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/080904i.jpg" width="353">
Labor productivity in the nonfarm business sector rose a revised 4.3% last quarter. The increase was larger than expected growth of 3.4% and it was double the preliminary estimate of a 2.2% increase.
The upward revision was due to a near-doubling of output growth to 3.4% and a slightly larger 0.8% decline in hours worked.
Growth in compensation per hour was little-changed at 3.7% and that about equaled the 1Q increase.
Unit labor cost growth was revised to show a slight 0.5% decline rather than the 1.3% increase estimated earlier. Year-to-year that left costs up just 0.6% from one year earlier.
In the factory sector productivity growth was revised down and it showed a 2.2% decline (+2.4% y/y). Productivity rose 3.4% last year. Unit labor cost growth surged a little-revised 6.2% (1.4% y/y) as compensation rose 3.9% (3.8% y/y).
In the nonfinancial corporate sector, productivity surged 5.6% and the y/y gain rose to 2.3% after a 1.9% increase last year.Compensation in the corporate sector rose 3.7% (3.8% y/y), a gain which left unit labor costs to decline 1.8% (+1.5% 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/@EC/@EC02/@EC02.HTM">Nonfarm Business Sector</a> (SAAR, %)</th>
<th scope="col">2Q &#39;08</th>
<th scope="col">1Q &#39;08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Output per Hour</td>
<td>4.3</td>
<td>2.6</td>
<td>3.4</td>
<td>1.4</td>
<td>1.0</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">Compensation per Hour</td>
<td>3.7</td>
<td>3.8</td>
<td>4.0</td>
<td>4.1</td>
<td>3.8</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>-0.5</td>
<td>1.2</td>
<td>0.6</td>
<td>2.7</td>
<td>2.8</td>
<td>2.2</td>
</tr>
</tbody>
</table>
</body>
</html>

Labor productivity in the nonfarm business sector rose a revised 4.3% last quarter. The increase was larger than expected growth of 3.4% and it was double the preliminary estimate of a 2.2% increase. The upward revision was due to a [...]

U.S. Productivity Growth Revised Up; Unit Labor Costs Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080904f.jpg" width="353">
Initial claims for unemployment insurance rose unexpectedly last week to 444,000 from 429,000 during the prior week. The latest level was the highest in four weeks.
The four-week moving average dipped again w/w to 438,000 (34.7% y/y), still the highest level since near the end of the 2001 recession 2001. During July claims averaged 393,000.
A program to locate people eligible for jobless benefits may have continued to play a role in last week&#39;s elevated level of claims. Congress approved the extra benefits in June.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080904g.jpg" width="353">
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment. Over the longer period of time, the level of claims for jobless insurance has not trended higher with the size of the labor force due to a higher proportion of self-employed workers who are not eligible for benefits.
Continuing claims for unemployment insurance during the latest week ticked up another 6,000 after an upwardly revised 70,000 jump during the prior week. The four-week moving average of continuing claims rose to 3,400,250, the highest level since late-2003.
Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.
The insured rate of unemployment was stable at 2.6%, the highest level since late-2003.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">08/30/08</th>
<th scope="col">08/23/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;444</td>
<td>429</td>
<td>38.7%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,435</td>
<td>32.7%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance rose unexpectedly last week to 444,000 from 429,000 during the prior week. The latest level was the highest in four weeks. The four-week moving average dipped again w/w to 438,000 (34.7% y/y), [...]

U.S. Initial Claims for Jobless Insurance Highest in Four Weeks

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080904d.jpg" width="353">
The Composite Index for the nonmanufacturing sector, from the Institute for Supply Management, again ticked up. For August it rose to 50.6 from an unrevised 49.5 during July. The latest was the highest level since May. Consensus expectations had been for a slightly lower August reading of 49.5.
Beginning with the January 2008 Nonmanufacturing <cite>Report On Business</cite>&reg;, a composite index is now calculated as an indicator of the overall economic condition for the non-manufacturing sector. It is a composite index based on the diffusion indexes for four of the indicators (business activity, new orders, employment and supplier deliveries) with equal weights. The latest report from the ISM can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080904e.jpg" width="353">
The nonmanufacturing business activity sub-index rose to 51.6 from 49.6 in July and the latest level equaled the 2Q average. Since the series&#39; inception in 1997 there has been a 48% correlation between the level of the business activity index for the nonmanufacturing sector and the Q/Q change in real GDP for the services and the construction sectors.
The new orders sub-index also made up the prior month&#39;s decline and rose to 49.7, the highest level since May.
The employment index, conversely, fell m/m to 45.4 and reversed half of its July improvement. Since the series&#39; inception in 1997 there has been a 56% correlation between the level of the ISM nonmanufacturing employment index and the m/m change in payroll employment in the service-producing plus the construction industries.
Pricing power fell sharply to 72.9 which was its lowest level since May. Since inception ten years ago, there has been a 60% correlation between the price index and the q/q change in the GDP services chain price index.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The nonmanufacturing survey dates back to July 1997.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">August &#39;07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>50.6</td>
<td>49.5</td>
<td>52.8</td>
<td>53.5</td>
<td>55.7</td>
<td>58.0</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>72.9</td>
<td>80.8</td>
<td>60.1</td>
<td>63.8</td>
<td>65.3</td>
<td>68.0</td>
</tr>
</tbody>
</table>


</html>

The Composite Index for the nonmanufacturing sector, from the Institute for Supply Management, again ticked up. For August it rose to 50.6 from an unrevised 49.5 during July. The latest was the highest level since May. Consensus [...]

U.S. ISM Nonmanufacturing Index Up, Prices Down

<!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/080904c.jpg" align="left" border="0" height="265" width="353">
The ADP National Employment Report, from the payroll
processor, indicated that August private nonfarm payrolls fell 33,000
after a downwardly revised uptick of 1,000 during July. The decline
about matched expectations for an August drop of 30,000.
The U.S. Bureau of Labor Statistics will report on August
payroll employment tomorrow. Last
month, the 1,000 worker rise in ADP's measure of private nonfarm
payrolls was accompanied by a 76,000 worker decline in the BLS measure
of private sector payrolls.
According to ADP and Macro Advisers, the correlation between
the monthly percentage change in the ADP estimate and that in the BLS
data is 0.90.
Goods producing payrolls fell by 78,000 (-2.6% y/y) and the
monthly declines were spread fairly evenly between large (-4.6% y/y),
medium (-2.8% y/y) and small (-1.3% y/y) payrolls.
Employment in the service producing industry rose by 45,000
(1.1% y/y). Small payrolls rose 36,000 (1.6% y/y) while medium sized
payrolls inched up 8,000 (1.1% y/y). Large service producing payrolls
ticked up by an even smaller 1,000 (-0.3% y/y).
ADP compiled the estimate from its database of individual
companies' payroll information. Macroeconomic Advisers, LLC, the St.
Louis economic consulting firm, developed the methodology for
transforming the raw data into an economic indicator.
The ADP National Employment Report data is maintained in
Haver's 
USECON database;
historical data go back to December 2000. The figures in this report
cover only private sector jobs and exclude employment in the public
sector, which rose an average 11,083 during the last twelve months.
The full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/pdf/final_report_august_08.pdf" title="blocked::http://www.adpemploymentreport.com/PDF/FINAL_Report_june_09.pdf">here</a>,
and the ADP methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf" title="blocked::http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf">here</a>.

The Fed's latest Beige Book can be found <a href="http://www.federalreserve.gov/fomc/beigebook/2008/20080903/fullreport20080903.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM">LAXEPA@USECON</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Nonfarm Private Payroll
Employment (m/m Chg.)</td>
<td>-33,000</td>
<td>1,000</td>
<td>0.4%</td>
<td>1.1%</td>
<td>1.7%</td>
<td>1.8%</td>
</tr>
</tbody>
</table>
</body></html>

The ADP National Employment Report, from the payroll processor, indicated that August private nonfarm payrolls fell 33,000 after a downwardly revised uptick of 1,000 during July. The decline about matched expectations for an August [...]

ADP Report: Payroll Employment Fell 33,000 in August

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080904a.jpg" width="353">
U.S. sales of light vehicles in August recovered their decline during July and rose 9.3%, according to the Autodata Corporation. The latest sales level of 13.72M units, nevertheless, left sales for the year so far averaging 14.32M. That&#39;s down 11.6% from the 16.20M averaged during the first eight months of last year. The level of August vehicle sales was higher than Consensus expectations for sales of 13.0M.
Sales of domestically made light vehicles recovered the declines of the prior two months. They rose 15.2% to 10.30M. Nevertheless, sales remained down 13.7% YTD.
Aggressive discounting lifted sales of domestically made light trucks to their highest level since March. The 28.1% jump from July still left sales down 20.2% YTD.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080904b.jpg" width="353">
Sales of U.S. made cars rose just 1.5% after two months of sharp decline. Nevertheless and continuing drivers&#39; shift to purchases of relatively fuel efficient vehicles, car sales were down only 4.5% YTD.
Sales of imported light vehicles showed further the effect of weakness in consumer spending on durable goods. They fell by 5.3% to 3.42 million units which was their lowest level since early 2006.
Sales of imported autos repeated their July drop and declined by 8.4% to 2.33M units. Year-to-date sales, however, were flat with the first eight months of 2007.
Imported light truck sales ticked up just 1.8% (-22.0% y/y) after four months of sharp decline. They too have felt the effect of higher fuel costs and were down 14.2% YTD.
Import&#39;s share of the U.S. light vehicle market fell to 24.9%, the lowest since this past February. (Imported vehicles are those produced outside the U.S. and does not include vehicles with the nameplate of a foreign manufacturer produced within the U.S.).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil. Units)</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>13.72</td>
<td>12.55</td>
<td>-15.8%</td>
<td>16.17</td>
<td>16.54</td>
<td>16.96</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>6.74</td>
<td>6.88</td>
<td>-9.1</td>
<td>7.58</td>
<td>7.77</td>
<td>7.65</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Domestic</td>
<td>4.41</td>
<td>4.35</td>
<td>-12.7</td>
<td>5.07</td>
<td>5.31</td>
<td>5.40</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imported</td>
<td>2.33</td>
<td>2.54</td>
<td>-1.4</td>
<td>2.51</td>
<td>2.45</td>
<td>2.25</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>6.98</td>
<td>5.67</td>
<td>-21.5</td>
<td>8.60</td>
<td>8.78</td>
<td>9.32</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Domestic</td>
<td>5.89</td>
<td>4.59</td>
<td>-21.4</td>
<td>7.12</td>
<td>7.42</td>
<td>8.12</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imported</td>
<td>1.09</td>
<td>1.07</td>
<td>-22.0</td>
<td>1.48</td>
<td>1.37</td>
<td>1.20</td>
</tr>
</tbody>
</table>


</html>

U.S. sales of light vehicles in August recovered their decline during July and rose 9.3%, according to the Autodata Corporation. The latest sales level of 13.72M units, nevertheless, left sales for the year so far averaging 14.32M. [...]

U.S. August Light Vehicle Sales Recovered Modestly

Robert Brusca

<!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/080903h.jpg" align="left" border="0" height="265" width="353">
Euro Area 15 retail sales are off by 0.4% in July their second
straight month of declining. Food and nonfood sales each are off for
two months running as well. In the current quarter to date sales
volumes overall are falling at a 4.8% annual rate. For food alone the
new in-quarter drop is at a pace of -7.5% while nonfood sales are
contracting at a -2.3% annual rate.
The detail on sales lags the headline availability by one
month. Since May was a bit of an &#8216;up month&#8217; even the declines in June
do not produce much of a trend of weakness for the area by detailed
group. But by July the back-to-back declines in overall sales should
make the withering trends by retail sales component more apparent.
German sales volume trends ex autos are clearly pointing lower as are
even the lagged Italian trends. For the UK, however, sales trends are
still holding up as of July. May and June brought horrific sales swings
(offsetting) to the UK and will make trend reading a bit harder to make
sense of in the coming months.
The consumer is an important part of the Euro Area economy and
now retail sales are off sharply. Private consumption is 56% of Euro
Area GDP. But capital
spending at 23% is another huge chunk of it. Euro exports and imports
are each about 45% of GDP while in the US the comparable ratio is about
15%. So while the consumer is important for Europe at 56% of GDP the US
ratio of 70% makes the consumer relatively more of a force there.
Still, having such weakness for 56% of your economy is not a good sign.
And Europe is showing slowing across private consumption as well as
capital formation. Net exports have been gradually supplying less and
less of a boost to GDP. Losing
the consumer to the forces of negative growth will be a blow to the
European economies.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"> Euro
Area 15 Retail Sales Volume</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jul-08</td>
<td>Jun-08</td>
<td>May-08</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Euro Area 15 Total</td>
<td>-0.4%</td>
<td>-0.8%</td>
<td>0.6%</td>
<td>-2.9%</td>
<td>-4.4%</td>
<td>-3.0%</td>
</tr>
<tr>
<td class="firstcol">Food</td>
<td>-0.8%</td>
<td>-0.7%</td>
<td>0.0%</td>
<td>-5.9%</td>
<td>-4.6%</td>
<td>-3.6%</td>
</tr>
<tr>
<td class="firstcol">NonFood</td>
<td>-0.1%</td>
<td>-0.9%</td>
<td>1.0%</td>
<td>-0.1%</td>
<td>-3.9%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">Textiles</td>
<td>#N/A</td>
<td>-2.6%</td>
<td>6.1%</td>
<td>11.3%</td>
<td>-0.7%</td>
<td>-2.7%</td>
</tr>
<tr>
<td class="firstcol">Books news, etc</td>
<td>#N/A</td>
<td>-1.0%</td>
<td>-0.2%</td>
<td>0.6%</td>
<td>-0.1%</td>
<td>-1.6%</td>
</tr>
<tr>
<td class="firstcol">Pharmaceutical</td>
<td>#N/A</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>2.9%</td>
<td>1.7%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">Other NonSpec</td>
<td>#N/A</td>
<td>-1.7%</td>
<td>0.6%</td>
<td>-1.0%</td>
<td>-1.8%</td>
<td>-2.8%</td>
</tr>
<tr>
<td class="firstcol">Mail Order</td>
<td>#N/A</td>
<td>-1.2%</td>
<td>-1.0%</td>
<td>1.1%</td>
<td>-5.3%</td>
<td>-3.4%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Country
detail;Volume</td>
</tr>
<tr>
<td class="firstcol">Germany:VolxAuto</td>
<td>-1.5%</td>
<td>-1.4%</td>
<td>1.3%</td>
<td>-6.2%</td>
<td>-5.4%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">Italy(Total; Value)</td>
<td>#N/A</td>
<td>-0.5%</td>
<td>0.2%</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>-1.0%</td>
</tr>
<tr>
<td class="firstcol">UK(EU):Vol</td>
<td>0.8%</td>
<td>-4.3%</td>
<td>4.0%</td>
<td>1.2%</td>
<td>0.4%</td>
<td>2.0%</td>
</tr>
<tr class="grey2">
<td colspan="7" class="firstcol">Shaded areas
calculated on a
one-month lag due to lagging data.</td>
</tr>
</tbody>
</table>
</body></html>

Euro Area 15 retail sales are off by 0.4% in July their second straight month of declining. Food and nonfood sales each are off for two months running as well. In the current quarter to date sales volumes overall are falling at a 4.8% [...]

Retail Sales Trend are Slipping Everywhere in the Euro Area

<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/080903g.jpg" width="353">
Factory inventories rose 0.5% during July, lifted by a 3.5% surge in inventories of nondefense aircraft &amp; parts. Less the transportation sector altogether the value of inventories rose 0.4%.
At petroleum refineries, inventories fell 1.9% (+37.1% y/y) after a revised 10.0% jump during June. The value still was up by more than one-half since December as prices have surged. Less petroleum, factory inventories rose 0.7% (5.8% y/y) during July after an upwardly revised 0.6% June increase. Inventories in the machinery sector rose 0.5% (5.8% y/y) while inventories of computers &amp; electronics rose 0.4% (7.2 y/y).
Factory shipments jumped again last month. The 2.1% spike was due to a 3.8% (-10.5% y/y) surge in shipments of transportation equipment and a 2.0% (13.3% y/y) rise in apparel shipments.
Total factory orders surged 1.3% during July after the upwardly revised 2.1% June jump. Expectations had been for a 1.0% rise. The strength reflected stronger petroleum orders (which equal shipments). They rose 0.6% (48.8% y/y). Less petroleum, orders rose 1.4% (0.3% y/y). Durable orders repeated their June strength and rose 1.3% which was the same as reported in the advance report.
Overall unfilled orders rose 0.7%, a rate of increase that was down from the 1.0% June rise. Order backlogs for electronic computers fell slightly but order backlogs of machinery surged (23.2% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Factory Survey</a> (NAICS, %)</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>0.5</td>
<td>1.2</td>
<td>7.6</td>
<td>3.7</td>
<td>6.4</td>
<td>8.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>0.4</td>
<td>1.3</td>
<td>6.6</td>
<td>2.7</td>
<td>7.9</td>
<td>8.1</td>
</tr>
<tr class="odd">
<td class="firstcol">New Orders</td>
<td>1.3</td>
<td>2.1</td>
<td>5.3</td>
<td>1.9</td>
<td>6.2</td>
<td>11.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>1.0</td>
<td>2.7</td>
<td>10.6</td>
<td>1.2</td>
<td>7.4</td>
<td>11.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>2.1</td>
<td>1.9</td>
<td>7.8</td>
<td>1.2</td>
<td>5.9</td>
<td>10.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Excluding Transportation</td>
<td>1.8</td>
<td>1.9</td>
<td>10.8</td>
<td>1.5</td>
<td>6.7</td>
<td>11.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Unfilled Orders</td>
<td>0.7</td>
<td>1.0</td>
<td>13.7</td>
<td>17.1</td>
<td>15.3</td>
<td>15.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Transportation</td>
<td>1.0</td>
<td>1.4</td>
<td>10.0</td>
<td>8.2</td>
<td>16.0</td>
<td>9.2</td>
</tr>
</tbody>
</table>
</body>
</html>

Factory inventories rose 0.5% during July, lifted by a 3.5% surge in inventories of nondefense aircraft & parts. Less the transportation sector altogether the value of inventories rose 0.4%. At petroleum refineries, inventories fell [...]

U.S. Factory Inventories Rose Again

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

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

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

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

Even with expected tariff-induced increases in inflation, BCFF forecasters look for a more aggressive round of monetary easing

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

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

250801A4.jpg

250801D4.jpg

Nonfarm payrolls increased 73,000 during July after rising 14,000 in June, revised from 147,000, and 19,000 in May, revised from 144,000. Expectations had been for a 102,000 rise in the Action Economics Forecast Survey. The three-month average change in payrolls of 35,000 compared to 64,000 in June. The Bureau of Labor Statistics indicates that monthly revisions result from additional reports received from businesses and government agencies since the last published estimates.

Average hourly earnings rose an expected 0.3% during July after unrevised gains of 0.2% and 0.4% in June & May. Earnings growth of 3.9% y/y is little changed over twelve months, but has been trending lower from its 5.9% high in March 2022.

The unemployment rate, measured in the household survey, edged up m/m to an expected 4.2% from 4.1% and compared to 4.2% in the previous three months. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, rose to 7.9% last month from 7.7% In June. It was 6.6% in April 2023.

In the **establishment survey**, private-sector employment in July rose 83,000, factory sector jobs declined 11,000, off for the third straight month. Construction sector employment increased 2,000, after rising 3,000 in June. The number of mining & logging industry jobs declined 4,000 after falling in both of the prior two months. 

Private service sector employment increased 96,000 July after improving 16,000 in June. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 79,000 last month, following a 52,000 increase in June. The number of trade, transportation & utilities jobs gained 11,000, following a 22,000 decline and financial activities employment improved 15,000 after a 2,000 drop, while leisure & hospitality employment rose just 5,000 after a 4,000 gain. The number of professional & business services jobs fell 14,000, down for the third straight month.  Information sector employment fell 2,000, after holding steady in June.

Government sector payrolls declined 10,000 last month and revered June’s 11,000 rise. Federal government employment weakened 12,000 and has fallen for six straight months. Local government employment eased 3,000 after rising 10,000 in June while state government payrolls rose 5,000 after increasing 10,000.

Private-sector average hourly earnings rose 0.3% (3.9% y/y) in July. Earnings in the goods-producing sector edged up 0.1% (3.6% y/y). In construction, earnings rose 0.2% (3.7% y/y) following a 0.4% rise, but factory sector earnings eased 0.1% (+3.6% y/y). In the service sector, earnings rose 0.4% (4.0% y/y) in July after increasing 0.2% in June.

250801C4.jpg

The length of the average workweek rose to 34.3 hours in July from 34.2 hours in June. The workweek in the goods-producing sector lengthened to 39.9 hours from 39.7 hours. The construction sector average workweek rose to 39.1 hours from 38.9 while the factory sector workweek held steady at 40.1 hours. The average workweek in the private service sector edged up to 33.2 hours from 33.1 hours.

In the **household survey**, the unemployment rate increased to 4.2% in July after falling to 4.1% as employment fell 260,000 after rising 93,000 in June and the size of the labor force declined 38,000, off for the third straight month. The labor force participation rate eased to 62.2% last month from 62.3% and remained below the high of 63.3% early in 2020. The rate for teenagers declined to 35.0%, after plunging to 35.1%. For workers aged 20-24, the rate declined to 70.9%. For workers aged 25-54, the participation rate eased to 83.4%. For individuals 55 and over, the rate improved slightly to 38.1% but remained near a 20-year low of 38.0% in June.

The employment/population ratio for all workers slipped to 59.6% last month. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic. For men, the rate fell to 64.7% in July from 64.9% and for women, the rate eased to 54.7% from 54.8% in June.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

250801X4.jpg

250801F4.jpg

- Recent job growth reduced by fewer factory & government jobs.
- Earnings gain remains steady y/y.
- Jobless rate reverses June decline.

U.S. Employment Report Shows Weakness in July, While Revisions Reduce Earlier Gains; Jobless Rate Picks Up

250801F20.jpg

250801G20.jpg

U.S. light vehicle sales increased 7.6% (6.0% y/y) to 16.87 million units (SAAR) in July after falling 0.3% to 15.68 million units in June. The gain followed three straight months of decline. The improvement in July vehicle sales accompanied a 1.7% y/y rise in real disposable income through June, which compared to 2.1% growth last year.

Increases in sales were broad-based last month. Light truck sales rose 7.7% (10.0% y/y) in July to 14.02 million units, after easing 0.2% to 13.02 million in June and weakening 8.7% in May to 13.04 million. Purchases of domestically-made light trucks improved 7.1% (12.0% y/y) to 10.79 million units, after falling 1.0% in June to 10.07 million. Sales of imported light trucks rose 9.8% (3.8% y/y) to 3.24 million units, following a 3.9% rise in June.

Trucks’ record 83.1% share of the light vehicle market last month compared to 83.0% in June and 80.1% in July of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales rose 6.4% last month, down 9.8% y/y, to 2.84 million units (SAAR) following a 0.4% June decline. Purchases of domestically-produced cars rebounded 10.1% (-6.4% y/y) last month to 2.18 million units, after declining 2.5% in June. Sales of imported autos fell 2.9% (-20.5% y/y) to 0.66 million units, after a 4.6% June gain.

Imports' 23.1% share of the U.S. light vehicle market edged down from 23.2% in June. These compare to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market fell to 23.2% last month and compared to 26.4% in July of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market rose to 23.1% last month after rising to 22.7% in June.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

250801H20.jpg

250801I20.jpg

- Both light truck and auto sales recover.
- Domestic and imports each increase.
- Imports' market share steadies.

U.S. Light Vehicle Sales Rebound in July

Winnie Tapasanun

250801A.jpg

250801B.jpg

The ISM U.S. manufacturing PMI fell to 48.0 in July from 49.0 in June and 48.5 in May, according to the Institute for Supply Management. The July manufacturing PMI, below the 50 expansion-contraction dividing line, indicated that the U.S. manufacturing sector contracted for the fifth consecutive month and to the lowest level since October 2024. The July reading, while slightly higher than a low of 46.9 in October and 47.0 in July of last year, was below its recent high of 50.9 in January and a peak of 63.8 in March 2021. A reading of 49.5 for July had been expected in the Action Economics Forecast Survey.

The production index rose to 51.4 in July after rising to 50.3 in June, suggesting production expanded for the second successive month and to the highest level since January; it was up from its most recent low of 44.0 in April but slightly below a high of 53.7 in March 2024. Twenty percent (NSA) of respondents reported higher production in July while 19.2% reported lower.

The new orders index increased to 47.1 in July after falling to 46.4 in June, indicating new orders contracted for the sixth straight month but at a slightly less severe pace. The Index, while below its recent high of 55.1 in January, was up from a low of 42.7 in January 2023. Nearly nineteen percent (NSA) of respondents reported higher new orders in July while 25.9% reported declines. The inventories index, however, fell to 48.9 in July after rising to 49.2 in June, showing inventories contracted for the third consecutive month. The index was down from its recent high of 53.4 in March and a high of 56.5 in July 2022. Meanwhile, the supplier deliveries index fell to 49.3 in July from 54.2 in June, indicating faster delivery performance following seven straight months in slower territory. An 8.7% (NSA) of respondents reported slower delivery speeds in July while an increased 10.2% reported faster speeds.

On the labor front, the employment index fell to 43.4 in July after falling to 45.0 in June, indicating employment contracted for the sixth straight month and to the lowest level since June 2020. The index was down from its recent high of 50.3 in January and a high of 56.5 in March 2022. A 12.6% (NSA) of respondents reported higher employment in July while an increased 25.0% reported less hiring.

On the pricing front, the prices paid index declined to 64.8 (NSA) in July after rising to 69.7 in June, indicating raw materials prices rose for the 10th straight month but at the slowest rising rate since February. The July index remained well above a low of 39.4 in December 2022 but meaningfully below a high of 87.1 in March 2022 and a peak of 92.1 in June 2021. A decreased 35.4% (NSA) of respondents reported higher prices in July while 5.8% reported price declines.

In other ISM series not included in the composite index, the new export orders index slipped to 46.1 in July after increasing to 46.3 in June, indicating new export orders contracted for the fifth straight month. It was down from its recent high of 52.4 in January and a high of 57.1 in February 2022. The imports index edged up to 47.6 in July after rising to 47.4 in June, remaining at a contraction level for the fourth consecutive month; it was down from its recent high of 52.6 in February and a high of 55.4 in February 2022. The order backlog index increased to 46.8 (NSA) in July after declining to 44.3 in June, indicating falling backlog levels since October 2022. It was up from a low of 37.5 in May 2023 but down from a peak of 70.6 in May 2021.

The ISM figures are based on responses from over 400 purchasing and supply executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These data are diffusion indexes where a reading above 50 indicates expansion; below 50 indicates contraction. The ISM Manufacturing PMI is a composite index based on the diffusion indexes of five of the indexes (seasonally adjusted) with equal weights: New Orders, Production, Employment, Supplier Deliveries, and Inventories. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

250801C.jpg

250801D.jpg

- 48.0 in July vs. 49.0 in June; the fifth consecutive month of contraction.
- Production (51.4) expands to a six-month high.
- New orders (47.1) contract for the sixth successive month.
- Employment (43.4) contracts to the lowest level since June ’20.
- Prices Index (64.8) indicates prices rise for the 10th straight month; exports & imports contracting.

U.S. ISM Manufacturing PMI Contracts in July to a Nine-Month Low

Michael J. Moran

250801N40.jpg

250801O40.jpg

Total construction activity fell 0.4 percent in June, continuing a soft trend that began in the middle of last year. After peaking in May 2024, total outlays have declined 3.6%. The retreat was modest at first, but the softness began to intensify last fall. Activity has now declined in nine of the past ten months, with the drop over this span totaling 3.1%. The private sector accounts for nearly all of the softness, with both residential and nonresidential contributing; public construction has continued to advance, although gains in recent months have been modest.

Private residential construction fell 0.7% in June, marking the 12th decline in the past 13 months and leaving activity 7.3% below the peak in May 2024. Hints of softness in private residential construction first appeared in mid-2023, when multi-family construction first stalled and then moved notably downward throughout 2024. Following the swoon in 2024, multi-family activity has stabilized in recent months.

However, single family building has taken the lead in pulling activity lower, declining for four consecutive months with pronounced retreats in the past three (average of -1.8%). Prospects for single-family construction do not seem bright, as the ups and downs in single-family housing starts have left little net growth in the past year; the past four months have been especially soft.

Improvements to existing structures contributed to weakness with sharp declines early in the year, but this area has posted small gains in the past three months. Home improvements (i.e. additions and renovations) should not be ignored in assessing residential construction, as they typically represent 35 to 40 percent of private activity.

Private nonresidential construction fell 0.3 percent in June, reinforcing the downward drift that has been in place since the start of 2024. This sector has posted 11 declines in the past 18 months. While activity grew in several months over this span, most of the increases were minuscule. The net effect of the ups and downs was a drop of 6.6% (annual rate of 4.4%). Total nonresidential activity has several components, and some have advanced in the past year or so, but none has posted an impressive performance. Two areas, lodging (hotel, motels, resorts) and commercial (retail and wholesale), have been notably soft.

250801P40.jpg

The public sector has started to sputter after two years of strong activity. Building was vigorous in 2023, growing 21.8% (December to December), and activity advanced an additional 2.4% in 2024. Growth so far this year has been modest on balance. Most months have registered gains, but they offset declines in the closing months of last year by only a small margin. Activity in June was 0.1% above the reading in October (the high point in 2024). Both state and Local governments and the federal sector have posted similar performances: robust in 2023, moderate in 2024, and hesitating this year.

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

- Private building, both residential and nonresidential, drifting lower.
- Public construction hesitating after two strong years.

U.S. Construction: Sluggish in June

250801E.jpg

Manufacturing PMIs in the S&P framework were mixed in July. However, the median reading edged slightly higher rising to 48.6 in July from 48.5 in June. But both of these are significantly weaker than the 49.1 reading in May. Manufacturing continues to post PMI readings that are below 50 indicating sector contraction on a fairly broad basis in July among the 17 reporting countries in the table plus the euro area. Only India and Vietnam reported PMI readings above 50 indicating sector expansion in July. In June, three of these jurisdictions showed readings above 50; in May, only three had readings above 50 as well. It remains a difficult time for manufacturing globally.

The readings for the manufacturing PMIs also show slippage in the medians from 12-months to six-months to three-months. The 12-month median is 49.2, the six-month median at 48.8, and the three-month median at 48.7. The bottom line is that most manufacturing sectors show contraction, and the contractions are generally getting slightly worse.

However, on an individual basis over three months about two-thirds of the reporters showed an improvement. Over six months just under 40% showed improvement and over a year about 44% of them showed improvement compared to the year before. Only the three-month versus six-month comparison shows a majority of reporters indicating better performance in July.

The ranked or queue standings metrics that place these individual readings for July in their queue of data over the last 4 ½ years, show standings above 50% which put the individual readings above their medians for this period. And only six of these eighteen reporting jurisdictions sported readings above 50%. Those were for the euro area, Germany, France, and India. India has a rating well above 50% at its 96th percentile; Malaysia has a reading above 50% and Vietnam has a reading well above 50% at its 74th percentile.

250801.jpg

The global economy has been put through the ringer with shocks from a war in Ukraine, stepped up military action in the Middle East, threats in the Straits of Hormuz, and an aggressive tariff policy from the United States, affecting global trade- a significant factor for manufacturing. These events have wrong-footed manufacturing globally. During this period, the inflation threat has dissipated; however, in most countries, inflation still slightly overshoots its target where central banks have such targets.

The U.S. has a particularly large number of policy changes afoot. Its manufacturing sector is still struggling. And recent employment data there indicate what appears to be a broader slowdown in the economy. Job growth in the U.S. has slowed and U.S. trends now show consumer spending slowing along with weaker and downwardly revised job growth. Put together, these are signals to watch closely.

Economy in Brief: 2008

Jump to:

U.S. Productivity Growth Revised Up; Unit Labor Costs Fell

U.S. Initial Claims for Jobless Insurance Highest in Four Weeks

U.S. ISM Nonmanufacturing Index Up, Prices Down

ADP Report: Payroll Employment Fell 33,000 in August

U.S. August Light Vehicle Sales Recovered Modestly

U.S. August Light Vehicle Sales Recovered Modestly

Retail Sales Trend are Slipping Everywhere in the Euro Area

U.S. Factory Inventories Rose Again