Spain is the true exception with inflation well behaved across most of the cohorts at 2.3% over 12 months, an elevated pace but not by much, especially when compared to a 0.7% pace over six months that only ticks up to a 0.8% annual rate over three months.

**Monthly results by country**
The inflation process among these four large countries is still somewhat mercurial as August showed declines in inflation in Germany and Italy on a month-to-month basis while Spain's inflation was flat. On the face of it, this is good news; however, July brought an increase in prices of 0.8% month-to-month in Italy, 0.5% in Germany, 0.4% in France with a moderate 0.2% gain in Spain. So whatever the three-month pace is, it's the product of some fairly erratic monthly numbers and therefore not yet something that we can consider to be very reliable.

**Core inflation**
Core inflation is a different story. Here we get core or at least an ex-energy reading from Germany, Italy, and Spain. The August readings are contained with German ex-energy inflation up by 0.2%, Italian core inflation up by 0.1% and Spain’s core inflation up by 0.3%. These are decelerations from stronger gains in July across the board. And two of these three countries also had larger increases in June than they had in August. Looking at the progression of core inflation for Germany, the 12-month ex-energy rate is 2.5%, the six-month pace is 2.6%, and the three-month pace is 2.4%; all pretty steady stuff. Italy shows core inflation at 2.4% over six months and 12 months that moves up to 3.1% over three months. Spain shows core inflation at 2.7% over 12 months, up to 2.8% over six months and up to 4.3% over three months.

The performance of Brent oil prices explains the headline/core difference as oil prices fell over these progressively longer periods; over shorter periods oil prices have fallen faster tending to push headline inflation down faster over these short horizons contributing to the illusion of inflation deceleration. Even so, deceleration is not a pattern that is detectable in headline inflation for these countries.

The bottoms line here is that core inflation is still stuck and too high and that is too much evidence of inflation accelerating even in the face of easing oil prices for monetary policy to seek further accommodation.

240910.jpg

As we peruse the inflation trends, we find they are accompanied by output trends that are erratic even more than they are weak. Median output among the early reporting EMU members in July shows a gain of 1.0% compared to a gain of 0.4% in June. These contrast to a 0.5% drop in May. Median output among this group falls by 3.7% annualized over three months, rises by 1.5% annualized over six months, and falls by 0.9% over 12 months. And output is falling on the median measure in the quarter-to-date (early in Q3). Still, we also see output trends accelerate more than they decelerate across countries in June and July with a proportion of about 60% accelerating to 40% not accelerating.  Over three months, that full period shows acceleration in only about one third of reporters; output accelerates in half the reporters over six months and for two-thirds of them over 12 months.

240910 2.jpg

**Mixed, as well as, mixed-up trends**
On balance, the performance of inflation and industrial output in the EMU is mixed. Over three months the output trend is especially hard to pin down with declines of 26.5%, 18.3% and 17% annualized for some reporters juxtaposed to increases of 23.7% annualized, 18.4% annualized and 11.1% annualized- and, of course, more. In such a mixed constellation of growth rates, it is hard to discern trend. However, Portugal, the Netherlands, France and Germany, each reporter shows declines in each of the broader sequential periods- they also show deterioration is worsening. Belgium, Finland and Ireland, a decidedly smaller class of economy, all show persistent IP expansion and acceleration. The quarter-to-date shows declines outnumber increases across EMU members by two-to-one. Still, a lot of these trends are rooted in sharp declines logged in July. The gyrating three-month growth rates also are important contributors to growth results over six months and 12 months. When three-month growth rates are turbulent, they tend to impart their turbulence across the timeline.

For now there is more weakening in this report that I would like to see, but it also is still a mixed report. PMI data remind us that while manufacturing has been weak there has been countervailing strength in services to support growth. The failure of inflation data to clearly fall into line and weaken also is suggestive of a more mixed real sector economic performance. With such data trends in progress, central banks are likely to continue to play the waiting game.

Europe

Core Inflation in Key EMU Members: Mostly Above Target and Not Falling

240909R5.jpg

240909S5.jpg

Consumer credit outstanding strengthened $25.5 billion (1.9% y/y) in July after rising $5.2 billion in June, revised from $8.9 billion, and increasing $11.7 billion in May, revised from $13.9 billion. It was the largest runup in loan balances since November 2022. A $10.2 billion increase had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income stood basically unchanged at 24.3% in July, a ratio that has drifted lover the last two years.

Revolving credit outstanding, which includes credit cards, rose $10.6 billion in July (6.6% y/y) following a $0.4 billion decline in June and an $8.5 billion May rise. Revolving credit outstanding held by depository institutions rose 7.2% y/y, down from a high of 17.0% y/y growth in August 2022. Revolving credit held by finance companies fell 8.3% y/y while revolving credit held by credit unions rose 6.3% y/y in July, below the 16.4% y/y peak in February 2022.

Nonrevolving credit outstanding increased $14.8 billion (0.3% y/y) in July after increasing $5.6 billion in June and rising $3.2 billion in May. Nonrevolving credit held by banks fell a lessened 1.8% y/y while finance company credit rose 3.8% y/y. Credit union nonrevolving balances was fairly steady y/y, off from 20.3% y/y growth in January 2023. Federal government balances rose 0.2% y/y to $1.49 trillion.

The value of student loans outstanding totaled $1.75 trillion at the end of June, down 0.9% y/y, and there was $1.56 trillion in motor vehicle loans at the end of June, up 1.8% from a year earlier.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

240909T5.jpg

240909U5.jpg

- Revolving credit outstanding rebounds.
- Nonrevolving credit gain almost triples.

U.S. Consumer Credit Usage Surges in July

240909L1.jpg

240909M1.jpg

Wholesale trade inventories increased 0.2% (0.4% y/y) during July after holding steady in June, revised from 0.2%, and an unrevised 0.5% May gain. The increase compared to a 0.3% rise expected in the Informa Global Markets Survey and compared to a 0.3% gain in the advance report issued two weeks ago.

Durable goods inventories edged 0.1% higher last month (2.6% y/y) following a 0.2% decline. Machinery inventories, the largest sector, fell 0.3% (+12.0% y/y) while motor vehicles & parts, the second largest grouping, edged 0.1% higher (11.8% y/y). Electrical equipment inventories rose 0.5% (-4.0% y/y). Inventories of nondurable goods increased 0.5% (-3.2% y/y) following a 0.4% rise. Drug inventories, which make up a quarter of nondurable inventories, rose 2.5% (4.4% y/y). Grocery inventories, the second largest category, eased 0.6% (-2.3% y/y). Petroleum inventories dropped 1.7% (-9.1% y/y). Apparel inventories edged 0.1% higher (-15.1% y/y) and chemical inventories weakened 0.5% (-8.8% y/y).

Sales at the wholesale level strengthened 1.1% (2.9% y/y) in July after a 0.3% June decline, revised from -0.6%. A 0.2% July rise had been expected in the Action Economics Forecast Survey.

Durable goods sales increased 0.5% in July (3.2% y/y) after a 0.6% increase. Sales of electrical equipment, the largest sector, rose 0.2% (9.7% y/y), the same as in June. Professional and commercial equipment sales, which includes computers, jumped 1.2% (6.0% y/y), while vehicle sales rose 0.4% (5.4% y/y). Nondurable product sales improved 1.6% (2.6% y/y) after declining 1.6% in June. Petroleum product sales, the largest category, rose 3.9% (1.3% y/y). Drug store sales jumped 1.5% (9.3% y/y) while grocery store sales gained 0.3% (2.8% y/y). Sales of apparel jumped 2.5% (3.7% y/y) while chemical sales declined 0.9% (-2.9% y/y). Paper sales rose 0.9% (-2.1% y/y).

The inventory-to-sales (I/S) ratio at the wholesale level eased to 1.35 in July from 1.36 in June and has been moving sideways for the last year.

The I/S ratio for durable goods was minimally changed at 1.80. The machinery ratio declined to 3.09 while motor vehicles rose to 1.89. The I/S ratio for nondurable goods eased to 0.94, down from 1.01 early last year. The petroleum industry I/S ratio slipped to 0.32, and the drug industry moved up to 1.02. Apparel's I/S ratio of 2.19 stood below its 2.67 level one year earlier.

The wholesale trade figures are available in Haver's **USECON** database. The expectations figure for inventories is contained in the **MMSAMER** database. Expectations for sales are from the **AS1REPNA** database.

240909N1.jpg

240909O1.jpg

- Inventory gain extends trend of moderate accumulation.
- Jump in sales concentrates in nondurables.
- Inventory-to-sales ratio continues sideways movement.

Economy in Brief: 2003

Jump to: