Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223e.jpg" align="right" border="0" height="265" width="353">Though the
December Reuters/University of Michigan Index of Consumer Sentiment
slipped from mid-month, is 7.6% increase to 72.5 recovered most of the
declines during the prior two months. The latest figure fell short of
Consensus expectations for a level of 73.8. Nevertheless, sentiment was
up sharply from its low last Fall. During the last ten years there has
been a two-thirds correlation between the level of sentiment and the
three-month change real consumer spending.
Sentiment about
current economic conditions jumped 13.4% from November to the highest
level since March of last year. Assessments of&nbsp; current
financial conditions improved to the highest since September of last
year. Buying conditions for large household goods, including furniture,
refrigerators, stoves &amp; televisions, also moved up by 12.3% to
the highest level since January 2008.&nbsp;&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223f.jpg" align="right" border="0" height="265" width="353">The
full-month December reading on expected economic conditions recovered
its November decline with a 3.6% increase to the highest level since
September. The outlook for business conditions during the next twelve
months improved sharply and recovered most of November's decline but
the expected business conditions during the next five years fell and
expected personal finances advanced just modestly. All three of these
readings recently have been flat after sharp improvement early this
year.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223g.jpg" align="right" border="0" height="265" width="353">Expected
price inflation during the next year was roughly steady
m/m at 3.0% but it was up from last December's reading of
1.7%.&nbsp;Respondents' view of government policy, which may
eventually influence economic expectations, fell sharply m/m to the
lowest level since February. Sixteen percent of respondent thought that
a good job was being done by government versus 39% who thought a poor
job was being done.
The Reuters/University of
Michigan survey data are not seasonally adjusted. The reading is based
on telephone interviews with about 500 households at
month-end.&nbsp; These mid-month results are based on about 320
interviews. The summary indexes are in Haver's USECON database
with details in the proprietary UMSCA database.
Inflation Expectations and the Risk of Deflation from
the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-34.html">
here.</a>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><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">December</th>
<th scope="col">Mid-December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Dec y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>72.5</td>
<td>73.4</td>
<td>67.4</td>
<td>70.6</td>
<td>20.6%</td>
<td>66.3</td>
<td>63.8</td>
<td>85.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>78.0</td>
<td>79.1</td>
<td>68.8</td>
<td>73.7</td>
<td>12.2</td>
<td>69.6</td>
<td>73.7</td>
<td>101.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>68.9</td>
<td>69.7</td>
<td>66.5</td>
<td>68.6</td>
<td>27.6</td>
<td>64.1</td>
<td>57.3</td>
<td>75.6</td>
</tr>
</tbody>
</table>


</body></html>

Though the December Reuters/University of Michigan Index of Consumer Sentiment slipped from mid-month, is 7.6% increase to 72.5 recovered most of the declines during the prior two months. The latest figure fell short of Consensus [...]

Michigan Consumer Sentiment Increases Smartly

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223a.jpg" align="right" border="0" height="265" width="353">Tax breaks
continued to spur growth in disposable personal income.
Last month's 0.5% gain followed an upwardly revised 0.5% October
increase. A decline in tax payments (-25.7% y/y), which began early in
2008, helped spur y/y disposable income growth to 3.1%. Adjusted for a
0.2% (1.5% y/y) rise in the chain price index, real disposable income
rose 0.2% (1.5% y/y) for the third consecutive month. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223b.jpg" align="right" border="0" height="265" width="353">Personal
spending rose 0.5% after a 0.6% October increase which was
double the initial estimate. The rise fell short of the 0.7% increase
which was the Consensus expectation. Durables spending jumped 1.1%
(2.5% y/y) as spending on motor vehicles gained another 2.2% (7.9% y/y)
following a 9.5% October surge. Spending on other durables, however,
remained lackluster. Furniture &amp; appliance purchases fell
slightly for the second month and were off 2.9% y/y. Spending on
nondurables increased 1.5% (4.6% y/y) as outlays on gasoline jumped
7.2% (18.6% y/y) with higher prices. In constant dollars gasoline
outlays rose just 0.9% and were down slightly y/y. Spending on clothing
slipped 0.3% (-1.1% y/y) though that y/y change is improved from 6.8%
decline at the worst of the recent recession. Outlays on services were
unchanged (1.5% y/y). Spending on health care rose 0.4% (4.8% y/y) but
housing &amp; utilities spending fell 0.4% (+0.2% y/y).
As a
result of tax cuts and moderate spending, the savings rate held steady
at the upwardly revised 4.7% October level. The rate has risen sharply
from near 1.0% at the beginning of last year.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223c.jpg" align="right" border="0" height="265" width="353">Overall personal
income gained 0.4% during November after an upwardly revised
0.3% October increase. The latest figure fell short of Consensus
expectations for a 0.5% rise. Wages &amp; salaries rose 0.3% due to
the pickup in average hourly earnings reported with the jobs numbers.
Nevertheless, year-to-year growth in wages continued negative (-2.8%
y/y), only slightly improved from the worst y/y growth of this cycle.
Wages in the factory sector rose 0.2% (-10.4% y/y) after a 0.4% October
decline. In the service sector wages rose a firmer 0.4% (-1.7% y/y).
Though wages in the government sector only ticked up 0.1% last month,
the 2.9% y/y gain easily outpaced the 4.1% decline in private sector
earnings.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223d.jpg" align="right" border="0" height="265" width="353">Growth in
unemployment insurance payments slowed
further as joblessness fell. In fact, moderate declines during the last
two months compare with the y/y doubling earlier this year. Interest
income rose 0.2% (-4.6% y/y) as the decline in rates found a bottom
while another 0.9% m/m&nbsp; increase in dividend income
nevertheless left it down 18.0% y/y with the weaker economy.
The PCE chain price index increased a
moderate 0.2%
during November led by a 6.2% (18,5% y/y) increase in gasoline costs.
Less food-and-energy, "core" prices were unchanged. Prices for durable
goods were off 0.1% (-1.1% y/y) as home furnishing prices fell 0.5%
(-2.1% y/y) and apparel prices also fell 0.5% (+0.8% y/y). Prices for
services gained a steady 1.2% y/y.
The personal income &amp;
consumption figures are available in Haver's USECON
and USNA databases.
<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/@E7/@E711/@E71102/@E71102.HTM" style="color: Black;">Disposition of Personal Income</a>
(%)&nbsp;</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4</td>
<td>0.3</td>
<td>0.3</td>
<td>-0.3</td>
<td>2.9</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp;Disposable Personal Income</td>
<td>0.5</td>
<td>0.5</td>
<td>0.3</td>
<td>3.1</td>
<td>3.9</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption
Expenditures</td>
<td>0.5</td>
<td>0.6</td>
<td>-0.6</td>
<td>2.3</td>
<td>3.1</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>4.7</td>
<td>4.7</td>
<td>4.8</td>
<td>3.8 (Nov.'08)</td>
<td>2.6</td>
<td>1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>0.2</td>
<td>0.3</td>
<td>0.1</td>
<td>1.5</td>
<td>3.3</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Less food &amp; energy</td>
<td>0.0</td>
<td>0.2</td>
<td>0.1</td>
<td>1.4</td>
<td>2.4</td>
<td>2.4</td>
</tr>
</tbody>
</table>


</body></html>

Tax breaks continued to spur growth in disposable personal income. Last month's 0.5% gain followed an upwardly revised 0.5% October increase. A decline in tax payments (-25.7% y/y), which began early in 2008, helped spur y/y [...]

U.S. Disposable Personal Income & Spending Continue Firm

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223a.jpg" align="right" border="0" height="265" width="353">Tax breaks
continued to spur growth in disposable personal income.
Last month's 0.5% gain followed an upwardly revised 0.5% October
increase. A decline in tax payments (-25.7% y/y), which began early in
2008, helped spur y/y disposable income growth to 3.1%. Adjusted for a
0.2% (1.5% y/y) rise in the chain price index, real disposable income
rose 0.2% (1.5% y/y) for the third consecutive month. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223b.jpg" align="right" border="0" height="265" width="353">Personal
spending rose 0.5% after a 0.6% October increase which was
double the initial estimate. The rise fell short of the 0.7% increase
which was the Consensus expectation. Durables spending jumped 1.1%
(2.5% y/y) as spending on motor vehicles gained another 2.2% (7.9% y/y)
following a 9.5% October surge. Spending on other durables, however,
remained lackluster. Furniture &amp; appliance purchases fell
slightly for the second month and were off 2.9% y/y. Spending on
nondurables increased 1.5% (4.6% y/y) as outlays on gasoline jumped
7.2% (18.6% y/y) with higher prices. In constant dollars gasoline
outlays rose just 0.9% and were down slightly y/y. Spending on clothing
slipped 0.3% (-1.1% y/y) though that y/y change is improved from 6.8%
decline at the worst of the recent recession. Outlays on services were
unchanged (1.5% y/y). Spending on health care rose 0.4% (4.8% y/y) but
housing &amp; utilities spending fell 0.4% (+0.2% y/y).
As a
result of tax cuts and moderate spending, the savings rate held steady
at the upwardly revised 4.7% October level. The rate has risen sharply
from near 1.0% at the beginning of last year.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223c.jpg" align="right" border="0" height="265" width="353">Overall personal
income gained 0.4% during November after an upwardly revised
0.3% October increase. The latest figure fell short of Consensus
expectations for a 0.5% rise. Wages &amp; salaries rose 0.3% due to
the pickup in average hourly earnings reported with the jobs numbers.
Nevertheless, year-to-year growth in wages continued negative (-2.8%
y/y), only slightly improved from the worst y/y growth of this cycle.
Wages in the factory sector rose 0.2% (-10.4% y/y) after a 0.4% October
decline. In the service sector wages rose a firmer 0.4% (-1.7% y/y).
Though wages in the government sector only ticked up 0.1% last month,
the 2.9% y/y gain easily outpaced the 4.1% decline in private sector
earnings.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223d.jpg" align="right" border="0" height="265" width="353">Growth in
unemployment insurance payments slowed
further as joblessness fell. In fact, moderate declines during the last
two months compare with the y/y doubling earlier this year. Interest
income rose 0.2% (-4.6% y/y) as the decline in rates found a bottom
while another 0.9% m/m&nbsp; increase in dividend income
nevertheless left it down 18.0% y/y with the weaker economy.
The PCE chain price index increased a
moderate 0.2%
during November led by a 6.2% (18,5% y/y) increase in gasoline costs.
Less food-and-energy, "core" prices were unchanged. Prices for durable
goods were off 0.1% (-1.1% y/y) as home furnishing prices fell 0.5%
(-2.1% y/y) and apparel prices also fell 0.5% (+0.8% y/y). Prices for
services gained a steady 1.2% y/y.
The personal income &amp;
consumption figures are available in Haver's USECON
and USNA databases.
<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/@E7/@E711/@E71102/@E71102.HTM" style="color: Black;">Disposition of Personal Income</a>
(%)&nbsp;</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.4</td>
<td>0.3</td>
<td>0.3</td>
<td>-0.3</td>
<td>2.9</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
&nbsp;Disposable Personal Income</td>
<td>0.5</td>
<td>0.5</td>
<td>0.3</td>
<td>3.1</td>
<td>3.9</td>
<td>4.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption
Expenditures</td>
<td>0.5</td>
<td>0.6</td>
<td>-0.6</td>
<td>2.3</td>
<td>3.1</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>4.7</td>
<td>4.7</td>
<td>4.8</td>
<td>3.8 (Nov.'08)</td>
<td>2.6</td>
<td>1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>0.2</td>
<td>0.3</td>
<td>0.1</td>
<td>1.5</td>
<td>3.3</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Less food &amp; energy</td>
<td>0.0</td>
<td>0.2</td>
<td>0.1</td>
<td>1.4</td>
<td>2.4</td>
<td>2.4</td>
</tr>
</tbody>
</table>

 Michigan Consumer Sentiment
Increases Smartly 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 23, 2009

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223e.jpg" align="right" border="0" height="265" width="353">Though the
December Reuters/University of Michigan Index of Consumer Sentiment
slipped from mid-month, is 7.6% increase to 72.5 recovered most of the
declines during the prior two months. The latest figure fell short of
Consensus expectations for a level of 73.8. Nevertheless, sentiment was
up sharply from its low last Fall. During the last ten years there has
been a two-thirds correlation between the level of sentiment and the
three-month change real consumer spending.
Sentiment about
current economic conditions jumped 13.4% from November to the highest
level since March of last year. Assessments of&nbsp; current
financial conditions improved to the highest since September of last
year. Buying conditions for large household goods, including furniture,
refrigerators, stoves &amp; televisions, also moved up by 12.3% to
the highest level since January 2008.&nbsp;&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223f.jpg" align="right" border="0" height="265" width="353">The
full-month December reading on expected economic conditions recovered
its November decline with a 3.6% increase to the highest level since
September. The outlook for business conditions during the next twelve
months improved sharply and recovered most of November's decline but
the expected business conditions during the next five years fell and
expected personal finances advanced just modestly. All three of these
readings recently have been flat after sharp improvement early this
year.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223g.jpg" align="right" border="0" height="265" width="353">Expected
price inflation during the next year was roughly steady
m/m at 3.0% but it was up from last December's reading of
1.7%.&nbsp;Respondents' view of government policy, which may
eventually influence economic expectations, fell sharply m/m to the
lowest level since February. Sixteen percent of respondent thought that
a good job was being done by government versus 39% who thought a poor
job was being done.
The Reuters/University of
Michigan survey data are not seasonally adjusted. The reading is based
on telephone interviews with about 500 households at
month-end.&nbsp; These mid-month results are based on about 320
interviews. The summary indexes are in Haver's USECON database
with details in the proprietary UMSCA database.
Inflation Expectations and the Risk of Deflation from
the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-34.html">
here.</a>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><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">December</th>
<th scope="col">Mid-December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Dec y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>72.5</td>
<td>73.4</td>
<td>67.4</td>
<td>70.6</td>
<td>20.6%</td>
<td>66.3</td>
<td>63.8</td>
<td>85.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>78.0</td>
<td>79.1</td>
<td>68.8</td>
<td>73.7</td>
<td>12.2</td>
<td>69.6</td>
<td>73.7</td>
<td>101.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>68.9</td>
<td>69.7</td>
<td>66.5</td>
<td>68.6</td>
<td>27.6</td>
<td>64.1</td>
<td>57.3</td>
<td>75.6</td>
</tr>
</tbody>
</table>

 
U.S. New Home Sales Fall
Sharply 
by <a href="/comment/Moeller.html">Tom
Moeller</a> Deecember 23, 2009

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223h.jpg" align="right" border="0" height="265" width="353">Conflicting
signals have been flashed regarding homes sales last month. In contrast
to yesterday's report that existing home sales rose, today the Commerce
Department reported that new home sales fell by 11.3% m/m to 355,000,
the lowest level since April. Nevertheless, near term home sales should
be helped by the recent extension of the Federal government's tax
credit which now it is for all home buyers and not just first-time
purchases. The November sales figure fell well short of Consensus
expectations for 439,000 sales.&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223i.jpg" align="right" border="0" height="265" width="353">Home
prices firmed
during November though the October figure was revised down. The median
price of a new single-family home rose to $217,400 which was the
highest level since May. The increase pared the y/y decline to 1.9%
from its worst of -14.5% this past February. The average new home price
of $280,300 was off 3.4% y/y.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223j.jpg" align="right" border="0" height="265" width="353">Price
discounts, higher sales
and much lower housing starts have combined to lower the overhang of
unsold homes by more than one-third y/y to the overhang lowest level
since the early-1970s. The months' supply of unsold homes rose
moderately to 7.9 months but remained down from the high of 12.4 months
in January. The figure was the lowest since May 2007.
Recent
Developments in Mortgage Finance from the Federal Reserve
Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-33.html">
here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">US
New Homes</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Sales
(SAAR, 000s)</td>
<td>355</td>
<td>400</td>
<td>393</td>
<td>-9.0%</td>
<td>481</td>
<td>769</td>
<td>1,049</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>29</td>
<td>30</td>
<td>36</td>
<td>&nbsp;-23.7</td>
<td>35</td>
<td>64</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>68</td>
<td>56</td>
<td>68</td>
<td>23.6</td>
<td>69</td>
<td>118</td>
<td>161</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>179</td>
<td>227</td>
<td>196</td>
<td>-14.8</td>
<td>264</td>
<td>409</td>
<td>559</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>79</td>
<td>87</td>
<td>93</td>
<td>-9.2</td>
<td>113</td>
<td>178</td>
<td>266</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>217,400</td>
<td>209,400</td>
<td>213,500</td>
<td>&nbsp;-1.9</td>
<td>230,408</td>
<td>243,742</td>
<td>243,067</td>
</tr>
</tbody>
</table>

 Italy's Consumer Confidence Lifts Spirits For Christmas Oh Come Ye Faithful... 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 23, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091223e.jpg" align="left" border="0" height="265" width="353">
Confidence rose again in December for Italian consumers making
the string of rises two months long. Still, the overall situation
deteriorated by one point to a -57 reading in December leaving the
current situation in the 68th percentile of its range. 

The outlook for the overall situation also backtracked
dropping by 5 points month to month. Unemployment expectations rose and
now reside on the top 5% of their range. 

The outlook for current savings backtracked but the outlook
for future savings rose sharply in the month. 
 

The current environment for major purchase was sharply better
with its index rising to -38 from -43 and moving up to the 59th
percentile of its range. 

Clearly the Italian consumer still feels pressured. The rise
in confidence is a good development despite backtracking in some key
components. 

Italy still has a long way to go to cement any notion of
stability. 


Italy ISAE Consumer Confidence
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since Jan 1992&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Rank</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>Percentile</td>
<td>Rank</td>
<td>percentile</td>
</tr>
<tr class="grey2">
<td class="firstcol">Consumer Confidence</td>
<td>113.7</td>
<td>112.8</td>
<td>111.7</td>
<td>113.6</td>
<td>60.1</td>
<td>76</td>
<td>64.3%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Last 12 months</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; OVERALL SITUATION</td>
<td>-57</td>
<td>-56</td>
<td>-58</td>
<td>-58</td>
<td>72.0</td>
<td>68</td>
<td>68.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; PRICE TRENDS</td>
<td>-41</td>
<td>-39</td>
<td>-40.5</td>
<td>-42</td>
<td>13.6</td>
<td>207</td>
<td>2.8%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Next 12months</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; OVERALL SITUATION</td>
<td>-1</td>
<td>4</td>
<td>-2</td>
<td>5</td>
<td>60.3</td>
<td>109</td>
<td>48.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; PRICE TRENDS</td>
<td>8.5</td>
<td>8</td>
<td>7</td>
<td>9.5</td>
<td>17.3</td>
<td>96</td>
<td>54.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; UNEMPLOYMENT</td>
<td>16</td>
<td>15</td>
<td>19</td>
<td>17</td>
<td>67.6</td>
<td>10</td>
<td>95.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; HOUSEHOLD BUDGET</td>
<td>1</td>
<td>3</td>
<td>5</td>
<td>6</td>
<td>17.8</td>
<td>199</td>
<td>6.6%</td>
</tr>
<tr class="grey3">
<td colspan="4">HOUSEHOLD FIN SITUATION</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; Last 12 months</td>
<td>-37</td>
<td>-36</td>
<td>-35</td>
<td>-33</td>
<td>38.8</td>
<td>129</td>
<td>39.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; Next12 months</td>
<td>-3</td>
<td>-2</td>
<td>-4</td>
<td>-1</td>
<td>65.3</td>
<td>102</td>
<td>52.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">HOUSEHOLD SAVINGS</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; Current</td>
<td>73</td>
<td>77</td>
<td>79</td>
<td>80</td>
<td>88.3</td>
<td>6</td>
<td>97.2%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; Future</td>
<td>-20</td>
<td>-29</td>
<td>-30</td>
<td>-16</td>
<td>62.2</td>
<td>124</td>
<td>41.8%</td>
</tr>
<tr class="grey3">
<td class="firstcol">MAJOR Purchases</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp; Current</td>
<td>-38</td>
<td>-43</td>
<td>-38</td>
<td>-40</td>
<td>47.3</td>
<td>87</td>
<td>59.2%</td>
</tr>
<tr class="grey1">
<td colspan="8">Total number of
months:&nbsp;&nbsp; 213</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Disposable Personal Income& Spending Continue Firm

Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222k.jpg" align="left" border="0" height="265" width="353">
According to the latest GfK* survey, the German Consumer
Climate is cooling, not that it was recently especially warm. Based on
consumers' appraisals of the outlooks for the economy and their
personal situation and their willingness to spend in the current month,
GfK forecasts the Consumer Climate in the month ahead. Currently, they
are forecasting a decline in the Consumer Climate Indicator to 3.3% in
January. This is the third decline in the indicator from the 4.2%
reached in October, 2009. Since it began in January, 2002, the
indicator has been within a fairly narrow range, from a high of 9.1%
recorded in November and December of 2006 to a low of -3.5%, recorded
in March, 2003.
The balance of opinion of German Consumers on Economic
Expectations improved from -1.7% in November to 0.9% in December, but
was still well below the 8.7% of October. The balance of opinion on
Income Expectations more than doubled from 6.2% in November to 15.0% in
December. However, the balance of opinion on the Consumption and Buying
Propensity declined significantly from 26.3% in November to 21.1% in
December and is now well below the recent peak of 36.5% in September.
It appears that the decline in the balance of opinion on the
Consumption and Buying Propensity is the major cause of the decline in
the Consumer Climate.
The component parts of the Climate Indicator have shown much
greater variation than the over all indicator. In contrast to the
narrow range of the Consumer Climate indicator, cited above, the
balance of opinion on Economic Expectations has ranged from a high of
69.5% in May, 2007 to a low of -32/9 in January, 2009. The balance of
opinion for Income Expectations has ranged from 33.6% in May 2007 to
-24.5% in November, 2002 and for Consumption and Buying Propensity,
from a high of 64.4% in October 2006. to a low of -55.4% in November
2002. All four indicators are shown in the attached chart.*GfK
Gesellschaft fur Konsumforschung (Company for Consumer Research)

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">GFK
Consumer Climate Survey&nbsp;</th>
<th scope="col">Jan 10</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct&nbsp; 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09&nbsp;</th>
<th scope="col">Jun 09</th>
<th scope="col">May 09</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Climate (% balance)</td>
<td>3.3</td>
<td>3.6</td>
<td>3.9</td>
<td>4.2</td>
<td>3.8</td>
<td>3.4</td>
<td>3.0</td>
<td>2.7</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Economic Expectations</td>
<td>--</td>
<td>1.7</td>
<td>0.9</td>
<td>8.7</td>
<td>3.4</td>
<td>-7.5</td>
<td>-14.0</td>
<td>-26.6</td>
<td>-28.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Income Expectations</td>
<td>--</td>
<td>15.0</td>
<td>6.2</td>
<td>12.9</td>
<td>16.0</td>
<td>8.8</td>
<td>1.8</td>
<td>-3.3</td>
<td>-9.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumption and
Buying Propensity</td>
<td>--</td>
<td>21.2</td>
<td>26.3</td>
<td>26.1</td>
<td>36.5</td>
<td>31.1</td>
<td>25.1</td>
<td>14.5</td>
<td>12.5</td>
</tr>
</tbody>
</table>
</body></html>

According to the latest GfK* survey, the German Consumer Climate is cooling, not that it was recently especially warm. Based on consumers' appraisals of the outlooks for the economy and their personal situation and their willingness [...]

German Consumer Climate Cooling Slightly

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222g.jpg" align="right" border="0" height="265" width="353">
Improvement in housing prices continued this fall according
the U.S. House Price Index from the Federal Housing and Finance Agency
(FHFA). The Purchase Only Index for October rose 0.6% and reversed its
September. Nevertheless, the year-to-year decline in the nationwide
average of home prices eased to -1.9% from its worst reading of -8.8%
last November. Since their peak in early-2007 home prices nationwide
have fallen 10.7%. The FHFA uses data provided by Fannie Mae and
Freddie Mac and is not value-weighted.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222h.jpg" align="right" border="0" height="265" width="353">
The HPI is calculated using a repeat sales index. That means
that the HPI measures changes in the price of the same property over
time but does not measure changes in property types over time. So if,
for example, the price of a larger, new home was not growing very
rapidly, but the number of people transitioning from smaller homes to
larger homes greatly increased, median house prices would go up (people
buying more expensive houses) much more than the HPI. In this way, the
HPI is a better measure of how any particular home is appreciating
while the median house price is a better measure of what the typical
home buyer is paying.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222i.jpg" align="right" border="0" height="265" width="353">
Notable monthly gains in home prices during October were
logged in the Pacific, Middle Atlantic and the East South Central
regions of the country and the y/y declines have moderated
significantly. In the populous East North Central region prices slipped
another 0.6% during October and they were flat year-to-date. Prices
also fell sharply in the South Atlantic region to the lowest level
since 2004.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222j.jpg" align="right" border="0" height="265" width="353">


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">FHFA
U.S. House Price Index Purchase Only (%)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.6</td>
<td>-0.4</td>
<td>-1.9</td>
<td>-5.8</td>
<td>1.3</td>
<td>6.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New England</td>
<td>0.0</td>
<td>0.3</td>
<td>-1.8</td>
<td>-4.6</td>
<td>-1.7</td>
<td>1.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Middle
Atlantic</td>
<td>1.8</td>
<td>-1.5</td>
<td>-1.6</td>
<td>-2.3</td>
<td>1.9</td>
<td>6.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; East North
Central</td>
<td>-0.6</td>
<td>-0.7</td>
<td>-1.9</td>
<td>-4.4</td>
<td>-1.3</td>
<td>1.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West North
Central</td>
<td>0.2</td>
<td>0.0</td>
<td>-0.7</td>
<td>-2.8</td>
<td>1.0</td>
<td>3.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South
Atlantic</td>
<td>-1.1</td>
<td>0.2</td>
<td>-4.1</td>
<td>-7.2</td>
<td>1.3</td>
<td>7.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; East South
Central</td>
<td>1.6</td>
<td>-1.5</td>
<td>-0.4</td>
<td>-1.4</td>
<td>3.8</td>
<td>7.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West South
Central</td>
<td>0.5</td>
<td>-0.3</td>
<td>0.0</td>
<td>0.6</td>
<td>4.7</td>
<td>7.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mountain</td>
<td>0.8</td>
<td>-1.4</td>
<td>-7.5</td>
<td>-6.1</td>
<td>3.9</td>
<td>10.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Pacific</td>
<td>3.7</td>
<td>-0.9</td>
<td>-0.3</td>
<td>-17.3</td>
<td>0.1</td>
<td>9.8</td>
</tr>
</tbody>
</table>
</body></html>

Improvement in housing prices continued this fall according the U.S. House Price Index from the Federal Housing and Finance Agency (FHFA). The Purchase Only Index for October rose 0.6% and reversed its September. Nevertheless, the [...]

FHFA Home Price Index Improves Slightly M/M But Greatly Y/Y

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222a.jpg" align="right" border="0" height="265" width="353">The second
revision to 3Q U.S. real GDP lowered growth again, this time to 2.2%
(AR) from last month's report of 2.9% growth. The revised figure
compares to the advance report of 3.5% growth and was contrary to
expectations for an improvement to 2.8%. Still, growth last quarter was
the first positive figure since 4Q 2007. Estimates of economic growth
this quarter recently have been rising to roughly 4.0%.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222b.jpg" align="right" border="0" height="265" width="353">The
largest surprise in the revision was that domestic final demand growth
was again revised down, to 2.3% from 2.7%. On the fixed-investment
side, business fixed investment fell at an increased 5.9% (-19.6% y/y)
rate. The quarterly rise in residential spending was reduced to 18.9%
(-18.9% y/y) and government investment grew at a reduced 2.7% rate
(2.0% y/y). Real PCE growth was little changed at 2.8% (-0.2% y/y).

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222c.jpg" align="right" border="0" height="265" width="353">Another
surprise in the figures was
that the 3Q contribution to GDP growth from inventories was revised
lower to 0.7 percentage points. Nevertheless, the 3Q addition followed
subtractions of 1.4 and 2.4 percentage points during the prior two
quarters, and was just the second positive contribution to GDP growth
in two years.
Accompanying the GDP figure was a
little-revised estimate that 3Q corporate profits rose 10.8% versus 2Q.
That was the third consecutive quarterly increase and diminished the
y/y change to -6.6% from -25.1% at its worst in 4Q' 08. Lower market
interest rates lifted earnings in the financial sector by more than
one-third (20.5% y/y) and they tripled from year-end '08. Earnings from
the rest of the world increased 7.3% (-18.6% y/y) while the end of the
recession raised domestic nonfinancial profits by an upwardly revised
4.2% (-10.6% y/y) for the second quarterly increase.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222d.jpg" align="right" border="0" height="265" width="353">Deterioration
in the foreign trade deficit subtracted an unrevised 0.8 percentage
points from 3Q GDP growth following an advance estimate of a&nbsp;
0.5% subtraction. Imports grew 21.3% (-14.0% y/y) and the gain in
exports also was little-revised at 17.8% (-10.7% y/y).
The gain in the GDP price deflator was lowered slightly
to 0.4%. The PCE price index was ticked lower to 2.6% (-0.7% y/y) and
the rise in the overall domestic final sales price index was brought
down to 1.4% (-1.0% y/y).
 The U.S. National Income &amp; Product
Account data are available in Haver's USECON and
the USNA databases.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained
2005$, % AR</a></th>
<th scope="col">3Q '09 Final</th>
<th scope="col">3Q '09 Preliminary</th>
<th scope="col">3Q '09 Advance</th>
<th scope="col">2Q '09</th>
<th scope="col">1Q '09</th>
<th scope="col">2Q Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>2.2</td>
<td>2.4</td>
<td>3.5</td>
<td>-0.7</td>
<td>-6.4</td>
<td>-2.6</td>
<td>0.4</td>
<td>2.1</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Inventory
Effect</td>
<td>0.7</td>
<td>0.9</td>
<td>0.9</td>
<td>-1.4</td>
<td>-2.4</td>
<td>-0.9</td>
<td>-0.4</td>
<td>-0.4</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>1.5</td>
<td>1.9</td>
<td>2.6</td>
<td>0.7</td>
<td>-4.1</td>
<td>-1.7</td>
<td>0.8</td>
<td>2.5</td>
<td>2.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Foreign
Trade Effect</td>
<td>-0.8</td>
<td>-0.8</td>
<td>-0.5</td>
<td>1.7</td>
<td>2.6</td>
<td>0.8</td>
<td>-1.2</td>
<td>0.8</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>2.3</td>
<td>2.7</td>
<td>3.0</td>
<td>-0.9</td>
<td>-6.4</td>
<td>-2.5</td>
<td>-0.4</td>
<td>1.7</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>0.4</td>
<td>0.5</td>
<td>0.8</td>
<td>-0.0</td>
<td>1.9</td>
<td>0.6</td>
<td>2.1</td>
<td>2.9</td>
<td>3.3</td>
</tr>
</tbody>
</table>

</body></html>

The second revision to 3Q U.S. real GDP lowered growth again, this time to 2.2% (AR) from last month's report of 2.9% growth. The revised figure compares to the advance report of 3.5% growth and was contrary to expectations for an [...]

U.S. GDP Revised Downward: Domestic Demand & Inventories Are Shaved

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222a.jpg" align="right" border="0" height="265" width="353">The second
revision to 3Q U.S. real GDP lowered growth again, this time to 2.2%
(AR) from last month's report of 2.9% growth. The revised figure
compares to the advance report of 3.5% growth and was contrary to
expectations for an improvement to 2.8%. Still, growth last quarter was
the first positive figure since 4Q 2007. Estimates of economic growth
this quarter recently have been rising to roughly 4.0%.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222b.jpg" align="right" border="0" height="265" width="353">The
largest surprise in the revision was that domestic final demand growth
was again revised down, to 2.3% from 2.7%. On the fixed-investment
side, business fixed investment fell at an increased 5.9% (-19.6% y/y)
rate. The quarterly rise in residential spending was reduced to 18.9%
(-18.9% y/y) and government investment grew at a reduced 2.7% rate
(2.0% y/y). Real PCE growth was little changed at 2.8% (-0.2% y/y).

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222c.jpg" align="right" border="0" height="265" width="353">Another
surprise in the figures was
that the 3Q contribution to GDP growth from inventories was revised
lower to 0.7 percentage points. Nevertheless, the 3Q addition followed
subtractions of 1.4 and 2.4 percentage points during the prior two
quarters, and was just the second positive contribution to GDP growth
in two years.
Accompanying the GDP figure was a
little-revised estimate that 3Q corporate profits rose 10.8% versus 2Q.
That was the third consecutive quarterly increase and diminished the
y/y change to -6.6% from -25.1% at its worst in 4Q' 08. Lower market
interest rates lifted earnings in the financial sector by more than
one-third (20.5% y/y) and they tripled from year-end '08. Earnings from
the rest of the world increased 7.3% (-18.6% y/y) while the end of the
recession raised domestic nonfinancial profits by an upwardly revised
4.2% (-10.6% y/y) for the second quarterly increase.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222d.jpg" align="right" border="0" height="265" width="353">Deterioration
in the foreign trade deficit subtracted an unrevised 0.8 percentage
points from 3Q GDP growth following an advance estimate of a&nbsp;
0.5% subtraction. Imports grew 21.3% (-14.0% y/y) and the gain in
exports also was little-revised at 17.8% (-10.7% y/y).
The gain in the GDP price deflator was lowered slightly
to 0.4%. The PCE price index was ticked lower to 2.6% (-0.7% y/y) and
the rise in the overall domestic final sales price index was brought
down to 1.4% (-1.0% y/y).
 The U.S. National Income &amp; Product
Account data are available in Haver's USECON and
the USNA databases.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM">Chained
2005$, % AR</a></th>
<th scope="col">3Q '09 Final</th>
<th scope="col">3Q '09 Preliminary</th>
<th scope="col">3Q '09 Advance</th>
<th scope="col">2Q '09</th>
<th scope="col">1Q '09</th>
<th scope="col">2Q Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>2.2</td>
<td>2.4</td>
<td>3.5</td>
<td>-0.7</td>
<td>-6.4</td>
<td>-2.6</td>
<td>0.4</td>
<td>2.1</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Inventory
Effect</td>
<td>0.7</td>
<td>0.9</td>
<td>0.9</td>
<td>-1.4</td>
<td>-2.4</td>
<td>-0.9</td>
<td>-0.4</td>
<td>-0.4</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Final Sales</td>
<td>1.5</td>
<td>1.9</td>
<td>2.6</td>
<td>0.7</td>
<td>-4.1</td>
<td>-1.7</td>
<td>0.8</td>
<td>2.5</td>
<td>2.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Foreign
Trade Effect</td>
<td>-0.8</td>
<td>-0.8</td>
<td>-0.5</td>
<td>1.7</td>
<td>2.6</td>
<td>0.8</td>
<td>-1.2</td>
<td>0.8</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Final Demand</td>
<td>2.3</td>
<td>2.7</td>
<td>3.0</td>
<td>-0.9</td>
<td>-6.4</td>
<td>-2.5</td>
<td>-0.4</td>
<td>1.7</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">Chained GDP Price Index</td>
<td>0.4</td>
<td>0.5</td>
<td>0.8</td>
<td>-0.0</td>
<td>1.9</td>
<td>0.6</td>
<td>2.1</td>
<td>2.9</td>
<td>3.3</td>
</tr>
</tbody>
</table>

 U.S. Existing Home Sales Improve
Further To Highest Since 2007 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 22, 2009
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222e.jpg" align="right" border="0" height="265" width="353">The
front-end of the economy is improving markedly. The National
Association of Realtors reported that November sales of
existing homes again rose sharply to the highest level since
February 2007. The 7.4% m/m increase to 6.540M units (SAAR) followed a
little-revised 9.9% rise during October. The latest was the fourth
strong gain in five months and it raised sales 45.7% from the January
low. The gain in November home sales greatly exceeded Consensus
expectations for a rise to 6.25M. 
 Total sales include sales of condos
and co-ops. Sales of existing single-family homes alone increased a
sharp 8.5% to 5.770M (42.1% y/y) last month and were up 42.5% from the
January low. (These data have a longer history than the total sales
series). Sales of condos and co-ops were unchanged m/m and were up by
60.1% from last November.
 Sales have been helped by a
recently extended tax credit for first-time home buyers. The credit of
up to $8,000 now runs though early next year. The full details of the
home-buyer tax credit can be found <a href="http://www.federalhousingtaxcredit.com/2009/faq.php">here</a>.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222f.jpg" align="right" border="0" height="265" width="353">The median
price of all existing homes rose
slightly to $172,600 after
four consecutive months of decline. Nevertheless, the y/y
decline&nbsp; moderated to 4.3% from its worst of -17.5% as of
January and prices have risen 4.7% from the low. The median price for a
single-family home alone was little-changed at $171,900 (-4.4% y/y).
Price weakness has sharply raised home affordability; by 7.2% since
July and by roughly two-thirds from the 2006 low.
 The number of unsold
homes (single-family &amp; co-ops) for sale fell 1.3% (-15.5% y/y)
during November and to the lowest level since December 2006. At the
current sales rate there was a 6.5 months' supply of homes on the
market which was the lowest since December 2006. The latest figure was
down from a high of 11.3 months during April of last year. For
single-family homes, the inventory fell to a 6.2 month's supply, also
the lowest since December 2006.
The data on existing home
sales, prices and affordability can be found in Haver's USECON
database. The regional price, affordability and inventory data is
available in the REALTOR database.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Existing
Home Sales (Thous, SAAR)</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Nov. Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>6,540</td>
<td>6,090</td>
<td>5,540</td>
<td>44.1%</td>
<td>4,893</td>
<td>5,674</td>
<td>6,516</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>1,130</td>
<td>1,060</td>
<td>950</td>
<td>52.7</td>
<td>845</td>
<td>1,010</td>
<td>1,093</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,550</td>
<td>1,430</td>
<td>1,250</td>
<td>53.5</td>
<td>1,130</td>
<td>1,331</td>
<td>1,494</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>2,390</td>
<td>2,280</td>
<td>2,040</td>
<td>44.8</td>
<td>1,860</td>
<td>2,243</td>
<td>2,577</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,460</td>
<td>1,320</td>
<td>1,290</td>
<td>28.1</td>
<td>1,064</td>
<td>1,095</td>
<td>1,357</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>5,770</td>
<td>5,320</td>
<td>4,860</td>
<td>42.1</td>
<td>4,341</td>
<td>4,960</td>
<td>5,712</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $
(NSA)</td>
<td>172,600</td>
<td>172,200</td>
<td>176,000</td>
<td>-4.3</td>
<td>197,233</td>
<td>216,633</td>
<td>222,042</td>
</tr>
</tbody>
</table>
FHFA Home Price Index Improves
Slightly M/M But Greatly Y/Y 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 22, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222g.jpg" align="right" border="0" height="265" width="353">
Improvement in housing prices continued this fall according
the U.S. House Price Index from the Federal Housing and Finance Agency
(FHFA). The Purchase Only Index for October rose 0.6% and reversed its
September. Nevertheless, the year-to-year decline in the nationwide
average of home prices eased to -1.9% from its worst reading of -8.8%
last November. Since their peak in early-2007 home prices nationwide
have fallen 10.7%. The FHFA uses data provided by Fannie Mae and
Freddie Mac and is not value-weighted.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222h.jpg" align="right" border="0" height="265" width="353">
The HPI is calculated using a repeat sales index. That means
that the HPI measures changes in the price of the same property over
time but does not measure changes in property types over time. So if,
for example, the price of a larger, new home was not growing very
rapidly, but the number of people transitioning from smaller homes to
larger homes greatly increased, median house prices would go up (people
buying more expensive houses) much more than the HPI. In this way, the
HPI is a better measure of how any particular home is appreciating
while the median house price is a better measure of what the typical
home buyer is paying.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222i.jpg" align="right" border="0" height="265" width="353">
Notable monthly gains in home prices during October were
logged in the Pacific, Middle Atlantic and the East South Central
regions of the country and the y/y declines have moderated
significantly. In the populous East North Central region prices slipped
another 0.6% during October and they were flat year-to-date. Prices
also fell sharply in the South Atlantic region to the lowest level
since 2004.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222j.jpg" align="right" border="0" height="265" width="353">


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">FHFA
U.S. House Price Index Purchase Only (%)</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.6</td>
<td>-0.4</td>
<td>-1.9</td>
<td>-5.8</td>
<td>1.3</td>
<td>6.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New England</td>
<td>0.0</td>
<td>0.3</td>
<td>-1.8</td>
<td>-4.6</td>
<td>-1.7</td>
<td>1.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Middle
Atlantic</td>
<td>1.8</td>
<td>-1.5</td>
<td>-1.6</td>
<td>-2.3</td>
<td>1.9</td>
<td>6.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; East North
Central</td>
<td>-0.6</td>
<td>-0.7</td>
<td>-1.9</td>
<td>-4.4</td>
<td>-1.3</td>
<td>1.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West North
Central</td>
<td>0.2</td>
<td>0.0</td>
<td>-0.7</td>
<td>-2.8</td>
<td>1.0</td>
<td>3.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South
Atlantic</td>
<td>-1.1</td>
<td>0.2</td>
<td>-4.1</td>
<td>-7.2</td>
<td>1.3</td>
<td>7.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; East South
Central</td>
<td>1.6</td>
<td>-1.5</td>
<td>-0.4</td>
<td>-1.4</td>
<td>3.8</td>
<td>7.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West South
Central</td>
<td>0.5</td>
<td>-0.3</td>
<td>0.0</td>
<td>0.6</td>
<td>4.7</td>
<td>7.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mountain</td>
<td>0.8</td>
<td>-1.4</td>
<td>-7.5</td>
<td>-6.1</td>
<td>3.9</td>
<td>10.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Pacific</td>
<td>3.7</td>
<td>-0.9</td>
<td>-0.3</td>
<td>-17.3</td>
<td>0.1</td>
<td>9.8</td>
</tr>
</tbody>
</table>
 German Consumer Climate Cooling
Slightly 
by <a href="/comment/Curley.html">LouiseCurley</a>
December 22, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091222k.jpg" align="left" border="0" height="265" width="353">
According to the latest GfK* survey, the German Consumer
Climate is cooling, not that it was recently especially warm. Based on
consumers' appraisals of the outlooks for the economy and their
personal situation and their willingness to spend in the current month,
GfK forecasts the Consumer Climate in the month ahead. Currently, they
are forecasting a decline in the Consumer Climate Indicator to 3.3% in
January. This is the third decline in the indicator from the 4.2%
reached in October, 2009. Since it began in January, 2002, the
indicator has been within a fairly narrow range, from a high of 9.1%
recorded in November and December of 2006 to a low of -3.5%, recorded
in March, 2003.
The balance of opinion of German Consumers on Economic
Expectations improved from -1.7% in November to 0.9% in December, but
was still well below the 8.7% of October. The balance of opinion on
Income Expectations more than doubled from 6.2% in November to 15.0% in
December. However, the balance of opinion on the Consumption and Buying
Propensity declined significantly from 26.3% in November to 21.1% in
December and is now well below the recent peak of 36.5% in September.
It appears that the decline in the balance of opinion on the
Consumption and Buying Propensity is the major cause of the decline in
the Consumer Climate.
The component parts of the Climate Indicator have shown much
greater variation than the over all indicator. In contrast to the
narrow range of the Consumer Climate indicator, cited above, the
balance of opinion on Economic Expectations has ranged from a high of
69.5% in May, 2007 to a low of -32/9 in January, 2009. The balance of
opinion for Income Expectations has ranged from 33.6% in May 2007 to
-24.5% in November, 2002 and for Consumption and Buying Propensity,
from a high of 64.4% in October 2006. to a low of -55.4% in November
2002. All four indicators are shown in the attached chart.*GfK
Gesellschaft fur Konsumforschung (Company for Consumer Research)

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">GFK
Consumer Climate Survey&nbsp;</th>
<th scope="col">Jan 10</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct&nbsp; 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09&nbsp;</th>
<th scope="col">Jun 09</th>
<th scope="col">May 09</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Climate (% balance)</td>
<td>3.3</td>
<td>3.6</td>
<td>3.9</td>
<td>4.2</td>
<td>3.8</td>
<td>3.4</td>
<td>3.0</td>
<td>2.7</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Economic Expectations</td>
<td>--</td>
<td>1.7</td>
<td>0.9</td>
<td>8.7</td>
<td>3.4</td>
<td>-7.5</td>
<td>-14.0</td>
<td>-26.6</td>
<td>-28.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Income Expectations</td>
<td>--</td>
<td>15.0</td>
<td>6.2</td>
<td>12.9</td>
<td>16.0</td>
<td>8.8</td>
<td>1.8</td>
<td>-3.3</td>
<td>-9.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumption and
Buying Propensity</td>
<td>--</td>
<td>21.2</td>
<td>26.3</td>
<td>26.1</td>
<td>36.5</td>
<td>31.1</td>
<td>25.1</td>
<td>14.5</td>
<td>12.5</td>
</tr>
</tbody>
</table>
</body></html>

U.S. GDP Revised Downward:Domestic Demand & Inventories Are Shaved

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<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 src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091221g.jpg" align="right" border="0" height="265" width="353">
Japanese balance of trade continues to improve in spite of the
high and rising yen. In November the seasonally adjusted trade balance
was 492.4 billion yen, up from the low point reached in January, 2009
when the balance was a negative 478 billion yen and it is now at the
highest level since April 2008 when the balance was 660 billion yen.
Exports reached a peak of 7,591.4 billion yen in January, 2009
and declined to 3,983.0 in February, 2009. Since then, they have risen
to 4,998.0 billion yen. Imports reached a peak in August, 2008 at 7,
209.l and declined to 4.030.6 billion yen in June, 2009. Imports have
since recovered to 4,506.1 billion yen. The trends of exports, imports
and trade balance are shown in the first chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091221h.jpg" align="right" border="0" height="265" width="353">
Data on trade by area are not seasonally adjusted. As a
result, trends in these data are best shown by the year over year
changes. The year to year changes for Japan's trade with Asia, Western
Europe and the United States are shown in the second chart. The year to
year change in the trade balance with Asia is the most striking. It has
been positive and increasing since September of the year. The year to
year change in the trade balance with Western Europe is still negative,
but the magnitude of the difference, -44.5 billion yen, is greatly
lower than the -246.4 billion yen recorded in August. 2009. The year to
year change in the trade balance with the United States has also
improved and, for the first time in over two years, was positive.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">
JAPAN TRADE IN GOODS</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct 09</th>
<th scope="col">Nov&nbsp; 08</th>
<th scope="col">M/M CHG</th>
<th scope="col">Y/Y CHG </th>
<th scope="col">2008&nbsp;</th>
<th scope="col">2007 </th>
<th scope="col"> 2006 </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Trade Balance (SA bil
yen)</td>
<td>492.4</td>
<td>460.8</td>
<td>368.6</td>
<td>31.6</td>
<td>861.0</td>
<td>2244.5</td>
<td>10854.4</td>
<td>7762.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Exports</td>
<td>4998.9</td>
<td>4765.3</td>
<td>5293.6</td>
<td>233.2</td>
<td>-295.1</td>
<td>80916.2</td>
<td>83856.4</td>
<td>75144.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports</td>
<td>4506.1</td>
<td>4304.6</td>
<td>5662.2</td>
<td>201.6</td>
<td>-1156.1</td>
<td>78671.7</td>
<td>73002.0</td>
<td>67382.0</td>
</tr>
<tr>
<td class="firstcol">Year to Year Change
(bil yen)</td>
<td>Nov 09</td>
<td>Oct 09</td>
<td>Sep 09</td>
<td>Aug 09</td>
<td>Jul 09 </td>
<td>Jun 09&nbsp;</td>
<td>May 09 </td>
<td> Apr 09 </td>
</tr>
<tr class="odd">
<td class="firstcol">Trade Balance with Asia</td>
<td>460.8</td>
<td>372.1</td>
<td>53.1</td>
<td>-303.0</td>
<td>-224.9</td>
<td>-221.1</td>
<td>-298.2</td>
<td>-388.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Trade Balance with Western
Europe</td>
<td>-44.5</td>
<td>-119.6</td>
<td>-194.8</td>
<td>-246.4</td>
<td>-237.3</td>
<td>-182.8</td>
<td>-227.4</td>
<td>-241.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Trade Balance with U.S.A</td>
<td>59.7</td>
<td>-132.4</td>
<td>-155.2</td>
<td>-86.5</td>
<td>-232.8</td>
<td>-129.2</td>
<td>-234.7</td>
<td>-398.8</td>
</tr>
</tbody>
</table>
</body></html>

Japanese balance of trade continues to improve in spite of the high and rising yen. In November the seasonally adjusted trade balance was 492.4 billion yen, up from the low point reached in January, 2009 when the balance was a [...]

Japanese Trade Balance Improves

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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

250430N1.jpg

250430O1.jpg

Real GDP eased 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. It was the first decline since Q1 2022.

Foreign trade subtracted 4.83 percentage points from growth last quarter as imports surged 41.3% (13.4% y/y) ahead of tariffs, which began to come into effect in the first quarter. The rise followed a 1.9% decline in Q4’24. Exports rose 1.8% (3.0% y/y) after easing 0.2% in Q4. Inventories added 2.25 percentage points to growth after subtracting 0.84 percentage point from Q4 growth.

Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1 after rising 3.0% in Q4. Personal consumption expenditures rose 1.8% (3.1% y/y) following a 4.0% gain. Durable goods spending fell 3.4% (+5.3% y/y) after surging 12.4% in Q4. Motor vehicle purchases declined 11.1% (+5.5% y/y) after strengthening 19.7% in Q4. Spending on home furnishings & appliances gained 1.5% (6.1% y/y) following a 5.4% rise. Recreational goods & vehicle outlays rose 2.5% (7.0% y/y) last quarter after a 13.9% Q4 increase.

Nondurable goods outlays rose 2.7% (3.0% y/y) following 3.1% growth in Q4. Apparel spending increased 6.7% (2.5% y/y) following a 5.0% rise. Food & beverage buying gained 2.5% (2.3% y/y) after a 1.8% increase. Gasoline & fuel oil purchases increased 4.6% (3.4% y/y) after falling 2.0% in Q4.

Spending on services increased 2.4% last quarter (2.7% y/y) after a 3.0% gain. Outlays on housing & utilities increased 3.4% (1.8% y/y) after rising 1.1% in Q4. Health care expenditures rose 4.0% (4.8% y/y) following a 4.7% strengthening. Transportation outlays increased 5.3% (4.6% y/y) after a 3.7% rise while recreation spending rose 4.7% (2.8% y/y) following a 4.5% rise. Restaurant & hotel expenditures declined 2.1% (+0.5% y/y) following a 2.8% rise. Financial services expenditures rose 1.9% (2.0% y/y) after a 3.1% Q4 increase.

Business fixed investment increased 9.8% (3.6% y/y) following a 3.0% decline in Q4. Expenditures on structures rose 0.4% (-0.4% y/y) after a 2.9% increase. Expenditures on producers’ durable equipment jumped 22.5% (8.0% y/y) after falling 8.7%.  Outlays on information processing equipment soared 69.3% (18.9% y/y) following a 7.3% decline. Industrial equipment investment fell 1.4% (-0.3% y/y) after easing 0.9%. Intellectual property product spending rose 4.1% (1.8% y/y) following a 0.5% decline. 

Residential structures investment increased 1.3% (-0.1% y/y) in Q1 after a 5.5% Q4 rise.

250430P1.jpg

250430Q1.jpg

Government spending fell 1.5% (+2.4% y/y) after a 3.1% Q4 rise. Federal government expenditures declined 5.1% (+2.9% y/y) after rising 4.0% in Q4. National defense expenditures declined 8.0% (+4.0% y/y) after increasing 4.8% in Q4. State & local government spending rose 0.8% (2.1% y/y) following a 2.5% rise.

The GDP price index rose 3.7% (2.6% y/y) after increasing 2.3% in Q4. It was the largest increase since Q4’22. A 2.4% increase had been expected. The PCE chain price index increased 3.6% (2.5% y/y) following a 2.4% rise. The PCE price index excluding food and energy rose 3.5% (2.8% y/y) after increasing 2.6% in Q4. The business fixed investment price index rose 0.4% (1.8% y/y) after 1.5% rise. The residential price index strengthened 3.9% (3.2% y/y) after a 1.9% rise while the government price index increased 4.7% (2.8% y/y) following a 2.1% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

250430R1.jpg

250430S1.jpg

- Decline in GDP is first in three years.
- Foreign trade subtracts substantially ahead of tariffs.
- Domestic final demand growth weakens.
- Price index strengthens with higher core PCE prices.

U.S. GDP Unexpectedly Declines in Q1’25; Prices Strengthen

Michael J. Moran

250430A.jpg

250430B.jpg

High-side readings on the price indexes for personal consumption expenditures in January and February caused some concern about emerging price pressure, especially with some policies of the Trump administration possibly adding to the upward force. However, March brought notable relief, with the headline price index falling slightly (-0.04%). A marked decline in energy prices was helpful (-2.7%), but core prices also were subdued, increasing less than 0.1%.  Year-over-year changes were still above the Fed’s target of 2%, but only barely so for the headline measure (2.3%). The core index backed away from the reading of 3.0% in February, but the latest reading of 2.7% was in line with observations in the past year, and still uncomfortably above target.

Consumers roused from a winter slumber in March, with nominal outlays increasing 0.7%. With inflation restrained, real outlays also posted a gain of 0.7%. Spending on durable gods stood out, with real outlays advancing 3.2%. Real outlays for both nondurable goods and services rose 0.4%, a solid pace. Signs of life were certainly welcome after an average decline of 0.1% in January and February. The March rebound left growth of 1.8% (annual rate) in the first quarter.

The brisk increase in spending in March was supported by a solid gain in personal income (0.5% in both nominal and real terms). Growth in wage income was firm at 0.5%, while proprietors’ income was robust with a gain of 1.8% (not annualized!). The farm sector led the advance in proprietors’ income, but the nonfarm sector also was strong (0.6%).

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

250430C.jpg

250430D.jpg

- Price pressure eases.
- Spending rebounds after two soft months.

Personal Income, Consumption, and Prices in March

250430F20.jpg

250430G20.jpg

The Pending Home Sales Index, a forward-looking home sales measure based on contract signings, from the National Association of Realtors rose 6.1% to 76.5 (-0.6% y/y) during March after rising a little-revised 2.1% in February. These changes followed a 4.6% January decline.

The rise in March sales occurred as the rate on a 30-year mortgage eased to an average 6.65% from 6.84% in February. This rate was well above a low of 2.68% averaged in December 2020.

Pending home sales were up in most regions of the country. Sales in the Midwest rose 4.9% (1.4% y/y) last month after rising 1.8% in February. Sales in the South increased 9.8% (-0.4% y/y) following a 5.8% February rise. Sales in the West improved 4.8% (-2.0% y/y) after falling 3.0% in February. Sales in the Northeast were off 0.5% (-3.0% y/y) in March after falling 0.9% in February.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Sales rise to highest level in four months.
- Strength is evident throughout most of country.

U.S. Pending Home Sales Surge in March

Sandy Batten

250430F5.jpg

250430G5.jpg

The employment cost index (ECI) for civilian workers, arguably the most accurate measure of labor compensation in the United States, rose 0.9% q/q (3.6% y/y) in Q1, the same quarterly increase as in last year’s Q4, according to the Bureau of Labor Statistics. The quarterly gains have fluctuated between 0.8% and 1.0% for the past six quarters. The Action Economics Forecast Survey had expected a 0.9% q/q increase and a 3.5% y/y gain.

Wages and salaries for civilian workers rose 0.8% q/q (3.5% y/y) in Q1, down from 1.0% q/q in Q4. This tied the Q3 2024 quarterly rise as the smallest increase since Q2 2021. It was also the smallest y/y increase since Q2 2021. Benefits increased by an outsized 1.2% q/q (3.9% y/y) in Q1 versus 0.8% q/q in Q4. This is the largest quarterly gain since Q2 2022. In general, employment cost gains remain above the pace observed prior to the pandemic but are slowing gradually.

Private industry workers’ compensation rose 0.8% q/q (3.4% y/y) in Q1, down from 0.9% q/q (3.6% y/y) in Q4. Wages and salaries for private industry workers increased 0.8% q/q (3.4% y/y) in Q1 versus 0.8% q/q (3.7% y/y) in Q4. The quarterly gain in Q1 tied that in Q3 2024 as the smallest increase since Q4 2020. Benefits for private industry workers jumped 1.2% q/q (3.6% y/y). the largest quarterly gain since Q2 2022. The acceleration in benefits in Q1 was primarily in service-producing industries.

Compensation in private goods-producing industries increased 1.0% q/q (3.2% y/y) in Q1, the largest quarterly gain in five quarters, versus a 0.7% q/q increase in Q4. Compensation in construction jumped 1.3% q/q, its largest quarterly increase since Q2 2022, up from a 0.6% q/q gain in Q4. Manufacturing compensation growth slowed to 0.7% q/q, its slowest quarterly advance since Q4 2020, from 0.8% q/q in Q4. Compensation in private service-producing industries increased 0.8% q/q (3.5% y/y), down slightly from a 0.9% q/q gain in Q4. Compensation in education and health services jumped 1.3% q/q, its largest quarterly gain since Q3 2023. In contrast, compensation in other services edged up 0.1% q/q in Q1, its smallest quarterly advance since before the pandemic.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

250430H5.jpg

250430I5.jpg

- Compensation grew 0.9 q/q in Q1, the same pace as in Q4.
- Wage growth slowed to 0.8% q/q while benefits surged 1.2% q/q, their largest quarterly increase since Q2 2022.

Employment Cost Growth Steady in Q1 2025

Kathleen Stephansen, CBE

250430J4.jpg

250430K4.jpg

The ADP National Employment Report indicated that nonfarm private sector payrolls rose 62,000 (1.4% y/y) during April after increasing 147,000 (1.4% y/y) during March, revised from 155,000. A 124,000 April rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" eased to 4.5% y/y during April, from 4.6% y/y in March and from 4.7% y/y in the prior two months. Manufacturing sector pay grew 4.6% y/y during April, down from 4.8% y/y in March. Construction sector pay was unchanged at 4.7% y/y. Natural resource & mining sector pay grew 4.4% y/y. Financial sector pay rose 5.1% y/y, while education & health services pay rose 4.7% y/y. Leisure & hospitality pay also increased 4.7% y/y. Professional & business service sector pay increased 4.3% y/y as did trade, transportation & utilities pay. Information pay rose 4.1% y/y. Median annual pay for “job changers” rose 6.9% y/y after 6.7% y/y in March.

Small business hiring (less than 50 employees) rose 11,000 (0.6% y/y) after rising 18,000 (0.6% y/y) in March, revised down from 52,000. Employment at medium-sized firms (50-499,000 employees) rose 40,000 (1.1% y/y) after rising 43,000 (1.1% y/y). Large business hiring (500+ employees) rose 12,000 (3.4% y/y) in April, after rising 61,000 (3.6% y/y) in March, revised from 59,000.

Goods-producing employment rose 26,000 (1.3% y/y) in April, after rising 16,000 (1.3% y/y) during March, revised from 24,000. Manufacturing jobs rose 4,000 (-0.2% y/y) after rising 17,000 (-0.3% y/y) in March. The number of construction sector jobs rose 16,000 (3.4% y/y) in April, following a 2,000 (3.6% y/y) March increase, revised from 6,000. Natural resources & mining jobs rose 6,000 (2.8% y/y) in April after falling 3,000 (+1.9% y/y) in March.

The number of service-producing jobs rose 34,000 (1.4% y/y) during April, following a rise of 131,000 (1.4% y/y) in March. Professional & business services employment fell 2,000 (0.6% y/y) after rising 46,000 (0.7% y/y) in the prior month, revised from 57,000. Employment in the financial industry rose 20,000 (2.1% y/y) in April, after rising 38,000 (2.0% y/y) in March. Leisure and hospitality employment increased 27,000 (3.0% y/y), following a 23,000 (2.9% y/y) March increase, revised from 17,000. The number of education & health care jobs fell 23,000 (1.6% y/y) in April, following a 15,000 (1.8% y/y) rise in March, revised from 12,000. Information sector employment fell 8,000 (-0.1% y/y) after a rise of 3,000 (0.2% y/y) in March. The number of jobs in trade, transportation & utilities rose 21,000 (0.4% y/y) in April, after falling 4,000 (+0.4% y/y) in March, revised from a 6,000 fall. Employment in “other” services rose fell 1,000 (+3.2% y/y) following a 10,000 (3.4% y/y) rise in March, revised from 11,000.

By region, employment in the Northeast increased 10,000 (1.9% y/y) in April, following an increase of 95,000 (2.0% y/y) in March, revised from 89,000. Employment in the Midwest rose 42,000 (1.5% y/y) after a gain of 84,000 (1.4% y/y) in March, revised from 81,000. In the South, employment rose 3,000 (1.3% y/y) during April, after rising 10,000 (1.4% y/y) in March, revised from 27,000. In the West, employment rose 9,000 (0.6% y/y) after declining 43,000 (+0.6% y/y), revised from a 41,000 decline in March.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

250430L4.jpg

250430M4.jpg

- Employment increase is modest in both services & factory sectors.
- Wage growth for “job stayers” moderates.
- Small and medium-sized business employment slows.

Economy in Brief: 2009

Jump to: