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/050126b.jpg" width="353">
Mortgage applications fell 3.6% last week pulling the average level in January 4.3% below the December average according to the Mortgage Bankers Association (MBA) Survey.
Purchase applications fell 2.0% w/w. The second decline in three weeks dropped the January average 9.3% below December. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance fell 5.7% w/w but the January average is up 3.2% from December.
The effective interest rate on a conventional 30-year mortgage slipped again to 5.82% versus an average 6.05% during 2004 and 5.95% in December. The effective rate on a 15-year mortgage also fell to 5.34% last week.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">01/21/05</th>
<th scope="col">01/14/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>658.1</td>
<td>682.9</td>
<td>-24.3%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>439.0</td>
<td>448.1</td>
<td>-2.8%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,932.8</td>
<td>2,048.6</td>
<td>-41.4%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Mortgage applications fell 3.6% last week pulling the average level in January 4.3% below the December average according to the Mortgage Bankers Association (MBA) Survey. Purchase applications fell 2.0% w/w. The second decline in [...]

Mortgage Applications Down

<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/050126a.jpg" width="353">
The Congressional Budget Office (CBO) projects that if current laws and policies remained the same, the US federal government would run budget deficits of $368B this year and $295B in 2006. These compare with estimates of $348B and $298B made in September and reflect roughly offsetting changes in economic and legislative assumptions.
Estimates do not reflect a significant amount of spending for U.S. military operations in Iraq and Afghanistan and for other efforts in the war on terrorism. Spending for these activities is expected to total $30B this year and possibly more in coming years.
For the ten years 2005-2014, the projected deficit fell to $1,364B from the $2,294B estimated in September, which included an extrapolation of spending for the war on terrorism. Budgetary rules do not allow for that inclusion in the new baseline projections. If the extrapolation had been excluded from the September projections, the ten year total deficit would have been $861B.
Federal revenues are projected to grow 9.4% this year (16.8% of GDP) and 7.5% next year. Revenues are projected to continue growing faster than GDP for the next ten years.
Spending is projected to grow 5.8% this year and between 3% and 5% during the next ten years.
Mandatory spending is projected to grow from 54% of total outlays in 2004 to 62% in 2015. Growth of 5.7% per year is principally driven by Medicare &amp; Medicaid outlays which are projected to rise 9.0% and 7.8% annually, respectively, through 2015. Spending growth on Social Security during the ten years is held to 5.6% but annual growth ramps to roughly 6% (versus 4.5% last year) after 2010 due to the retirement of baby-boomers.
Real GDP growth is projected to average 3.2% through 2010 after 3.7% growth this year and 3.8% growth in 2006. CPI growth is projected at 2.2% after 1.9% this year and 2.0% in 2006. The unemployment rate is projected at 5.2%.
CBO&#39;s latest Budget &amp; Economic Outlook for the Years 2006 to 2015 can be found <a href="http://www.cbo.gov/showdoc.cfm?index=6060&amp;sequence=0"> here</a>.
The US Budget Deficit: On an Unsustainable Path from the Brookings Institution is available <a href="http://www.brookings.edu/views/articles/20041201orszaggale.pdf"> here</a>.

</body>
</html>

The Congressional Budget Office (CBO) projects that if current laws and policies remained the same, the US federal government would run budget deficits of $368B this year and $295B in 2006. These compare with estimates of $348B and [...]

CBO Updates US Budget Estimates

<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/050126a.jpg" width="353">
The Congressional Budget Office (CBO) projects that if current laws and policies remained the same, the US federal government would run budget deficits of $368B this year and $295B in 2006. These compare with estimates of $348B and $298B made in September and reflect roughly offsetting changes in economic and legislative assumptions.
Estimates do not reflect a significant amount of spending for U.S. military operations in Iraq and Afghanistan and for other efforts in the war on terrorism. Spending for these activities is expected to total $30B this year and possibly more in coming years.
For the ten years 2005-2014, the projected deficit fell to $1,364B from the $2,294B estimated in September, which included an extrapolation of spending for the war on terrorism. Budgetary rules do not allow for that inclusion in the new baseline projections. If the extrapolation had been excluded from the September projections, the ten year total deficit would have been $861B.
Federal revenues are projected to grow 9.4% this year (16.8% of GDP) and 7.5% next year. Revenues are projected to continue growing faster than GDP for the next ten years.
Spending is projected to grow 5.8% this year and between 3% and 5% during the next ten years.
Mandatory spending is projected to grow from 54% of total outlays in 2004 to 62% in 2015. Growth of 5.7% per year is principally driven by Medicare &amp; Medicaid outlays which are projected to rise 9.0% and 7.8% annually, respectively, through 2015. Spending growth on Social Security during the ten years is held to 5.6% but annual growth ramps to roughly 6% (versus 4.5% last year) after 2010 due to the retirement of baby-boomers.
Real GDP growth is projected to average 3.2% through 2010 after 3.7% growth this year and 3.8% growth in 2006. CPI growth is projected at 2.2% after 1.9% this year and 2.0% in 2006. The unemployment rate is projected at 5.2%.
CBO&#39;s latest Budget &amp; Economic Outlook for the Years 2006 to 2015 can be found <a href="http://www.cbo.gov/showdoc.cfm?index=6060&amp;sequence=0"> here</a>.
The US Budget Deficit: On an Unsustainable Path from the Brookings Institution is available <a href="http://www.brookings.edu/views/articles/20041201orszaggale.pdf"> here</a>.

Mortgage Applications Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 26, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050126b.jpg" width="353">
Mortgage applications fell 3.6% last week pulling the average level in January 4.3% below the December average according to the Mortgage Bankers Association (MBA) Survey.
Purchase applications fell 2.0% w/w. The second decline in three weeks dropped the January average 9.3% below December. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance fell 5.7% w/w but the January average is up 3.2% from December.
The effective interest rate on a conventional 30-year mortgage slipped again to 5.82% versus an average 6.05% during 2004 and 5.95% in December. The effective rate on a 15-year mortgage also fell to 5.34% last week.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">01/21/05</th>
<th scope="col">01/14/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>658.1</td>
<td>682.9</td>
<td>-24.3%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>439.0</td>
<td>448.1</td>
<td>-2.8%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,932.8</td>
<td>2,048.6</td>
<td>-41.4%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

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/050125f.jpg" width="353">
Italy and the Netherlands released indicators of consumer confidence data today. Italian consumers became a little less confident while the Dutch consumers became a little more confident. Neither group is particularlyoptimistic as can be see in the attached chart.
The seasonally adjusted index (1980=100) of Italian consumer confidence declined to 103,3 in January from 103.5 in December. It was the third month of decline from the October high for the year of 105.5. The income tax reduction enacted this month is not likely to be a strong stimulus to consumer demand. It amounts to 6 billion euros, or about one tenth of total household consumption expenditures. In the latest survey the percentage of Italian consumers who are very likely to buy and those who probably will buy a car was 6% compared with 23-25% in the late eighties and nineties as seen in the second chart. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050125g.jpg" width="353">
The Netherlands Confidence Indicator reflects the balance of optimists over pessimists. In January the pessimists outweighed the optimists by 26%, but this was somewhat better than the 29% balance of pessimists in December. Dutch consumers appear to be less pessimistic about their willingness to buy. The January figure of -20 is a 4 point improvement over December and a 2 point improvement over January of 2004.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Italy:&nbsp; Consumer Confidence (1980=100)</th>
<th scope="col">Jan 05</th>
<th scope="col">Dec&nbsp;04</th>
<th scope="col">Jan 04</th>
<th scope="col">M/M %</th>
<th scope="col">Y/Y %</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col">&nbsp; 2002&nbsp; &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Confidence Indicator</td>
<td>103.3</td>
<td>103.5</td>
<td>99.0</td>
<td>-0.10</td>
<td>4.34</td>
<td>101.4</td>
<td>106.2</td>
<td>115.8</td>
</tr>
<tr>
<td class="firstcol">Purchase of Car over nest 2 Years</td>
<td>Jan 05</td>
<td>Dec&nbsp;04</td>
<td>Jan 04</td>
<td>M/M Dif</td>
<td>Y/Y Dif</td>
<td>&nbsp;2004&nbsp;&nbsp;</td>
<td>&nbsp;2003</td>
<td>&nbsp; 2002&nbsp; &nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">% Very Likely</td>
<td>2</td>
<td>2</td>
<td>3</td>
<td>0</td>
<td>-1</td>
<td>2</td>
<td>3</td>
<td>5</td>
</tr>
<tr>
<td class="firstcol">% Probably Will</td>
<td>4</td>
<td>5</td>
<td>5</td>
<td>-1</td>
<td>-1</td>
<td>6</td>
<td>8</td>
<td>12</td>
</tr>
<tr class="odd">
<td class="firstcol">Netherlands Consumer Confidence % Balance</td>
<td>Jan 05</td>
<td>Dec&nbsp;04</td>
<td>Jan 04</td>
<td>M/M Dif</td>
<td>Y/Y Dif</td>
<td>&nbsp;2004&nbsp;&nbsp;</td>
<td>&nbsp;2003</td>
<td>&nbsp; 2002&nbsp; &nbsp;</td>
</tr>
<tr>
<td class="firstcol">Overall confidence</td>
<td>-26</td>
<td>-29</td>
<td>-32</td>
<td>3</td>
<td>6</td>
<td>-25</td>
<td>-35</td>
<td>-20</td>
</tr>
<tr class="odd">
<td class="firstcol">Willingness to Buy</td>
<td>-20</td>
<td>-24</td>
<td>-22</td>
<td>4</td>
<td>2</td>
<td>-21</td>
<td>-21</td>
<td>-8</td>
</tr>
</tbody>
</table>
</body>
</html>

Italy and the Netherlands released indicators of consumer confidence data today. Italian consumers became a little less confident while the Dutch consumers became a little more confident. Neither group is particularlyoptimistic as can [...]

Consumer Confidence in the Euro Area Still at Low Levels: Italy a Bit Worse, The Netherlands a Bit Better

<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/050125e.jpg" width="353">
Sales of existing single family homes slipped 3.3% from the record high in November. At 6.69M, the December tally completed a year where sales rose 8.5% versus 2003 which had risen 9.0%. Consensus expectations had been for December sales of 6.80M.
The figures reflect closings of home sales in earlier months.
Sales were mixed m/m across the country&#39;s regions but set records everywhere for the year. In the South sales fell 4.2% (+6.3% y/y) and in the West sales fell 7.2% (+4.0% y/y). In the Midwest sales rose 1.4% (+3.7% y/y) and in the Northeast sales rose 1.4% (+4.2% y/y) after two down months.
The median price of an existing home single family home rose slightly to $188,900 (+8.1% 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/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Existing Single-Family</td>
<td>&nbsp;6,690</td>
<td>&nbsp;6,920</td>
<td>5.0%</td>
<td>6,614</td>
<td>6,098</td>
<td>5,593</td>
</tr>
</tbody>
</table>
</body>
</html>

Sales of existing single family homes slipped 3.3% from the record high in November. At 6.69M, the December tally completed a year where sales rose 8.5% versus 2003 which had risen 9.0%. Consensus expectations had been for December [...]

U.S. Existing Home Sales Slip From Record Pace

<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/050125c.jpg" width="353">
The Conference Board&#146;s Index of Consumer Confidence ticked slightly higher in January to 103.4 and added to the upwardly revised 10.1 point surge in December. Consensus expectations had been for a slight backpedaling to 101.3.
The present situation index rose for the third straight month, adding 4.9% (+28.8% y/y) to the 9.8% gain in December. The index of consumer expectations retraced 2.3% (-6.6% y/y) of the 11.6% December pop.
During the last twenty years there has been a 51% correlation between consumer confidence and the y/y change in real consumer spending. The correlation rose to 66% during the last ten years.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050125d.jpg" width="353">
Perceptions of the job market continued to improve in January. Jobs were viewed as hard to get by 24.7% of survey participants, the lowest percentage since August 2002. Jobs were viewed as plentiful by 20.7% of survey participants, the highest also since 2002.
The Conference Board&#146;s survey isconducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

<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/@EF14/@EF1401/@EF1401.HTM">Conference Board</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>103.4</td>
<td>102.7</td>
<td>5.8%</td>
<td>96.1</td>
<td>79.8</td>
<td>96.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The Conference Boards Index of Consumer Confidence ticked slightly higher in January to 103.4 and added to the upwardly revised 10.1 point surge in December. Consensus expectations had been for a slight backpedaling to 101.3. The [...]

Consumer Confidence Improved Further

<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/050125a.jpg" width="353">
Chain store sales recovered 0.1% of the prior two weeks&#39; declines which had lowered sales 1.5% from the yearend high, according to the International Council of Shopping Centers (ICSC)-UBS survey.
The average of sales in January are 1.5% ahead of December due to strong gains during the Holiday season.
During the last ten years there has been a 58% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC jumped 1.1% (-1.5% y/y) in the latest week.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">01/22/05</th>
<th scope="col">01/15/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>444.3</td>
<td>443.9</td>
<td>3.1%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales recovered 0.1% of the prior two weeks' declines which had lowered sales 1.5% from the yearend high, according to the International Council of Shopping Centers (ICSC)-UBS survey. The average of sales in January are [...]

Chain Store Sales Ticked Up

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050125a.jpg" width="353">
Chain store sales recovered 0.1% of the prior two weeks&#39; declines which had lowered sales 1.5% from the yearend high, according to the International Council of Shopping Centers (ICSC)-UBS survey.
The average of sales in January are 1.5% ahead of December due to strong gains during the Holiday season.
During the last ten years there has been a 58% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC jumped 1.1% (-1.5% y/y) in the latest week.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">01/22/05</th>
<th scope="col">01/15/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>444.3</td>
<td>443.9</td>
<td>3.1%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
Consumer Confidence Improved Further 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 25, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050125c.jpg" width="353">
The Conference Board&#146;s Index of Consumer Confidence ticked slightly higher in January to 103.4 and added to the upwardly revised 10.1 point surge in December. Consensus expectations had been for a slight backpedaling to 101.3.
The present situation index rose for the third straight month, adding 4.9% (+28.8% y/y) to the 9.8% gain in December. The index of consumer expectations retraced 2.3% (-6.6% y/y) of the 11.6% December pop.
During the last twenty years there has been a 51% correlation between consumer confidence and the y/y change in real consumer spending. The correlation rose to 66% during the last ten years.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050125d.jpg" width="353">
Perceptions of the job market continued to improve in January. Jobs were viewed as hard to get by 24.7% of survey participants, the lowest percentage since August 2002. Jobs were viewed as plentiful by 20.7% of survey participants, the highest also since 2002.
The Conference Board&#146;s survey isconducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

<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/@EF14/@EF1401/@EF1401.HTM">Conference Board</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Consumer Confidence</td>
<td>103.4</td>
<td>102.7</td>
<td>5.8%</td>
<td>96.1</td>
<td>79.8</td>
<td>96.6</td>
</tr>
</tbody>
</table>
U.S. Existing Home Sales Slip From Record Pace 
by <a href="/comment/Moeller.html">Tom Moeller</a> January 25, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050125e.jpg" width="353">
Sales of existing single family homes slipped 3.3% from the record high in November. At 6.69M, the December tally completed a year where sales rose 8.5% versus 2003 which had risen 9.0%. Consensus expectations had been for December sales of 6.80M.
The figures reflect closings of home sales in earlier months.
Sales were mixed m/m across the country&#39;s regions but set records everywhere for the year. In the South sales fell 4.2% (+6.3% y/y) and in the West sales fell 7.2% (+4.0% y/y). In the Midwest sales rose 1.4% (+3.7% y/y) and in the Northeast sales rose 1.4% (+4.2% y/y) after two down months.
The median price of an existing home single family home rose slightly to $188,900 (+8.1% 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/@E9/@E905/@E90501/@E90501.HTM">Existing Home Sales (000, AR)</a></th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Existing Single-Family</td>
<td>&nbsp;6,690</td>
<td>&nbsp;6,920</td>
<td>5.0%</td>
<td>6,614</td>
<td>6,098</td>
<td>5,593</td>
</tr>
</tbody>
</table>
</body>
</html>

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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

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

250325N4.jpg

250325O4.jpg

The Conference Board's Index of Consumer Confidence fell 7.2% (-9.9% y/y) to 92.9 after a 4.9% decline in February to 100.1, revised from down 6.6%. A reading of 94.0 had been expected in the Action Economics Forecast Survey. The March figure was 17.6% below its November high. Weakness in confidence is widespread amongst components in this latest report.

The Expectations Index slumped 12.8% (-11.9% y/y) to 65.2, after a 9.0% February weakening, revised from a 12.9% decline. This latest figure was the weakest since March 2013. The Present Situation index fell 2.6% (-8.4% y/y) to 134.5, after declining 1.3% in February, revised from down 2.4%, after a 2.8% January fall. The reading was the lowest in six months.

The percentage of respondents assessing business conditions as “good” fell to 17.7% this month after declining to 19.1% in February. The index hit a high of 22.0 in October. The percentage assessing conditions as “bad” rose to 16.6% after falling to 14.8% in February. The appraisal of labor market conditions held steady m/m in March as 33.6% of respondents thought jobs were plentiful, down from 41.7% one year earlier. Jobs were viewed as hard to get by 15.7% of respondents this month, down from 16.0% in February. This measure has risen from 11.0% in January 2024. The labor market differential calculated by Haver Analytics (the percentage of consumers who think jobs are plentiful minus the percentage who believe that jobs are currently hard to get) stood at 17.9% compared to 17.6% in February and remained below a high of 47.1% in March 2022. This series has a 60% correlation with the unemployment rate over the last ten years.

Expectations for business conditions deteriorated in March. A lessened 17.1% of respondents expect conditions to improve over the next six months, down from 20.8% in both February and January, while a higher 27.3% expect them to deteriorate, up from 25.5% in February. On employment, a lessened 16.7% expect the number of jobs to increase over the next six months. The percentage expecting the number of jobs to decline in the next six months rose to 28.5% after surging to 26.6% in February, and increasing to 21.0% in January. A lessened 16.3% expect income to increase in six months. That remained down from a high of 20.7% in November and compares to a higher 15.5% who expect income to decrease.

The expected rate of price inflation over the next twelve months rose to 6.2% in March after increasing to 5.8% in February from 5.2% in January. Interest rates are expected to rise this year by a higher 54.6% of respondents, up from 52.6% in February. The percentage of respondents expecting equity prices to increase over the next twelve months plummeted to 37.4% after dropping to 46.7% in February, while the percentage expecting a decline in stock prices jumped to 44.5% after rising to 34.0% in February.

The percentage of respondents planning to buy a home rose in March to 5.4% from 5.3% in February. Plans to purchase an automobile eased to 10.3% this month from a downwardly revised 10.7% in February.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

250325P4.jpg

250325Q4.jpg

- Confidence weakens to lowest level since January 2021.
- Expectations reading plummets to twelve-year low; present situation reading weakens.
- Inflation and interest rate expectations rise further.

U.S. Consumer Confidence Tumbles in March; Inflation Expectations Strengthen

Michael J. Moran

250325A.jpg

250325B.jpg

Sales of new homes rose 1.8% in February, a solid increase on a month-to-month basis, but one that had little influence on the recent trend. The ups and downs of the past two years have traced a sideways path, with the February total of 676 thousand homes (annual rate) nearly identical to the average of 675 thousand in the prior two years.

Results for new home sales in the past two years have been light relative to the burst triggered by low interest rates from mid-2020 to early 2022, and they are well shy of the exuberance seen in the years before the housing-related recession in 2008-09. Otherwise, sales compare favorably with historical norms.

While sales of new homes can be viewed as respectable, more might have been expected given conditions in the market for existing homes. Sales of existing homes have been light in the past two years because of the effects of high interest rates on potential sellers. Many households that might be interested in moving have remained on the sidelines rather than surrender a low-rate mortgage. With a lack of supply, sales of existing homes have been depressed.

The market for new homes is not supply constrained, as the months’ supply is in the upper portion of its historical range. One might expect potential buyers to shift to the new home market given the limited availability in the existing market. However, a slow pace of total sales (new + existing) suggests that the housing market overall is in the doldrums. High interest rates apparently have triggered affordability issues for many buyers.

Despite slow sales, housing prices have not done much to counter affordability issues. The average and median prices of new homes are now drifting lower, but the change has been modest relative to the surge in prices from 2020 to 2022. More notable, the median price of existing homes has continued to move higher, and various indexes of home prices continue to show upward pressure – lighter than it was two to four years ago, but still upward.

New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver's **USECON** database. The consensus expectation figure from Action Economics is available in the **AS1REPNA** database.

250325C.jpg

250325D.jpg

- A Respectable pace of new home sales...
- ...but only a modest counter to soft sales in the existing home market.

New Home Sales: Range Bound Activity in February

Winnie Tapasanun

250325J26.jpg

250325K26.jpg

U.S. house prices rose 0.2% m/m in January after rises of 0.5% in December (+0.4% initially) and 0.4% in November (unrevised), according to the Federal Housing Finance Agency (FHFA) House Price Index. The January reading was the 10th consecutive m/m gain but the smallest since June 2024. The January HPI at 436.52 was 12.9% above a low of 386.53 in August 2022 and 55.2% above a low of 281.32 in May 2020. The year-on-year rate of increase registered at 4.8% in January and December, the highest since July 2024; nevertheless, having remained lower than 6.7% in January 2024 and well below a high of 18.7% in February 2022.

House prices rose m/m in January (vs. December) in six of the nine census divisions. These included West North Central (1.0% vs. -0.2%), Middle Atlantic (0.7% vs. 0.7%), East North Central (0.5% vs. 0.6%), Pacific (0.5% vs. 0.3%), West South Central (0.4% vs. 0.2%), and East South Central (0.2% vs. 0.5%). To the downside, house prices fell m/m in two census divisions in January (vs. December): South Atlantic (-0.8% vs. 0.3%) and Mountain (-0.6% vs. 1.7%). Meanwhile, house prices in New England were virtually unchanged (+7.3% y/y) in January following six straight m/m increases.

Year-on-year house prices continued to gain in January, with the pace of advance accelerating (vs. December) in four of the nine census divisions. These were Middle Atlantic (8.2% vs. 7.2%), East North Central (6.9% vs. 6.4%), East South Central (4.8% vs. 4.0%), and Pacific (3.6% vs. 2.9%). Meanwhile, house price growth decelerated y/y in January (vs. December) in the following four census divisions: Mountain (3.7% vs. 5.1%), South Atlantic (3.9% vs. 4.4%), West North Central (5.0% vs. 5.2%), and New England (7.3% vs. 7.9%). House price growth in the West South Central region held steady at 2.4% y/y.

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.

The FHFA data are available in Haver’s **USECON** database.

250325L26.jpg

250325M26.jpg

- FHFA HPI +0.2% m/m (+4.8% y/y) in Jan.; +0.5% m/m (+4.8% y/y) in Dec.
- House prices up m/m in six of nine census divisions but down in South Atlantic and Mountain.
- House prices up y/y in all of the nine regions, w/ the highest rate in Middle Atlantic (8.2%).

U.S. FHFA House Price Growth Decelerates in January

250325C2.jpg

250325D2.jpg

Retail gasoline prices for all grades rose to a four-week high last week and averaged $3.24 per gallon (-11.0% y/y) after falling to $3.18 in the week ending March 17. Prices have risen from a low of $3.13 in the week of December 9. The recent high was $3.79 in the week ending April 22, 2024. Its all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel improved to $3.57 per gallon (-11.6% y/y) in the week of March 24 after easing to $3.55 in the prior week. The latest diesel price remained well below a high of $4.63 in the week ending September 18, 2023 and a peak of $5.81 in the week ending June 20, 2022.

The price of West Texas Intermediate crude oil edged up to $67.64 per barrel (-17.9% y/y) in the week ended March 21, after rising to $66.74 per barrel in the prior week. Prices have fallen from a high of $78.50 where they were nine weeks ago, remaining below a high of $91.45 in the week of September 29, 2023. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $69.11	 per barrel. The price of European Brent crude oil of $72.18 per barrel (-16.0% y/y) in the week of March 21 compared to $71.54 in the prior week and a high of $82.79 nine weeks ago. Prices remained below a recent high of $95.61 in the week of September 29, 2023 and below a peak of $127.40 in the week of June 10, 2022. Yesterday, the price was $73.96 per barrel.

Natural gas prices held last week at an average $4.14 per mmbtu (168.8% y/y) in the week ended March 21 after easing to $4.15/mmbtu in the prior week. Prices remained well above a low of $1.40/mmbtu in the week of March 15, 2024 but below their peak of $9.56 in the week of August 26, 2022. Yesterday, the price was $4.03 per mmbtu.

Gasoline demand held steady y/y in the four weeks ending March 14 after edging 0.1% higher in the prior four weeks. Demand for all petroleum products rose 2.5% y/y in the four weeks ending March 14 after a 3.9% y/y rise in the previous four-week period. Crude oil input to refineries rose 1.8% y/y in the four weeks ending March 14 after a 3.4% y/y increase in the prior four weeks.

Gasoline inventories rose 4.2% y/y in the week ending March 14 after a 3.0% y/y rise in the week ending March 7. Residual fuel oil inventories fell 21.3% y/y in the week of March 14, after an 17.1% y/y fall in the prior week. Crude oil inventories rose 3.2% y/y in the week of March 14 after a 2.8% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories fell to 27.2 days in the week of March 14 from 27.8 days in the prior week. The recent low was 22.9 days in the week of November 8. The supply of crude oil was 28.0 days in the week of March 14 for the third straight week, but remained below a high of 31.9 days in the week of March 3, 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** & **USENERGY** database.

- Gasoline costs rise.
- Crude oil prices move higher.
- Natural gas costs stabilize.

U.S. Gasoline Prices Strengthen Last Week

Robert Brusca

250325E.jpg

Germany's all sector climate index improved in March to -19.8 from -24 in February. Still, the index only has a 13.9 percentile standing on data back to the early 1990s. The all-sector climate index, the current index and expectations all improve month-to-month with the scope of improvement for the all-sector climate and expectations indexes greater only about 10% of the time. These are sharp month-to-month improvements. However, the levels of the indexes are so weak that the rankings continue to scrape very low levels. Overall conditions in Germany have hardly changed despite the solid month-to-month improvement concentrated in climate and expectations.

**Climate**
The climate measure shows improvements for the all-sector reading, manufacturing, construction wholesaling, retailing, and services. The highest percentile standing for any sector is for construction at a below-median 41.5 percentile standing. The next highest standing is for retailing at a 24.5 percentile standing, the weakest reading is a standing of 10.3% in manufacturing, and the services sector is at a 13.2 percentile standing, not too much stronger than that. 

**Transition-Ho!**
While climate conditions are still in difficult straits, we find that current conditions standings are largely worse than for climate standings; expectations show uneven comparisons. We know there are big changes coming to Europe, particularly for Germany, because of the new shift to more defense spending. This, obviously, will create improvements in the defense sector but should also have broader multiplier effects for the economy, for the manufacturing sector, but also for the economy in general. We also expect these changes to spread across Europe with similar increases in military spending to be introduced in other countries, as the United States is looking for Europe to carry more of its own security burden. We should continue to see improvements in expectations and in climate in the coming months and those improvements should be translated gradually into improved current conditions as well.

**Current conditions-Manufacturing and Construction lead**
Current conditions in the index show improvement across all sectors with minuscule improvements being posted in wholesaling and in retailing in March. The percentile standing for the current indexes in March show the strongest reading in construction; it is the only sector above its median: above its 50th percentile at 61.6%, with retailing close to its 50th percentile mark at 48.2%. The weakest readings are for manufacturing at an 11.9 percentile standing and then services at a 16.9 percentile standing. But manufacturing has the largest month-to-month gain. The overall standing for current conditions is lower still at its 10.7 percentile standing, indicating a confluence of weakness across sectors, a result that has the overall index at a weaker standing than any for individual sector.

**Expectations – Manufacturing surges**
Expectations show broad improvement and for the most part fairly significant improvement across sectors. The headline improvement shows expectations at -16.1 in March compared to -20.5 in February, which leaves the index at a 16.9 percentile standing overall. Expectation standings are weak, however, with the strongest expectation standing in manufacturing at 21.1%, the second strongest for wholesaling at 19.8%; services rank third with the standing of 15.1%. Construction, the sector that has the strongest current and climate standings, has the weakest expectation-standing at the 8.2 percentile mark.

250325.jpg

**Summing up and looking ahead**
These readings begin to pick up some of the changes in progress with expectations showing still very weak current readings but substantial pickups month-to-month. However, most of this is simply expectations improving; it is not expectations built on actually better performance and jumping off from there, as we can see from the fact that the current indexes or the most part are not much changed month-to-month, with extremely little change in wholesaling and retailing. Still, both of those current/expectations reading are higher; manufacturing is also improved in the current reading but expectations are leading the way ahead, improving faster, not the other way around. German transactors are beginning to look to the future recognizing there is a change afoot on military spending that is going to permeate the economy and we're beginning to see that in different aspects of the IFO survey. Stay tuned and stay alert.

Economy in Brief: January 2005

Jump to:

Mortgage Applications Down

CBO Updates US Budget Estimates

CBO Updates US Budget Estimates

Consumer Confidence in the Euro Area Still at Low Levels: Italy a Bit Worse, The Netherlands a Bit Better

U.S. Existing Home Sales Slip From Record Pace

Consumer Confidence Improved Further

Chain Store Sales Ticked Up

Chain Store Sales Ticked Up