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/031020b.jpg" width="353">
The Conference Board reported that the Composite Index of Leading Economic Indicators fell 0.2% in September following four months of increase. The decline was slightly weaker than Consensus expectations for no change. The 0.4% increase in August was unrevised.
Gains amongst the leaders&#39; component series fell to 40%. The diffusion of the prior month&#39;s gain was revised up to 50% from 45%. The percentage of leading components rising over a six month period rose to 85% but the prior month&#39;s figure was revised to a still-high 70%.
Higher weekly hours and higher stock prices were the only two component series showing meaningful gain. Influences from the other leading series were modest except the money supply which subtracted 0.17%, the first decline since March.
The Leading index is based on eight previously reported economic data series and two that are estimated.
The coincident indicators rose 0.1%. Year to date the coincident indicators are up 0.6% (AR).
The ratio of coincident-to-lagging indicators surged as the lagging index fell due to lower C&amp;I loans and a weak CPI. The ratio is an indicator of excess relative to actual economic performance.
Visit the Conference Board&#39;s <a href="http://www.conference-board.org">site</a> for coverage of leading indicator series from around the world.

<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/BCI/BCI.HTM"> Business Cycle Indicators</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</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">Leading</td>
<td>-0.2%</td>
<td>0.4%</td>
<td>2.4%</td>
<td>2.1%</td>
<td>-0.9%</td>
<td>1.0%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.4%</td>
<td>-0.2%</td>
<td>-0.4%</td>
<td>3.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>-0.5%</td>
<td>0.0%</td>
<td>-2.6%</td>
<td>-4.4%</td>
<td>-1.3%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Conference Board reported that the Composite Index of Leading Economic Indicators fell 0.2% in September following four months of increase. The decline was slightly weaker than Consensus expectations for no change. The 0.4% [...]

Leading Indicators Fell

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/031017a.jpg" width="353">
Housing starts rebounded in September by 3.4%, almost exactly offsetting their August decline. At a 1.888 million annual rate, they stood just 2,000 off the 17-year high of 1.890 million reached in July. Forecasters underestimated this strength, anticipating that starts would remain close to the relatively lower July figure. Revisions to July and August figures were inconsequential.
Single family starts rose 3.1% m/m. The Midwest and West showed the largest increases and those in the South actually declined somewhat. 
Multi-family starts advanced 4.5%, last month, led by starts of 2-4 unit structures, i.e., townhouses. For all multi-unit structures, starts were up most in the Northeast, with small increases in the Midwest and South and some decline in the West.
Building permits have had the reverse monthly pattern from starts, as they rose an upwardly revised 5.6% in August and edged back down 2.2% in September. The backlog of homes authorized but not started was nearly steady at 178,100 in September (actual monthly amount, not seasonally adjusted or annualized) compared with 179,000 in August. This backlog is down slightly from its peaks in the spring, providing a slight hint that the housing market might be on the verge of slowing down. However, historically housing demand has sometimes firmed briefly after interest rates have begun to rise as home builders and buyers rush to capture low mortgage rate financing. So such a high volume of starts as occurred in September would not be a surprising response to the rise in rates over the summer.

<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/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">July</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>1,888</td>
<td>1,826</td>
<td>1,890</td>
<td>4.3%</td>
<td>1,711</td>
<td>1,601</td>
<td>1,573</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-family</td>
<td>1,520</td>
<td>1,474</td>
<td>1,533</td>
<td>4.9%</td>
<td>1,364</td>
<td>1,272</td>
<td>1,232</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-family</td>
<td>368</td>
<td>352</td>
<td>357</td>
<td>1.9%</td>
<td>347</td>
<td>330</td>
<td>341</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>1,860</td>
<td>1,901</td>
<td>1,800</td>
<td>3.2%</td>
<td>1,750</td>
<td>1,637</td>
<td>1,598</td>
</tr>
</tbody>
</table>
Housing Market Index Rose to Four Year High 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 17, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031017c.jpg" width="353">
The National Association of Home Builders (NAHB) reported that their Composite Housing Market Index rose for October to 72 (+14.3% y/y). That is the highest level since December 1999 and the monthly gain retraced all of a moderate September decline.
During the last fifteen years there has been a 68% correlation between the y/y change in the NAHB index and the change in new home sales.
The index of current market conditions for home sales jumped 8.2% m/m to 79 (14.5% y/y).
The index which measures expected home sales in six months rose 5.1% m/m to 82 (20.6 y/y).
Traffic of prospective buyers picked up and reversed half of a moderate decline in September.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
Visit the National Association of Home Builders using this <a href="http://www.nahb.org">link</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/SURVEYS/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</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>
<td class="firstcol">Composite Housing Market Index</td>
<td>72</td>
<td>68</td>
<td>63</td>
<td>61</td>
<td>56</td>
<td>62</td>
</tr>
</tbody>
</table>
U.S. Consumer Sentiment Recovers Somewhat 
by <a href="/comment/Stone.html">Carol Stone</a> October 17, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031017b.jpg" width="353">
The University of Michigan&#146;s consumer sentiment index picked up in early October, rising to 89.4 (1966Q1 = 100) from September&#39;s final 87.7. This early October move basically reversed the decline in September.
An improvement in Current Economic Conditions provided the primary support. This may have resulted from the better employment conditions reported for September or the better trend in the stock market or both. As seen in the accompanying graph, there is a fairly well defined relationship between the overall sentiment index and the movement in stock prices, about an 88% correlation over the past five years. Carrying the connection to the next link in the chain, sentiment further has maintained an 82% correlation with the year-on-year growth in real consumer spending over that same time span.
The Index of Consumer Expectations also rose, but much more modestly.
The University of Michigan survey is not seasonally adjusted.It is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<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/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">Early Oct</th>
<th scope="col">Sept</th>
<th scope="col">Aug</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">Consumer Sentiment</td>
<td>89.4</td>
<td>87.7</td>
<td>89.3</td>
<td>10.9%</td>
<td>89.6</td>
<td>89.2</td>
<td>107.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>102.2</td>
<td>98.4</td>
<td>99.7</td>
<td>10.6%</td>
<td>97.5</td>
<td>100.1</td>
<td>115.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Index of Consumer Expectations</td>
<td>81.2</td>
<td>80.8</td>
<td>82.5</td>
<td>11.1%</td>
<td>84.6</td>
<td>82.3</td>
<td>102.7</td>
</tr>
</tbody>
</table>
</body>
</html>

Housing starts rebounded in September by 3.4%, almost exactly offsetting their August decline. At a 1.888 million annual rate, they stood just 2,000 off the 17-year high of 1.890 million reached in July. Forecasters underestimated [...]

Housing Starts Rebound in September

<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/031016e.jpg" width="353">
The US Treasury today published its array of monthly data on foreign investors&#39; purchases and sales of &quot;long-term&quot; US securities (having maturity greater than one year) for August. Known as the &quot;TIC&quot; data for Treasury International Capital&quot;, this extensive collection of information on foreign participation in US capital markets is contained in Haver&#39;s USINT database in the section &quot;US International Investment Tables&quot;, shown by security type and country. In August, net foreign purchases of securities traded in US markets totaled $53 billion, down from July&#39;s $73.4 billion, but well above the $42.2 billion of August 2002.
Indeed, as seen in the graph, the volume of foreign purchases in US markets has climbed fairly persistently over the last 10 years, so that the monthly amounts in 2003 are largely without precedent. The graph also shows that this pattern is somewhat a mirror image of the US current account deficit, which has climbed fairly persistently over the last 10 years. Obviously, these security purchases do not account for all of the financing, but they have grown along with that deficit.
At the same time, these financial transactions are quite varied in both magnitude and mix even from month to month. As the table below shows, the reduction in total net purchases from July to August was largest in Treasury securities, no doubt part of the bond market sell-off that occurred during the summer. By contrast, the recovery in the stock market is apparent in the huge turnaround in foreign purchases of US stocks, from a net liquidation in July to the largest net increase since late 2001. Thus, market forces are interrelated with these capital flows and may be just as important a determinant of their size and direction as the economic reverberations from the current account.

<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">Net Foreign Purchases of Securities in US Markets (bil $)</th>
<th scope="col"> Aug 2003 </th>
<th scope="col">July 2003 </th>
<th scope="col">June 2003 </th>
<th scope="col">Aug 2002</th>
Monthly Average
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">2002</td>
<td>2001</td>
<td>2000</td>
</tr>
</tbody>
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Total</th>
<th scope="col"><center></center></th>
<th scope="col">53.0</th>
<th scope="col">73.3</th>
<th scope="col">90.7</th>
<th scope="col">42.2</th>
<th scope="col">47.9</th>
<th scope="col">41.8</th>
<th scope="col">36.7</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Treasuries</td>
<td><center></center></td>
<td>25.2</td>
<td>44.7</td>
<td>44.0</td>
<td>4.3</td>
<td>10.0</td>
<td>1.5</td>
<td>-4.5</td>
</tr>
<tr>
<td class="firstcol">Federal Agencies (mostly &quot;GSEs&quot;)</td>
<td><center></center></td>
<td>9.8</td>
<td>11.8</td>
<td>7.0</td>
<td>17.4</td>
<td>16.3</td>
<td>13.7</td>
<td>12.7</td>
</tr>
<tr class="odd">
<td class="firstcol">US Corporate Bonds</td>
<td><center></center></td>
<td>18.7</td>
<td>26.4</td>
<td>22.8</td>
<td>14.5</td>
<td>15.2</td>
<td>18.5</td>
<td>15.3</td>
</tr>
<tr>
<td class="firstcol">US Corporate Stocks</td>
<td>11.6</td>
<td>-7.9</td>
<td>10.3</td>
<td>4.6</td>
<td>4.2</td>
<td>9.7</td>
<td>14.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign Bonds</td>
<td>1.0</td>
<td>3.0</td>
<td>11.7</td>
<td>-1.7</td>
<td>2.4</td>
<td>2.5</td>
<td>-0.3</td>
</tr>
<tr>
<td class="firstcol">Foreign Stocks</td>
<td>-13.4</td>
<td>-4.7</td>
<td>-5.2</td>
<td>3.1</td>
<td>-0.1</td>
<td>-4.2</td>
<td>-1.1</td>
</tr>
</tbody>
</table>
</body>
</html>

The US Treasury today published its array of monthly data on foreign investors' purchases and sales of "long-term" US securities (having maturity greater than one year) for August. Known as the "TIC" data for Treasury International [...]

Foreign Purchases of U.S. Securities Smaller in August, but Still Large by Historical Standards

<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/031016a.jpg" width="353">
The Consumer Price Index (CPI-U) rose 0.3% (2.3% y/y) in September. Consensus expectations were for a 0.2% gain.
Less food &amp; energy prices were tame, up 0.1% for the second month versus Consensus expectations for a 0.1% rise. The detail showed some incremental weakening in pricing power last month.
Tobacco prices fell 0.7% (-3.5% y/y). The CPI less food, energy &amp; tobacco rose 0.1% (1.3% y/y).
Prices of core consumer goods fell 0.4%, the most for any month since May. This price measure has been deflating since early 2001 and is down 3.7% since the peak. Prices for new vehicles fell 0.4% (-1.6% y/y) and prices for household furnishings &amp; operation also fell 0.4% (-2.3% y/y). Apparel prices rose 0.5% (-2.0%), all due to a rise in menswear prices.
Core services prices rose a modest 0.2% for the second month. Shelter prices ticked 0.1% (2.2% y/y) higher though medical care services prices rose 0.5% (4.4% y/y).Public transportation prices fell for the second month (2.2 y/y).Education &amp; communication prices rose just 0.1% (1.3% y/y) following 0.5% jumps in August and July.
Energy prices surged another 3.0% on the strength of a 6.3% (21.0% y/y) rise in gasoline prices. All of that gain in gasoline prices has been given back with a 6.4% decline so far this month. Fuel oil prices fell 1.9% (+13.3% y/y). Piped gas &amp; electricity prices ticked up 0.3% (9.5% y/y) following two months of decline.
The chained CPI which adjusts for shifts in consumer buying behavior rose 0.3% m/m for the second month. It is similar to the PCE price deflator. The core price measure rose 0.1%.
Analysis from the Federal Reserve Bank of San Francisco titled &quot;Improving the Way We Measure Consumer Prices&quot; can be found <a href="http://www.frbsf.org/publications/economics/letter/2003/el2003-24.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/USECON/@E8/@E801/@E80101/@E80101.HTM"> Consumer Price Index</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</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&nbsp;</td>
<td>0.3%</td>
<td>0.3%</td>
<td>2.3%</td>
<td>1.6%</td>
<td>2.8%</td>
<td>3.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.1%</td>
<td>0.1%</td>
<td>1.2%</td>
<td>2.3%</td>
<td>2.7%</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.4%</td>
<td>-0.1%</td>
<td>-2.4%</td>
<td>-1.1%</td>
<td>0.3%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.7%</td>
<td>3.8%</td>
<td>3.7%</td>
<td>3.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>3.0%</td>
<td>2.7%</td>
<td>14.9%</td>
<td>-5.8%</td>
<td>3.7%</td>
<td>16.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food &amp; Beverages</td>
<td>0.2%</td>
<td>0.3%</td>
<td>2.5%</td>
<td>1.8%</td>
<td>3.1%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM"> Chained CPI: Total (NSA)</a></td>
<td>0.3%</td>
<td>0.3%</td>
<td>1.8%</td>
<td>1.3%</td>
<td>2.3%</td>
<td>2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.7%</td>
<td>1.8%</td>
<td>&nbsp;2.0%</td>
<td>1.4%</td>
</tr>
</tbody>
</table>
U.S. Industrial Production Rose As Expected 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031016c.jpg" width="353">
Industrial production rose 0.4% last month, as expected by the Consensus of economists. The previously reported 0.1% gain in August was revised to no change.
Output in the manufacturing sector surged 0.7% (-0.6% y/y), however the previously reported 0.2% decline in August was revised to -0.4%.
Output in selected high-technology industries surged another 1.4% (15.1% y/y). Output of computers and peripheral equipment jumped 2.0% (22.8% y/y) and output of semiconductors &amp; related equipment surged 3.1% (24.5% y/y). Output of communications equipment fell 1.7% (-3.6% y/y).
Excluding high-tech, factory output jumped 0.7% (-1.6% y/y) on the strength of a 6.6% pop in output of motor vehicles &amp; parts (5.0% y/y). Output of electrical equipment and appliances fell 0.5% (-2.8% Y/Y) and the previously reported 0.2% rise in August was revised to a 1.0% decline. Output of furniture fell 0.3% (-5.1% y/y) and output of non-durable goods ticked up 0.1% (-2.7% y/y).
Total capacity utilization rose slightly to 74.7% and capacity growth remained slow at 1.1% y/y.

<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/@EA/@EA.HTM"> Production &amp; Capacity</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</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">Industrial Production</td>
<td>0.4%</td>
<td>0.0%</td>
<td>-0.5%</td>
<td>-0.8%</td>
<td>-3.5%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>74.7%</td>
<td>74.5%</td>
<td>76.0%(9/02)</td>
<td>75.6%</td>
<td>77.3%</td>
<td>82.7%</td>
</tr>
</tbody>
</table>
Jobless Insurance Claims Fell Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031016b.jpg" width="353">
Initial claims for jobless insurance fell 4,000 to 384,000 last week. The prior week&#39;s decline was lessened slightly. Consensus expectations had been for claims of 385,000. Figures released next week will cover the October survey period for nonfarm payrolls.
The four-week moving average of initial claims fell to 390,750 (-5.4% y/y), the lowest level since early February.
Continuing claims for unemployment insurance rose 58,000 to 3,674,000 but the prior week&#39;s decline was deepened to 30,000.
The insured rate of unemployment held steady at 2.9%. The rate has averaged 2.9% since April.

<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">10/11/03</th>
<th scope="col">10/04/03</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">Initial Claims</td>
<td>384.0</td>
<td>388.0</td>
<td>-7.0%</td>
<td>404.3</td>
<td>406.0</td>
<td>299.7</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,674</td>
<td>0.0%</td>
<td>3,575</td>
<td>3,022</td>
<td>2,114</td>
</tr>
</tbody>
</table>
U.S. Business Inventories Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031016d.jpg" width="353">
Total business inventories fell quite a bit more than expected (-0.4%) in August due to a huge decline in motor vehicles. Consensus expectations were for a 0.1% drop.
Retail inventories plummeted 0.8% as inventories of motor vehicles and parts dropped 2.0% (11.2% y/y). That was achieved by a 1.9% cut in vehicle output as reported by the Federal Reserve.
Non-auto inventories fell 0.1%, led lower by a 0.8% (1.3% y/y) decline in inventories at general merchandise stores. Inventories of furniture (5.4% y/y) and building materials (7.8% y/y) continued strong.
Overall business sales fell 0.2% m/m (3.4% y/y) due to a 1.8% decline (+1.6% y/y) in factory shipments.
The inventory-to-sales ratio was stable at the record low level of 1.36. 

<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/@ED06/@ED0601/@ED0601.HTM"> Business Inventories</a></th>
<th scope="col">Aug</th>
<th scope="col">July</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>-0.4%</td>
<td>-0.2%</td>
<td>1.9%</td>
<td>2.1%</td>
<td>-4.7%</td>
<td>5.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>-0.8%</td>
<td>-0.1%</td>
<td>5.3%</td>
<td>7.6%</td>
<td>-2.9%</td>
<td>6.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>-0.1%</td>
<td>0.2%</td>
<td>2.5%</td>
<td>2.5%</td>
<td>-1.2%</td>
<td>3.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>0.7%</td>
<td>0.4%</td>
<td>-4.9%</td>
<td>6.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-0.2%</td>
<td>-0.4%</td>
<td>-0.7%</td>
<td>-1.8%</td>
<td>-6.1%</td>
<td>3.8%</td>
</tr>
</tbody>
</table>
Philadelphia Fed Index Up Big 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 16, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031016f.jpg" width="353">
The Philadelphia Fed&#146;s index of general business conditions rose strongly in October to 28.0 versus 14.6 in September. Consensus expectations were for a reading of 16.0.
During the last twenty years there has been a 65% correlation between the level of the Philadelphia Fed Business Conditions Index and quarterly growth in real GDP. The correlation with quarterly growth in factory sector industrial production has been 77%.
The business conditions index was at its highest level since July 1996, the improvement directionally consistent with yesterday&#39;s Empire State Manufacturing Survey.
Amongst the sub indexes, new orders jumped nearly 10 points m/m to its highest since 1996. Shipments (28.8) also leaped higher and the employment index (5.5) rose to its highest in over three years.
The business conditions index reflects a separate survey question, not the sub indexes.
A separate survey of expected business conditions in six months backpedaled to 55.5, reversing the improvement in 3Q.
The prices paid index was about stable at 22.3.
The Philadelphia Fed index is based on a survey of 250 regional manufacturing firms, but these firms sell nationally and internationally.
The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found <a href="http://www.phil.frb.org/files/bos/bos1003.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/SURVEYS/@S5/@S504/@S504.HTM"> Philadelphia Fed Business Outlook</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Oct &#39;02</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>28.0</td>
<td>14.6</td>
<td>-7.5</td>
<td>7.7</td>
<td>-17.2</td>
<td>8.3</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>22.3</td>
<td>22.5</td>
<td>18.6</td>
<td>12.2</td>
<td>-0.9</td>
<td>27.2</td>
</tr>
</tbody>
</table>
</body>
</html>

The Consumer Price Index (CPI-U) rose 0.3% (2.3% y/y) in September. Consensus expectations were for a 0.2% gain. Less food & energy prices were tame, up 0.1% for the second month versus Consensus expectations for a 0.1% rise. The [...]

CPI Up Moderately

<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/031015e.jpg" width="353">
Labor market conditions showed some relative improvement in the UK in the three months centered on July. The unemployment rate held at 5.0%, the same as in the three months centered on April (the customary style of the UK Statistics Office monthly reports on the labor force) and down from 5.1% in the June period. Employment did edge down 25,000 from June, but that latter figure, 27.929 million, was the all- time highest number of people with jobs. Other data hint that employment should remain firm. The number of claims for the &quot;Jobseeker&#39;s Allowance&quot;, the so-called claimant count, fell 1,900 in the September period, extending its decline into a fourth month. Workers&#39; earnings rose 3.4% in the June-August quarter, encompassing a 2.9% rise in private sector earnings and 6.1% in the public sector. The total was 0.1% more than in the three months ended July and suggests a firming after some weakness during the spring. Both private and public sector wages are holding up, although most comes from that sizable increase in the public sector.
Historically, the UK was not particularly known for economic strength, but its current unemployment rate shows that it presently has the most favorable labor market conditions of any of the major economies. The 5.0% unemployment rate for the three months ended August compares with 5.2% in Japan, 6.2% in the US and 9.4% in Germany. The chart above indicates that unemployment in the UK has been less than that in Germany since the beginning of 1996.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">UK: Selected Labor Market Indicators</th>
<th scope="col">&quot;Aug&quot;&nbsp; (3&nbsp; mos ended Sept)</th>
<th scope="col">&quot;Jul&quot; &nbsp;(3&nbsp; mos ended Aug)</th>
<th scope="col">&quot;Jun&quot; &nbsp;(3 mos ended July)</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>N.A.</td>
<td>5.0</td>
<td>5.1</td>
<td>5.2</td>
<td>5.2</td>
<td>5.1</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">Claimant Count (thous.)</td>
<td>933.1</td>
<td>939.1</td>
<td>945.3</td>
<td>945.3</td>
<td>946.8</td>
<td>970.1</td>
<td>1,088.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Labor Force Employment (thous.)</td>
<td>N.A.</td>
<td>27,918</td>
<td>27,921</td>
<td>27,674</td>
<td>27,690</td>
<td>27,499</td>
<td>27,300</td>
</tr>
<tr>
<td class="firstcol">Average Earnings Index: &quot;Headline Rate&quot; (% Change)</td>
<td>N.A.</td>
<td>3.4</td>
<td>3.3</td>
<td>3.7</td>
<td>3.5</td>
<td>4.6</td>
<td>4.6</td>
</tr>
</tbody>
</table>
</body>
</html>

Labor market conditions showed some relative improvement in the UK in the three months centered on July. The unemployment rate held at 5.0%, the same as in the three months centered on April (the customary style of the UK Statistics [...]

UK Unemployment Rate Lowest of Major Economies

<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/031015a.jpg" width="353">
Retail sales fell a sight 0.2% last month. That was near Consensus expectations for no change. The surge in August sales was revised down slightly to 1.2% but July&#39;s gain was revised up to 1.4%.
Motor vehicle dealers&#39; sales fell 1.6% m/m in September as unit sales of light vehicles fell 12.0% m/m to 16.7 mil. (AR). Sales at gasoline service stations rose 0.3% (9.3% y/y).
Sales excluding motor vehicles and parts dealers added 0.3% last month to huge 1.2% gains in each of the prior three months, the August increase revised up from 0.7%. Consensus expectations were for a 0.4% rise in September.
Apparel and accessory stores surged 1.4% (8.7% y/y) and the previously reported large decline in August was revised to just -0.3%. Furniture, home furnishing and electronics store sales fell 0.3% (7.2% y/y) following an unrevised 1.0% August gain. Sales at general merchandise stores added 0.3% (7.1% y/y) to huge gains in the prior four months.
Sales of building materials jumped 1.9% (11.4% y/y), the third large m/m gain in the last four months. The initial report of a 0.2% decline in August sales was revised to a 0.5% gain.
Another source for the large upward revision to nonauto retail sales in August was sales at food services &amp; drinking places which now show a 2.0% increase versus 1.4% reported initially. These sales fell 1.4% last month.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Sept</th>
<th scope="col">Aug</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"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM"> Retail Sales &amp; Food Services</a></td>
<td>-0.2%</td>
<td>1.2%</td>
<td>7.5%</td>
<td>3.1%</td>
<td>2.9%</td>
<td>6.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>0.3%</td>
<td>1.2%</td>
<td>7.2%</td>
<td>3.7%</td>
<td>2.9%</td>
<td>7.4%</td>
</tr>
</tbody>
</table>
Empire State Index Surged in October 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 15, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031015b.jpg" width="353">
The Empire State Index of General Business Conditions for October jumped unexpectedly to the highest level in the index&#39;s brief two year history. The NY Fed&#39;s Manufacturing Survey indicated that the index rose to 33.70 this month versus Consensus expectations for a decline to 14.0.
Both the new orders and shipments indexes rose sharply to record levels in October. Employment also turned sharply higher with the first meaningfully positive reading since June 2002.
The index of prices paid reversed most of the September gain and fell to 6.86 from 15.60.
The survey includes measures of expectations for business conditions six months ahead. The October index rose to its highest level and expectations for capital expenditures also jumped to the highest level since September 2002.
The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.
Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question, not the components.
For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click <a href="http://www.newyorkfed.org/research/regional_economy/empiresurvey_overview.html"> here</a>.

<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/SURVEYS/@S5/@S511/@S511.HTM"> Empire State Manufacturing Survey</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>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Business Conditions (diffusion index)</td>
<td>33.70</td>
<td>18.35</td>
<td>-13.75</td>
<td>7.10</td>
<td>-13.02</td>
</tr>
</tbody>
</table>
Mortgage Applications Plummet 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 15, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031015c.jpg" width="353">
The index of mortgage applications compiled by the Mortgage Bankers Association plunged 20.5% last week to the lowest level since late August.
Purchase applications fell 18.6% w/w to the lowest level since March. The decline pulled the level in early October down 2.5% versus September.
During the last ten years there has been a 55% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance fell 22.1% w/w and more than gave back the prior week&#39;s increase. Applications to refinance are down nearly two-thirds y/y.
Interest rates on a conventional 30-Year mortgage held steady w/w at 6.10%. The effective rate on a 15-year mortgage also was steady at 5.47%.
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">10/10/03</th>
<th scope="col">10/03/03</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>649.6</td>
<td>817.3</td>
<td>799.7</td>
<td>625.6</td>
<td>322.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>359.0</td>
<td>441.1</td>
<td>354.7</td>
<td>304.9</td>
<td>302.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,340.1</td>
<td>3,005.5</td>
<td>3,388.0</td>
<td>2,491.0</td>
<td>438.8</td>
</tr>
</tbody>
</table>
</body>
</html>

Retail sales fell a sight 0.2% last month. That was near Consensus expectations for no change. The surge in August sales was revised down slightly to 1.2% but July's gain was revised up to 1.4%. Motor vehicle dealers' sales fell 1.6% [...]

Retail Sales Fell Slightly, Excl. Autos Firm

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/031015d.jpg" width="353">
Korean consumer sentiment declined sharply in September. Consumers&#39; view of their present situation worsened by 4.6% from August and was 37.3% below September, 2002. The index at 59.9 was the lowest value since December 2000.. Consumer expectations of conditions six months hence, declined by 1.6% and was 13.5% below September, 2002.. As part of their overall appraisal of current and future conditions, consumers are asked to appraise business conditions as well as household conditions and expectations for consumption expenditures. In both cases, consumers&#39; appraisal of the current business situation and expectations of future business conditions were largely responsible for the overall declines in sentiment.. Apprehension with regard to the business situation may have been heightened as a result of the current uncertain political climate. President Roh, who was elected last April has had to cope with an opposition dominated parliament, labor unrest, a series of scandals and declining approval ratings. He has recently called for a referendum on his leadership to take place on December 15. The constitutionality of such a move is in doubt, but whether or not the referendum takes place, the uncertainty is likely to continue to dampen consumer sentiment.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Consumer Sentiment</th>
<th scope="col">SEP 2003</th>
<th scope="col">AUG 2003</th>
<th scope="col">SEP 2002&nbsp;</th>
<th scope="col">M/M&nbsp; %</th>
<th scope="col">Y/Y&nbsp; %</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
<th scope="col">2000 AUG-DEC AVERAGE</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Present situation</td>
<td>59.9</td>
<td>63.9</td>
<td>97.2</td>
<td>-4.2</td>
<td>-37.3</td>
<td>98.3</td>
<td>81.9</td>
<td>77.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Business conditions&nbsp;&nbsp;&nbsp;</td>
<td>45.5</td>
<td>51.2</td>
<td>100.8</td>
<td>-5.7</td>
<td>-55.3</td>
<td>102.5</td>
<td>77.4</td>
<td>70.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Expectations&nbsp;&nbsp; </td>
<td>90.4</td>
<td>92.0</td>
<td>103.9</td>
<td>-1.6</td>
<td>-13.5</td>
<td>104.7</td>
<td>95.9</td>
<td>89.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Business conditions</td>
<td>81.4</td>
<td>86.3</td>
<td>105.9</td>
<td>-4.9</td>
<td>-24.5</td>
<td>108.7</td>
<td>91.8</td>
<td>77.2</td>
</tr>
<tr class="odd">
<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>
</tbody>
</table>
</body>
</html>

Korean consumer sentiment declined sharply in September. Consumers' view of their present situation worsened by 4.6% from August and was 37.3% below September, 2002. The index at 59.9 was the lowest value since December 2000.. [...]

Consumer Sentiment In Korea Declines Sharply

<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/031014a.jpg" width="353">
Chain store sales dipped 0.5% last week following the 1.3% surge during the week prior, according to the BTM-UBSW survey.
So far in October the level of sales is down 0.3% from the September average which fell 0.8% versus August.
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.

<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">10/11/03</th>
<th scope="col">10/04/03</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>421.9</td>
<td>424.0</td>
<td>5.3%</td>
<td>3.6%</td>
<td>2.1%</td>
<td>3.4%</td>
</tr>
</tbody>
</table>
Commodity Prices Up Sharply 
by <a href="/comment/Moeller.html">Tom Moeller</a> October 14, 2003


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/031014b.jpg" width="353">
Prices for industrial commodities recently have surged, suggesting a firming in industrial sector activity. The JoC-ECRI Industrial Price Index rose to a level yesterday that was 4.2% above the September average (25.2% y/y).
The metals sub-index was up 4.7% versus September (17.7% y/y) on the strength of surging prices for steel scrap (24.1% y/y). Prices for aluminum also were up 5.5% versus September (14.7% y/y).
Prices for lumber &amp; plywood retreated somewhat from earlier heights, but they still were up 22.2% y/y.
Textile prices also showed some lift, up 2.3% yesterday versus September (9.7% y/y). Cotton prices have been quite strong (74.6% y/y).
Energy prices continued strong, up 4.5% versus September (7.8% y/y) on the strength of higher prices for crude oil and natural gas. Separately, gasoline prices fell to an average $1.57 per gallon in the opening week of October versus a weekly high of $1.75 one month earlier.
For the October Short Term Energy Outlook from the US Department of Energy click <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.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/@W4/@W403/@W40303/@W40303.HTM">US Retail Gasoline Prices</a></th>
<th scope="col">10/06/03</th>
<th scope="col">12/30/02</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">All Formulations ($/Gal.)</td>
<td>$1.57</td>
<td>$1.44</td>
<td>9.3%</td>
<td>$1.34</td>
<td>$1.42</td>
<td>$1.48</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales dipped 0.5% last week following the 1.3% surge during the week prior, according to the BTM-UBSW survey. So far in October the level of sales is down 0.3% from the September average which fell 0.8% versus August. [...]

Weekly Chain Store Sales Dipped

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

Resilient US economy is pushing up longer-term inflation expectations and interest rates

Positive US economic data surprises leading to upward adjustment of interest rate expectations

Recent aggressive policy easing in China has given a massive boost to equity prices

FOMC expects much more easing now than in June

US is clear world leader in business capital spending on artificial intelligence

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

250314F0.jpg

250314G0.jpg

The National Association of Realtors' Fixed Rate Mortgage Housing Affordability Index (HAI) eased 0.2% (-3.6% y/y) in January to 100.7 after rising 1.5% to 100.9 in December and falling 2.9% in November to 99.4. The level of home affordability has risen 12.0% from its low of 89.9 in October 2023. It remains 43.8% below the high of 179.2 in April 2020.

The slip in affordability in January reflected a 1.6% drop (+5.0% y/y) in the median price of an existing single-family home to $402,000 which was offset by a rise in mortgage rates to 7.04% from 6.80% in December. The price decline was the sixth in the last seven months from the record $432,900 in June. The rise in mortgage rates compared to a September low of 6.26% and a 7.14% high during May. It remained increased from a December 2020 low of 2.73%. These changes raised the principal & interest payment by 0.8% (8.4% y/y) to $2,148 per month. That was well above the most recent low of $984 in February 2020. Monthly mortgage payments averaged a steady 24.8% of income during January. They remained up from a low of 14.0% in April 2020.

The rise in housing costs in January was accompanied by improvement in median family income. It increased 0.7% (4.5% y/y) to a record $103,850 after rising 0.3% in December and 0.4% in November.

Housing affordability was mixed m/m across the country in January. The index rose 0.4% (-5.9% y/y) to 134.2 in the Midwest. It remains the most affordable region of the country. In the South, the index eased 0.6% (-2.5% y/y) to 103.3 and the affordability index in the Northeast fell 1.9% (-8.7% y/y) to 89.9. In the West, where homes are the least affordable, the index weakened 1.8% (-5.5% y/y) to 69.8 in January.

The Housing Affordability Index (HAI) equals 100 when a median-income borrower qualifies for an 80% mortgage on a median-priced existing single-family home. The HAI had exceeded 100 in each month since July 1990 and reached its all-time high of 213.3 in January 2013; since then, it fell below 100 for the first time in June 2022 (98.8).

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**.

250314H0.jpg

250314I0.jpg

- Home prices ease but mortgage rates rise.
- Median income strengthens.
- Affordability weakens in most of country.

U.S. Housing Affordability Is Little Changed in January

250314F2.jpg

250314G2.jpg

Yesterday, March 13, the Federal Reserve published the Financial Accounts for Q4 2024. They show, among numerous other things, that domestic nonfinancial participants in the U.S. economy had borrowings that represented 11.4% of GDP during Q4. This is down moderately from 12.3% in Q3 and produced an amount for the whole year of 2024 of 11.9% of GDP. The quarterly amounts cited here are at seasonally adjusted annual rates.

In Q4, the largest borrowing sector was the federal government, which used $2,602.9 billion, or 8.8% of GDP, up from $2,261 billion in Q3, or 7.7% of GDP.  Households borrowed $624.3 billion or 2.1% of GDP; this amount included $294.3 billion of home mortgages and $133.1 billion of consumer credit.

Nonfinancial business corporations actually paid down debt of $64.1 billion in Q4, or 0.2% of GDP. In Q1 of 2024, businesses had borrowed $698.2 billion and for the whole year, they borrowed $436.6 billion or 1.5% of GDP. State and local governments paid down $46.0 billion in Q4; for the whole year they did use $97.8 billion or 0.3% of GDP.

In addition to domestic borrowers, the foreign sector borrowed $341.3 billion in Q4, or 1.1% of GDP and up from $196.7 billion in Q3.  For all of 2024, foreign participants used $345.5 billion, or 1.2% of GDP.

The Financial Accounts data are in Haver's **FFUNDS** database. The Federal Reserve is the main source, while associated information is compiled in the Integrated Macroeconomic Accounts produced jointly with the Bureau of Economic Analysis (BEA); those nonfinancial data are carried in Haver's **USNA** database as well as in **FFUNDS**. Note that revisions are common throughout the accounts with every quarterly release.

250314H2.jpg

250314I2.jpg

- Nonfinancial sectors together borrowed 11.4% of GDP in Q4.
- Not surprisingly, the largest borrowing sector was the federal government.
- Households had sizable amounts of home mortgage borrowing, though this was less than in Q3.
- Businesses paid down debt in Q4.

U.S. Economic Sectors Borrowed Moderately in Q4 and for All of 2024

Andrew Cates

**Falling US growth momentum**
The latest Blue Chip Economic Indicators survey reflects a shifting global economic landscape, with the US experiencing a notable loss of momentum. After climbing above 2.0% on the back of a strong economic performance in late 2024, consensus forecasts for US growth in 2025 have now been revised downward for the first time in nearly a year. This reversal reflects weaker-than-expected economic data and emerging challenges tied to the policy shifts of the new administration. The downgrade in US growth projections also coincides with a further downward revision to an already subdued outlook for the UK and the euro area, reinforcing concerns about a sluggish global growth outlook (chart 1).

250313Z1.jpg

**Global inflation expectations**
In the meantime the same survey reveals growing concerns about the inflation outlook in the US and Europe this year, and possibly reflecting the impact of US tariff policies on global price pressures. Japan’s inflation forecast for 2025 has also surged, as rising import costs and shifting trade dynamics have additionally contributed to stronger price pressures. This all stands in contrast to China with inflation expectations for this year falling below 1%, reinforcing concerns about deflation and weak demand (chart 2).

250313Z2.jpg

**Global bond markets**
Recent shifts in 10-year government bond yields reflect changing market expectations. While yields have risen sharply in Germany, China, and Japan, they have fallen in the US. Germany’s increase is tied to expanded defense spending and industrial subsidies, while China’s reflects a shift toward more aggressive fiscal easing, with its deficit target rising to 4% of GDP to counter deflation and weak demand. In contrast, falling US yields signal a reassessment of growth expectations under the new administration. This divergence suggests capital may be flowing toward economies with stronger fiscal stimulus, potentially weakening the dollar, increasing borrowing costs for US businesses, and complicating efforts to revive domestic manufacturing.

250313Z3.jpg

**Overseas holdings of US Securities**
Latest data show that foreign-holdings of US long-term securities have risen steadily over the past decade, with a notable acceleration in the past two years. The most recent data additionally highlights a significant increase in foreign ownership of US corporate equities, reflecting, until recently, investor confidence in US companies.

250313Z4.jpg

**Industrialisation versus de-industrialisation**
Recent US policy shifts—particularly higher tariffs on Chinese imports—aim to address the long-term decline in domestic manufacturing jobs. However, their effectiveness is uncertain, given the growing role of automation and AI in reshaping industrial production. While tariffs may offer short-term relief, they are unlikely to reverse decades of global manufacturing shifts. China’s rise from a low-value agrarian economy to an industrial powerhouse has reshaped trade patterns, while US industrial employment has steadily declined, mirroring trends in other advanced economies. Meanwhile, Vietnam and other emerging markets have absorbed manufacturing capacity, benefiting from shifting supply chains. The real challenge for US policymakers is not just bringing back jobs but ensuring domestic industries stay competitive amid changing cost structures and technological advancements.

250313Z5.jpg

**Global competitiveness**
Historically, China's low unit labour costs provided it with a significant advantage, fuelling its manufacturing boom and accelerating the offshoring of US industrial jobs. However, as China's wages have risen due to economic development and increased productivity, and as US unit labour costs have remained relatively stable, the gap has narrowed considerably. Yet, still high labour costs in the US – coupled with rising trade barriers and rising input costs - still pose a challenge to the effectiveness of US policies, as firms may still find it difficult to maintain competitiveness without significant productivity gains. Indeed, as suggested above, there is a real risk that firms may instead accelerate their shift toward automation or relocate production to other low-cost regions (e.g. Vietnam), undermining the broader economic rationale for these interventions. The erosion of economic goodwill, combined with rising costs and financial market instability, additionally suggest that while the strategic objectives of US policy may be clear, the long-term implications remain highly uncertain.

250313Z6.jpg

The recent financial market volatility, marked by sharp swings in bond yields and equity market repricing, reflects growing uncertainty about the trajectory of the US economy amid a rapidly shifting policy environment. The US administration’s latest tariff measures, and their conflicting objectives, have amplified uncertainty, stifled risk appetite and further ignited inflation concerns (charts 1 and 2). Markets are grappling with the inflationary impact of rising import costs, the potential supply chain disruptions caused by abrupt shifts in trade policy, and the broader implications of protectionism on corporate investment. Meanwhile, recent policy announcements from Germany and China, coupled with firming inflationary pressures in Japan, have pushed global (ex-US) bond yields sharply higher, potentially amplifying global financial instability (charts 3 and 4). These shifts could profoundly reshape global trade and investment, not just through economic fundamentals but also through a growing erosion of goodwill toward the United States. As policy unpredictability forces companies and governments to hedge against potential disruptions, trust in the stability of US economic leadership is weakening. At the same time, concerns are mounting over the effectiveness of US policy choices, particularly in relation to one of its core ambitions—reshoring manufacturing jobs (charts 5 and 6). The question remains whether these interventions will achieve their intended goals or simply accelerate automation and supply chain realignment elsewhere.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/3jhzSO4G2WNbw3KYrYFowF?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

<iframe allow="autoplay *; encrypted-media *; fullscreen *; clipboard-write" frameborder="0" height="175" style="width:100%;max-width:660px;overflow:hidden;border-radius:10px;" sandbox="allow-forms allow-popups allow-same-origin allow-scripts allow-storage-access-by-user-activation allow-top-navigation-by-user-activation" src="https://embed.podcasts.apple.com/us/podcast/from-blue-to-red/id1706849345?i=1000699027560"></iframe>

Charts of the Week: From Blue to Red

250313J4.jpg

250313K4.jpg

The Producer Price Index for final demand held steady (+3.2% y/y) during February after increasing 0.6% in January, revised from 0.4% and rising an unrevised 0.5% in December according to the Bureau of Labor Statistics (BLS). The February reading compared to a 0.2% rise expected in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services rose 0.2% (3.3% y/y) last month after an unrevised 0.3% January increase, and an unrevised 0.4% gain in December. The PPI excluding food & energy eased 0.1% (+3.4% y/y) after rising 0.5% in January, revised from 0.3%. A 0.3% increase had been expected.

Energy prices declined 1.2% (-3.7% y/y) during February, after rising 1.8% in January. Gasoline costs fell 4.7% (-8.2% y/y) after rising 0.3% while home heating oil prices declined 9.8% (-12.2% y/y) after a 6.5% strengthening. Electric power prices rose 0.5% (0.9% y/y) in February following a 0.4% January decline and natural gas costs strengthened 1.3% (6.7% y/y) following a 3.8% surge. Diesel fuel prices declined 3.9% (-18.5% y/y) after a 10.5% jump.

Final demand food prices rose 1.7% (5.9% y/y) in February, following a 1.0% January gain. Egg prices jumped 28.1% (136.6% y/y) following a 44.0% increase. Prices for fresh and dry vegetables rose 6.0% (-16.3% y/y) after falling 22.3% in January. Beef & veal prices declined 1.8% (+9.5% y/y) after a 5.7% rise while dairy product prices rose 0.1% (5.7% y/y) after a 0.4% increase.

Final demand goods prices excluding food & energy rose 0.4% (2.1% y/y) in February following a 0.2% rise. Core finished consumer goods prices rose 0.4% (2.1% y/y) after a decline of 0.2% in January. Core nondurable goods prices strengthened 0.6% (2.3% y/y) last month after falling 0.4% in January. Durable consumer goods prices improved 0.2% (1.6% y/y), after edging 0.1% higher in January. Capital equipment prices rose 0.2% (2.5% y/y) last month following a 0.3% gain. Core government-purchased goods prices rose 0.2% (2.4% y/y) in January, after a 0.6% January increase.

Final demand services prices declined 0.2% (+3.9% y/y) last month after rising 0.6% in January. Trade services prices fell 1.0% (+4.0% y/y) last month following a 1.2% gain. Trade of finished goods prices declined 1.1% (3.6% y/y) and reversed the January rise. Prices for final demand transportation and warehousing services held steady (+2.6% y/y) in February, after strengthening 0.9% in January. Services prices less these costs rose 0.2% (4.0% y/y) last month, after a rise of 0.3% in January.

Construction costs eased 0.1% (+1.7% y/y) in February, after increasing 0.4% during January.

Prices for intermediate demand of processed goods rose 0.5% (0.3% y/y) following a 1.0% jump. Processed energy goods prices rose 0.5% last month after increasing 3.6% in January, while food prices rose 2.0% following a 0.7% January gain.

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.

250313L4.jpg

250313M4.jpg

- Energy prices weaken and food prices firm.
- Price gains in core goods pick up.
- Services prices decline.

U.S. PPI Is Unchanged in February; Rise in Core Index Moderates

250313A5.jpg

250313B5.jpg

Initial claims for unemployment insurance were 220,000 seasonally adjusted in the week ended March 8, just slightly less than the 222,000 the week before; that earlier amount was revised marginally from 221,000 reported before. In the latest week, the Action Economics Forecast Survey had expected 230,000. In this March 8 week, the four-week moving average was 226,000.

The total number of unemployment insurance beneficiaries was 1.87 million in the week ended March 1, down from 1.897 million in the week ended February 22. The four-week moving average was 1.872 million through the March 1st week, up from 1.866 million the week before.

The insured unemployment rate, that is, the total number of beneficiaries as a percent of covered employment, remained at 1.2%, which has held since March 2023.

Economic conditions vary widely across states and territories. In the week ended February 22, the highest rates were in Rhode Island (3.37%), New Jersey (2.90%), Massachusetts (2.58%), Minnesota (2.57%) and California (2.42%). The lowest rates were in Florida (0.36%), Alabama (0.44%), Virginia (0.46%), Tennessee and North Carolina (both 0.56%) and Mississippi (0.58%). Rates in other notable states include New York (2.08%), Pennsylvania (2.03%) and Texas (1.12%). These state rates 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.

250313C5.jpg

250313D5.jpg

- Initial claims were less than forecast.
- Total recipients of unemployment insurance also fell.
- Insured unemployment rate still 1.2%.

Economy in Brief: October 2003

Jump to: