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/081024a.jpg" width="353">
The level of September existing homes jumped 5.5% from August to 5.180 million, according to the National Association of Realtors. The rise followed an unrevised 2.2% August decline and beat Consensus expectations for a selling rate of 4.95M homes. Total sales include sales of condos and co-ops.
Median home prices fell 5.7% (NSA) last month for the third consecutive monthly drop. That pulled the y/y comparison to -9.0%. Prices have fallen 16.7% since their peak in April 2007.
Sales of existing single-family homes rose 6.2% after an unrevised 1.4% August decline. The y/y gains in both total sales and sales of single family homes turned positive for the first time since November 2005. Sales of existing homes, nonetheless, are down by one-third from their peak in mid-2005.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081024b.jpg" width="353">
By region, home sales in the West led last month&#39;s increase with a 16.8% m/m gain. That lifted sales by more than one third versus the year ago level. Sales in the Midwest also rose but by a lesser 4.4%; the y/y change is still a negative 2.5%. In the South rose 2.2% (-7.8% y/y) but sales in the Northeast were off 1.2% (-7.7% y/y).
The number of unsold homes (condos &amp; single-family) on the market fell 1.6% during September (-2.4% y/y) after a 5.2% August drop. At the current sales rate, the inventory fell to a 9.9 months supply versus the April peak of 11.2 months. For single-family homes, however, the inventory fell a bit more to a 9.4 months supply at the current sales rate, down from an 11.0 months supply in June.
Subprime Facts: What (We Think) We Know about the Subprime Crisis and What We Don&#146;t from the Federal Reserve Bank of Boston is available <a href="http://www.bos.frb.org/economic/ppdp/2008/ppdp0802.pdf">here</a>.

<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)</th>
<th scope="col">September</th>
<th scope="col">y/y %</th>
<th scope="col">August</th>
<th scope="col">September &#39;07</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>5,180</td>
<td>1.4</td>
<td>4,910</td>
<td>5,020</td>
<td>5,672</td>
<td>6,508</td>
<td>7,076</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>840</td>
<td>-7.7</td>
<td>850</td>
<td>910</td>
<td>1,008</td>
<td>1,090</td>
<td>1,168</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,190</td>
<td>-2.5</td>
<td>1,140</td>
<td>1,220</td>
<td>1,331</td>
<td>1,491</td>
<td>1,589</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,900</td>
<td>-7.8</td>
<td>1,860</td>
<td>2,060</td>
<td>2,240</td>
<td>2,576</td>
<td>2,704</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,250</td>
<td>34.4</td>
<td>1,070</td>
<td>930</td>
<td>1,093</td>
<td>1,353</td>
<td>1,617</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,620</td>
<td>3.8</td>
<td>4,350</td>
<td>4,450</td>
<td>4,958</td>
<td>5,703</td>
<td>6,181</td>
</tr>
<tr class="odd">
<td class="firstcol">Median Price, Total, $</td>
<td>191,600</td>
<td>-9.0</td>
<td>203,100</td>
<td>210,500</td>
<td>216,617</td>
<td>222,000</td>
<td>218,217</td>
</tr>
</tbody>
</table>
</body>
</html>

The level of September existing homes jumped 5.5% from August to 5.180 million, according to the National Association of Realtors. The rise followed an unrevised 2.2% August decline and beat Consensus expectations for a selling rate [...]

Lower Prices Spurred U.S. Existing Home Sales

<!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/081024a.jpg" align="left" border="0" height="265" width="353">
The level of September existing homes jumped
5.5% from August to 5.180 million, according to the National
Association of Realtors. The rise followed an unrevised 2.2% August
decline and beat Consensus expectations for a selling rate of 4.95M
homes. Total sales include sales of condos and co-ops.
Median home prices fell 5.7% (NSA) last
month for the third consecutive monthly drop. That pulled the y/y
comparison to -9.0%. Prices have fallen 16.7% since their peak in April
2007.
Sales of existing single-family homes rose 6.2% after an
unrevised 1.4% August decline. The y/y gains in both total sales and
sales of single family homes turned positive for the first time since
November 2005. Sales of existing homes, nonetheless, are down by
one-third from their peak in mid-2005.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081024b.jpg" align="right" border="0" height="265" width="353">
By region, home sales in the West led last month's increase
with a 16.8% m/m gain. That lifted sales by more than one third versus
the year ago level. Sales in the Midwest also rose but by a lesser
4.4%; the y/y change is still a negative 2.5%. In the South rose 2.2%
(-7.8% y/y) but sales in the Northeast were off 1.2% (-7.7% y/y).
The number of unsold homes (condos &amp; single-family) on
the market fell 1.6% during September (-2.4% y/y) after a 5.2% August
drop. At the current sales rate, the inventory fell to a 9.9 months
supply versus the April peak of 11.2 months. For single-family homes,
however, the inventory fell a bit more to a 9.4 months supply at the
current sales rate, down from an 11.0 months supply in June.
Subprime Facts: What (We Think) We Know about the
Subprime Crisis and What We Don&#8217;t from the Federal Reserve
Bank of Boston is available <a href="http://www.bos.frb.org/economic/ppdp/2008/ppdp0802.pdf">here</a>.

<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)</th>
<th scope="col">September</th>
<th scope="col">y/y %</th>
<th scope="col">August</th>
<th scope="col">September '07</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>5,180</td>
<td>1.4</td>
<td>4,910</td>
<td>5,020</td>
<td>5,672</td>
<td>6,508</td>
<td>7,076</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>840</td>
<td>-7.7</td>
<td>850</td>
<td>910</td>
<td>1,008</td>
<td>1,090</td>
<td>1,168</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,190</td>
<td>-2.5</td>
<td>1,140</td>
<td>1,220</td>
<td>1,331</td>
<td>1,491</td>
<td>1,589</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,900</td>
<td>-7.8</td>
<td>1,860</td>
<td>2,060</td>
<td>2,240</td>
<td>2,576</td>
<td>2,704</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,250</td>
<td>34.4</td>
<td>1,070</td>
<td>930</td>
<td>1,093</td>
<td>1,353</td>
<td>1,617</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,620</td>
<td>3.8</td>
<td>4,350</td>
<td>4,450</td>
<td>4,958</td>
<td>5,703</td>
<td>6,181</td>
</tr>
<tr class="odd">
<td class="firstcol">Median Price, Total, $</td>
<td>191,600</td>
<td>-9.0</td>
<td>203,100</td>
<td>210,500</td>
<td>216,617</td>
<td>222,000</td>
<td>218,217</td>
</tr>
</tbody>
</table>
Europe's PMIs Are Weak- Showing
Contraction! 
by <a href="/comment/Brusca.html">Robert
Brusca</a> October 24, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081024c.jpg" align="left" border="0" height="265" width="353">
Europe&#8217;s PMIs are now weak. They are at or near the lows we
have seen since the services PMI was issued in July of 1998. Both
service sand MFG PMIs are below their respective neutral readings of 50
and are thus indicating CONTRACTION. 
 

The MFG PMI is even at its lowest level since June of 1997
when its survey began. 
 

The month to month drop in the MFG index is the largest over
this period while the services drop ranks as about the 18th smallest
&#8216;gain&#8217; in its history of the 63 drops in the 123 observation of the
series. This months&#8217; drop also ranks 45 in size among all drops or as
the eighteenth largest drop when ranked among drops (or the bottom 28
percentile). In relative magnitude this month&#8217;s service sector drop is
a bottom third affair. The MFG sector is taking the relatively larger
hit for this month. It is taking its largest drop on record and falling
to its lowest position in its history. 
 

Europe has been a late comer to weakness but is catching up
with the US. In September the US MFG PMI stood at a level 43.5, below
where Europe was then but above where Europe is now. The US ISM may yet
fall to a lower level in October and be weaker than Europe. But the two
indices are clearly now sharing the same dimension of weakness
regardless of which is the weaker. Last month the US non-MFG PMI stood
at a level of 50 above the service sector reading for EMU. EMU&#8217;s drop
to 46.91 seems clearly a weaker reading than what we get out of the US
Non-MFG PMI (where 44.6 is the weakest reading ever) since sharp
declines have not marked its recent trend. But things are changing fast
and maybe the US non-MFG sector will weaken beyond Europe&#8217;s reading. We
do not yet know how rapidly the economy descended in October. But this
is not a time that has rewarded optimistic projecting. Maybe the
message from Europe is that we should brace ourselves for even worse
news from the US. 
 

One message from Europe is nonetheless clear. Both MFG and
Services indices are quite weak and the MFG sector is falling very hard
right now. Expect the more conventional readings for Europe to start to
look a lot weaker. Since this report is topical and up-to-date as of
October it is a month or two ahead of the release of more conventional
economic reports form Europe. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col"> FLASH
Readings</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td colspan="3" class="firstcol">Market
PMIs for the
E-Zone-13</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Oct-08</td>
<td>41.33</td>
<td>46.91</td>
</tr>
<tr>
<td class="firstcol">Sep-08</td>
<td>44.97</td>
<td>48.44</td>
</tr>
<tr>
<td class="firstcol">Aug-08</td>
<td>47.55</td>
<td>48.46</td>
</tr>
<tr>
<td class="firstcol">Jul-08</td>
<td>47.38</td>
<td>48.32</td>
</tr>
<tr class="odd&quot;">
<td colspan="3" class="firstcol">Averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>46.63</td>
<td>47.76</td>
</tr>
<tr>
<td class="firstcol">6-Mo</td>
<td>48.40</td>
<td>48.60</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>50.37</td>
<td>50.52</td>
</tr>
<tr class="odd&quot;">
<td colspan="3" class="firstcol">33-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>57.61</td>
<td>60.65</td>
</tr>
<tr>
<td class="firstcol">Low</td>
<td>41.33</td>
<td>46.68</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>0.0%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
</body></html>

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/081023c.jpg" align="left" border="0" height="265" width="353">
Industrial orders in the e-zone fell by a relatively sharp
1.2% in August. Still there has been enough strength recently for the
3-mo growth rate of e-Zone orders to stand at a positive 5.3%. Over six
months and 12-months orders are still declining. And in the quarter-to
date orders are falling as well at a sharp -6% pace. Order weakness
continues to be led by orders from abroad (see table). Domestic orders
are not so much stronger (see chart) as they are more volatile. 

The selected country level reports in the table shows weakness
of a significant magnitude across the group albeit there are timing
differences and volatility in orders within this group. But in
Q3-to-date only Italy shows an order rise. The UK shows an annual rate
of decline at a -40% rate. Italy is posting a gain in the quarter at
nearly a 10% pace. Germany and France are showing quarter-to-date order
drops on the order of 6% to 7%. 
 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">E-zone
and UK Industrial Orders &amp; Sales Trends </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">% m/m</td>
<td>Aug 
08</td>
<td>Aug 
08</td>
<td>Aug 
08</td>
<td>Aug 
07</td>
<td>Aug 
06</td>
<td>Qtr-2 
Date</td>
</tr>
<tr>
<td class="firstcol">Ezone Detail</td>
<td>Aug 
08</td>
<td>Jul 
08</td>
<td>Jun 
08</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Saar</td>
</tr>
<tr>
<td class="firstcol">MFG Sales</td>
<td>0.6%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.9%</td>
<td>3.7%</td>
<td>4.6%</td>
<td>6.4%</td>
<td>7.8%</td>
<td>4.5%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.3%</td>
<td>1.9%</td>
<td>1.8%</td>
<td>6.4%</td>
<td>7.8%</td>
<td>2.9%</td>
</tr>
<tr>
<td class="firstcol">Capital</td>
<td>0.3%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.6%</td>
<td>2.2%</td>
<td>3.4%</td>
<td>4.4%</td>
<td>4.2%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">Intermediate</td>
<td>-0.4%</td>
<td>1.8%</td>
<td>1.4%</td>
<td>11.8%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>8.3%</td>
<td>7.1%</td>
<td>5.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG Orders</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-1.2%</td>
<td>2.0%</td>
<td>0.5%</td>
<td>5.3%</td>
<td>-5.1%</td>
<td>-1.5%</td>
<td>5.1%</td>
<td>11.6%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">E-13 Domestic MFG orders</td>
<td>-0.4%</td>
<td>1.8%</td>
<td>1.4%</td>
<td>11.8%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>2.6%</td>
<td>7.6%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">E-13 Foreign MFG orders</td>
<td>-2.1%</td>
<td>1.9%</td>
<td>-0.3%</td>
<td>-2.4%</td>
<td>-11.9%</td>
<td>-4.0%</td>
<td>7.1%</td>
<td>16.4%</td>
<td>-5.5%</td>
</tr>
<tr>
<td class="firstcol">Countries:</td>
<td>Aug 
08</td>
<td>Jul 
08</td>
<td>Jun 
08</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Qtr-2 
Date</td>
</tr>
<tr>
<td class="firstcol">Germany:</td>
<td>3.3%</td>
<td>-0.7%</td>
<td>-2.5%</td>
<td>-0.3%</td>
<td>-6.4%</td>
<td>0.1%</td>
<td>5.5%</td>
<td>17.0%</td>
<td>-6.0%</td>
</tr>
<tr>
<td class="firstcol">France:</td>
<td>-7.2%</td>
<td>4.3%</td>
<td>1.4%</td>
<td>-6.9%</td>
<td>-18.5%</td>
<td>-7.8%</td>
<td>8.6%</td>
<td>-5.3%</td>
<td>-7.4%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-0.3%</td>
<td>2.7%</td>
<td>0.7%</td>
<td>13.2%</td>
<td>-1.4%</td>
<td>1.1%</td>
<td>-0.6%</td>
<td>18.2%</td>
<td>9.8%</td>
</tr>
<tr>
<td class="firstcol">UK(EU)</td>
<td>-15.2%</td>
<td>2.4%</td>
<td>-5.0%</td>
<td>-53.6%</td>
<td>-37.2%</td>
<td>-16.4%</td>
<td>4.2%</td>
<td>-3.3%</td>
<td>-40.7%</td>
</tr>
</tbody>
</table>
</body></html>

Industrial orders in the e-zone fell by a relatively sharp 1.2% in August. Still there has been enough strength recently for the 3-mo growth rate of e-Zone orders to stand at a positive 5.3%. Over six months and 12-months orders are [...]

European Orders Head Sharply Lower 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>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081023a.jpg" width="353">
Initial claims for unemployment insurance rose 15,000 during last week to 448,000. That offset an 18,000 decline during the week prior which was revised slightly shallower.The Labor Department estimates that another 12,000 claims in the latest week were due to Hurricane Ike in Texas, the same as during the week prior but less than the 17,000 and 45,000 lifts during the two prior periods.
The four-week moving average of initial claims fell slightly to 480,250 (46.5% y/y), just barely off the cycle high.
The latest figures are for the survey week for October non-farm payrolls and initial claims rose 20,000 (4.4%) from the September period. During the last ten years there has been a 76% inverse correlation between the level of initial claims and the m/m change in non-farm payrolls.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081023b.jpg" width="353">
The largest increases in initial claims for the week ending Oct. 11 were in New York (+5,224), Michigan (+3,383), Florida (+3,007), California (+2,781), and South Carolina (+2,723), while the largest decreases were in Texas (-5,968), Ohio (-4,317), Alabama (-1,534), Louisiana (-828), and Delaware (-827).
Continuing claims for unemployment insurance during the week of October 11 fell 6,000 after a revised 55,000 increase during the prior week, initially reported at up 40,000. The four-week average of claims rose to this cycle&#39;s high of 3,680,000, the highest level since early 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 w/w at 2.8% during the week of October 11, this cycle&#39;s high and the highest since mid-2003. The high in that recessionary period was the 3.0% reached in late June 2003.
What Exactly Is a Recession&#151;and Are We in One? from the Federal Reserve Bank of Cleveland can be found <a href="http://www.clevelandfed.org/research/trends/2008/1108/01ecoact.cfm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">10/18/08</th>
<th scope="col">10/11/08</th>
<th scope="col">10/04/08</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>478</td>
<td>&nbsp;463</td>
<td>481</td>
<td>43.5%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,720</td>
<td>3,726</td>
<td>46.1</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance rose 15,000 during last week to 448,000. That offset an 18,000 decline during the week prior which was revised slightly shallower.The Labor Department estimates that another 12,000 claims in [...]

U.S. Weekly Initial Claims for Jobless Insurance Ticked Higher

<!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/081023a.jpg" align="left" border="0" height="265" width="353">
Initial claims for unemployment insurance rose 15,000 during
last week to 448,000. That offset an 18,000 decline during the week
prior which was revised slightly shallower.The Labor Department
estimates that another 12,000 claims in the latest week were due to
Hurricane Ike in Texas, the same as during the week prior but less than
the 17,000 and 45,000 lifts during the two prior periods.
The four-week moving average of initial claims fell slightly
to 480,250 (46.5% y/y), just barely off the cycle high.
The latest figures are for the survey week for October
non-farm payrolls and initial claims rose 20,000 (4.4%) from the
September period. During the last ten years there has been a 76%
inverse correlation between the level of initial claims and the m/m
change in non-farm payrolls.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081023b.jpg" align="right" border="0" height="265" width="353">
The largest increases in initial claims for the week ending
Oct. 11 were in New York (+5,224), Michigan (+3,383), Florida (+3,007),
California (+2,781), and South Carolina (+2,723), while the largest
decreases were in Texas (-5,968), Ohio (-4,317), Alabama (-1,534),
Louisiana (-828), and Delaware (-827).
Continuing claims for unemployment insurance during the week
of October 11 fell 6,000 after a revised 55,000 increase during the
prior week, initially reported at up 40,000. The four-week average of
claims rose to this cycle's high of 3,680,000, the highest level since
early 2003. Continuing claims provide some indication of workers'
ability to find employment and they lag the initial claims figures by
one week.
The insured rate of unemployment was stable w/w at 2.8% during
the week of October 11, this cycle's high and the highest since
mid-2003. The high in that recessionary period was the 3.0% reached in
late June 2003.
What Exactly Is a Recession&#8212;and Are We in One? from
the Federal Reserve Bank of Cleveland can be found <a href="http://www.clevelandfed.org/research/trends/2008/1108/01ecoact.cfm">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">10/18/08</th>
<th scope="col">10/11/08</th>
<th scope="col">10/04/08</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>478</td>
<td>&nbsp;463</td>
<td>481</td>
<td>43.5%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,720</td>
<td>3,726</td>
<td>46.1</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
&nbsp;© 2008&nbsp; HAVER
ANALYTICS. All rights reserved. 
by <a href="/comment/Brusca.html">Robert
Brusca</a> European Orders Head Sharply Lower In August October
23, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081023c.jpg" align="left" border="0" height="265" width="353">
Industrial orders in the e-zone fell by a relatively sharp
1.2% in August. Still there has been enough strength recently for the
3-mo growth rate of e-Zone orders to stand at a positive 5.3%. Over six
months and 12-months orders are still declining. And in the quarter-to
date orders are falling as well at a sharp -6% pace. Order weakness
continues to be led by orders from abroad (see table). Domestic orders
are not so much stronger (see chart) as they are more volatile. 

The selected country level reports in the table shows weakness
of a significant magnitude across the group albeit there are timing
differences and volatility in orders within this group. But in
Q3-to-date only Italy shows an order rise. The UK shows an annual rate
of decline at a -40% rate. Italy is posting a gain in the quarter at
nearly a 10% pace. Germany and France are showing quarter-to-date order
drops on the order of 6% to 7%. 
 
 


<table border="0" cellspacing="0" width="100%"> <colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">E-zone
and UK Industrial Orders &amp; Sales Trends </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">% m/m</td>
<td>Aug 
08</td>
<td>Aug 
08</td>
<td>Aug 
08</td>
<td>Aug 
07</td>
<td>Aug 
06</td>
<td>Qtr-2 
Date</td>
</tr>
<tr>
<td class="firstcol">Ezone Detail</td>
<td>Aug 
08</td>
<td>Jul 
08</td>
<td>Jun 
08</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Saar</td>
</tr>
<tr>
<td class="firstcol">MFG Sales</td>
<td>0.6%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.9%</td>
<td>3.7%</td>
<td>4.6%</td>
<td>6.4%</td>
<td>7.8%</td>
<td>4.5%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.3%</td>
<td>1.9%</td>
<td>1.8%</td>
<td>6.4%</td>
<td>7.8%</td>
<td>2.9%</td>
</tr>
<tr>
<td class="firstcol">Capital</td>
<td>0.3%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.6%</td>
<td>2.2%</td>
<td>3.4%</td>
<td>4.4%</td>
<td>4.2%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">Intermediate</td>
<td>-0.4%</td>
<td>1.8%</td>
<td>1.4%</td>
<td>11.8%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>8.3%</td>
<td>7.1%</td>
<td>5.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG Orders</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-1.2%</td>
<td>2.0%</td>
<td>0.5%</td>
<td>5.3%</td>
<td>-5.1%</td>
<td>-1.5%</td>
<td>5.1%</td>
<td>11.6%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">E-13 Domestic MFG orders</td>
<td>-0.4%</td>
<td>1.8%</td>
<td>1.4%</td>
<td>11.8%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>2.6%</td>
<td>7.6%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">E-13 Foreign MFG orders</td>
<td>-2.1%</td>
<td>1.9%</td>
<td>-0.3%</td>
<td>-2.4%</td>
<td>-11.9%</td>
<td>-4.0%</td>
<td>7.1%</td>
<td>16.4%</td>
<td>-5.5%</td>
</tr>
<tr>
<td class="firstcol">Countries:</td>
<td>Aug 
08</td>
<td>Jul 
08</td>
<td>Jun 
08</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>Qtr-2 
Date</td>
</tr>
<tr>
<td class="firstcol">Germany:</td>
<td>3.3%</td>
<td>-0.7%</td>
<td>-2.5%</td>
<td>-0.3%</td>
<td>-6.4%</td>
<td>0.1%</td>
<td>5.5%</td>
<td>17.0%</td>
<td>-6.0%</td>
</tr>
<tr>
<td class="firstcol">France:</td>
<td>-7.2%</td>
<td>4.3%</td>
<td>1.4%</td>
<td>-6.9%</td>
<td>-18.5%</td>
<td>-7.8%</td>
<td>8.6%</td>
<td>-5.3%</td>
<td>-7.4%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-0.3%</td>
<td>2.7%</td>
<td>0.7%</td>
<td>13.2%</td>
<td>-1.4%</td>
<td>1.1%</td>
<td>-0.6%</td>
<td>18.2%</td>
<td>9.8%</td>
</tr>
<tr>
<td class="firstcol">UK(EU)</td>
<td>-15.2%</td>
<td>2.4%</td>
<td>-5.0%</td>
<td>-53.6%</td>
<td>-37.2%</td>
<td>-16.4%</td>
<td>4.2%</td>
<td>-3.3%</td>
<td>-40.7%</td>
</tr>
</tbody>
</table>
</body></html>

<!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/081022c.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s consumer sentiment trend and retail sales trends
continue to show each other the way lower. While some speak
disparagingly about consumer surveys, it is clear that the consumer&#8217;s
habits are bang in line with what the consumer is telling various
surveyors. 
 

In the quarter to date (two-months into Q3), nominal sales are
still rising. But on the more important inflation-adjusted basis sales
are dropping at a -3.4% annual rate - that&#8217;s quite weak. 
 

Nominal sales trends have bee negative over three, six and
twelve month horizons. In August weakness seems to have hit all the
major categories together. While July showed a nominal sales gain, it
is now clear that it was not heralding a period of better growth ahead
That much has become clear in August. 
 

Italy remains a trouble EMU economy, led by consumer sector
weakness. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col"> Italy Retail Sales Growth</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">mo/mo %</td>
<td colspan="4">At annual rates</td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>Aug-08</td>
<td>Jul-08</td>
<td>Jun-08</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>YrAgo</td>
<td>Q-2-Date</td>
</tr>
<tr>
<td class="firstcol">Retail Trade</td>
<td>-0.5%</td>
<td>0.6%</td>
<td>-0.4%</td>
<td>-1.1%</td>
<td>-1.5%</td>
<td>-0.7%</td>
<td>0.7%</td>
<td>0.9%</td>
</tr>
<tr>
<td class="firstcol">Food Bev &amp; Tobacco</td>
<td>-0.3%</td>
<td>0.6%</td>
<td>-0.1%</td>
<td>1.0%</td>
<td>0.3%</td>
<td>0.9%</td>
<td>1.5%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">Clothing&amp;Furniture</td>
<td>-6.1%</td>
<td>6.3%</td>
<td>-3.0%</td>
<td>-12.2%</td>
<td>-10.7%</td>
<td>-3.7%</td>
<td>-0.3%</td>
<td>12.8%</td>
</tr>
<tr>
<td class="firstcol">Total Real Retail</td>
<td>-0.7%</td>
<td>0.3%</td>
<td>-0.9%</td>
<td>-5.1%</td>
<td>-5.4%</td>
<td>-4.6%</td>
<td>-0.9%</td>
<td>-3.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Real</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Retial Ex auto</td>
<td>-0.7%</td>
<td>0.3%</td>
<td>-0.9%</td>
<td>-5.1%</td>
<td>-5.4%</td>
<td>-4.6%</td>
<td>-0.9%</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body></html>

Italy’s consumer sentiment trend and retail sales trends continue to show each other the way lower. While some speak disparagingly about consumer surveys, it is clear that the consumer’s habits are bang in line with what the consumer [...]

Italy’s Consumer Confidence and Retail Sales Trends Continue to Drop

<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/081022a.jpg" width="353">
The total number of mortgage applications fell 16.6% last week from the prior period to their lowest level since late-2000, according to the Mortgage Bankers Association. The decline pulled the October average 17.6% below September during which there had been a brief upturn in applications.
Applications for a mortgage to purchase a home tumbled 10.9% w/w and the decline pulled the month-to-date average 13.5% below September. Last month, purchase applications rose 8.7% from August during which these applications fell 6.1% m/m (-27.0% y/y). The August decline was accompanied by a 2.4% m/m decline (-12.7% y/y) in new plus existing single family home sales.
During the last ten years there has been a 61% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales. Figures covering sales of existing single-family home will be available this Friday while single-family home sales will be published early next week.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081022b.jpg" width="353">
Applications to refinance a home mortgage tumbled 23.5% last week and the decline lowered applications so far this month 22.3% below the September average. During September, applications to refinance had risen 61.9% from August as 15-year mortgage rates fell briefly to 5.54%.
The effective interest rate on a conventional 15-year mortgage rose last week to 6.33% following an average of 6.01% last month. For a 30-year mortgage, rates fell w/w to 6.50%. Interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10-year Treasury securities. For an adjustable rate 1-Year mortgage the rate rose to 7.07% from 6.70% averaged last month.
During the last ten years there has been a (negative) 79% correlation between the level of applications for purchase and the effective interest rate on a 30-year mortgage.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
The figures for weekly mortgage applications are available in Haver&#39;s USWEEKLY database.
Strategic Risk Management in an Interconnected World is the title of a speech given Monday by Fed Governor Randall S. Kroszner and it can be found <a href="http://http://www.federalreserve.gov/newsevents/speech/kroszner20081020a.htm">here</a>.
Unprecedented Times in our Economy* are remarks offered last week by Chicago Fed President Charles L. Evans and they are available <a href="http://www.chicagofed.org/news_room/speeches/fond%20du%20lac_Speech.cfm">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">10/17/08</th>
<th scope="col">10/10/08</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">Total Market Index</td>
<td>408.1</td>
<td>489.3</td>
<td>-37.8%</td>
<td>652.6</td>
<td>584.2</td>
<td>708.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>279.3</td>
<td>313.5</td>
<td>-32.8%</td>
<td>424.9</td>
<td>406.9</td>
<td>470.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,158.8</td>
<td>1,514.2</td>
<td>-43.7%</td>
<td>1,997.9</td>
<td>1,634.0</td>
<td>2,092.3</td>
</tr>
</tbody>
</table>
</body>
</html>

The total number of mortgage applications fell 16.6% last week from the prior period to their lowest level since late-2000, according to the Mortgage Bankers Association. The decline pulled the October average 17.6% below September [...]

U.S. Mortgage Applications Lowest Since 2000

<!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/081022a.jpg" align="left" border="0" height="265" width="353">
The total number of mortgage applications fell 16.6% last week
from the prior period to their lowest level since late-2000, according
to the Mortgage Bankers Association. The decline pulled the October
average 17.6% below September during which there had been a brief
upturn in applications.
Applications for a mortgage to purchase a home tumbled 10.9%
w/w and the decline pulled the month-to-date average 13.5% below
September. Last month, purchase applications rose 8.7% from August
during which these applications fell 6.1% m/m (-27.0% y/y). The August
decline was accompanied by a 2.4% m/m decline (-12.7% y/y) in new plus
existing single family home sales.
During the last ten years there has been a 61% correlation
between the y/y change in purchase applications and the change in new
plus existing single family home sales. Figures covering sales of
existing single-family home will be available this Friday while
single-family home sales will be published early next week.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081022b.jpg" align="right" border="0" height="265" width="353">
Applications to refinance a home mortgage tumbled 23.5% last
week and the decline lowered applications so far this month 22.3% below
the September average. During September, applications to refinance had
risen 61.9% from August as 15-year mortgage rates fell briefly to 5.54%.
The effective interest rate on a conventional 15-year mortgage
rose last week to 6.33% following an average of 6.01% last month. For a
30-year mortgage, rates fell w/w to 6.50%. Interest rates on 15 and 30
year mortgages are closely correlated (&gt;90%) with the rate on
10-year Treasury securities. For an adjustable rate 1-Year mortgage the
rate rose to 7.07% from 6.70% averaged last month.
During the last ten years there has been a (negative) 79%
correlation between the level of applications for purchase and the
effective interest rate on a 30-year mortgage.
The Mortgage Bankers Association surveys between 20 to 35 of
the top lenders in the U.S. housing industry to derive its refinance,
purchase and market indexes. The weekly survey covers roughly 50% of
all U.S. residential mortgage applications processed each week by
mortgage banks, commercial banks and thrifts. Visit the Mortgage
Bankers Association site <a href="http://www.mbaa.org">here</a>.
The figures for weekly mortgage applications are available in
Haver's USWEEKLY database.
Strategic Risk Management in an Interconnected World is
the title of a speech given Monday by Fed Governor Randall S. Kroszner
and it can be found <a href="%7Fhttp:/www.federalreserve.gov/newsevents/speech/kroszner20081020a.htm">here</a>.
Unprecedented Times in our Economy* are
remarks offered last week by Chicago Fed President Charles L. Evans and
they are available <a href="http://www.chicagofed.org/news_room/speeches/fond%20du%20lac_Speech.cfm">here</a>. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">BA
Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">10/17/08</th>
<th scope="col">10/10/08</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">Total Market Index</td>
<td>408.1</td>
<td>489.3</td>
<td>-37.8%</td>
<td>652.6</td>
<td>584.2</td>
<td>708.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>279.3</td>
<td>313.5</td>
<td>-32.8%</td>
<td>424.9</td>
<td>406.9</td>
<td>470.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,158.8</td>
<td>1,514.2</td>
<td>-43.7%</td>
<td>1,997.9</td>
<td>1,634.0</td>
<td>2,092.3</td>
</tr>
</tbody>
</table>
Italy&#8217;s Consumer Confidence and
Retail Sales Trends Continue to Drop 
by <a href="/comment/Brusca.html">Robert
Brusca</a> October 22, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/081022c.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s consumer sentiment trend and retail sales trends
continue to show each other the way lower. While some speak
disparagingly about consumer surveys, it is clear that the consumer&#8217;s
habits are bang in line with what the consumer is telling various
surveyors. 
 

In the quarter to date (two-months into Q3), nominal sales are
still rising. But on the more important inflation-adjusted basis sales
are dropping at a -3.4% annual rate - that&#8217;s quite weak. 
 

Nominal sales trends have bee negative over three, six and
twelve month horizons. In August weakness seems to have hit all the
major categories together. While July showed a nominal sales gain, it
is now clear that it was not heralding a period of better growth ahead
That much has become clear in August. 
 

Italy remains a trouble EMU economy, led by consumer sector
weakness. 


<table border="0" cellspacing="0" width="100%"> <colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col"> Italy
Retail Sales Growth</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">mo/mo %</td>
<td colspan="4">At annual rates</td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>Aug-08</td>
<td>Jul-08</td>
<td>Jun-08</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>YrAgo</td>
<td>Q-2-Date</td>
</tr>
<tr>
<td class="firstcol">Retail Trade</td>
<td>-0.5%</td>
<td>0.6%</td>
<td>-0.4%</td>
<td>-1.1%</td>
<td>-1.5%</td>
<td>-0.7%</td>
<td>0.7%</td>
<td>0.9%</td>
</tr>
<tr>
<td class="firstcol">Food Bev &amp; Tobacco</td>
<td>-0.3%</td>
<td>0.6%</td>
<td>-0.1%</td>
<td>1.0%</td>
<td>0.3%</td>
<td>0.9%</td>
<td>1.5%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">Clothing&amp;Furniture</td>
<td>-6.1%</td>
<td>6.3%</td>
<td>-3.0%</td>
<td>-12.2%</td>
<td>-10.7%</td>
<td>-3.7%</td>
<td>-0.3%</td>
<td>12.8%</td>
</tr>
<tr>
<td class="firstcol">Total Real Retail</td>
<td>-0.7%</td>
<td>0.3%</td>
<td>-0.9%</td>
<td>-5.1%</td>
<td>-5.4%</td>
<td>-4.6%</td>
<td>-0.9%</td>
<td>-3.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Real</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Retial Ex auto</td>
<td>-0.7%</td>
<td>0.3%</td>
<td>-0.9%</td>
<td>-5.1%</td>
<td>-5.4%</td>
<td>-4.6%</td>
<td>-0.9%</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body></html>

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

Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

250501Z1.jpg

**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

250501Z2.jpg

**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

250501Z3.jpg

**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

250501Z4.jpg

**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

250501Z5.jpg

**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

250501Z6.jpg

Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

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

Charts of the Week: Tariff Truce, Tenuous Trust

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.

Economy in Brief: October 2008

Jump to:

Lower Prices Spurred U.S. Existing Home Sales

Lower Prices Spurred U.S. Existing Home Sales

European Orders Head Sharply Lower In August

U.S. Weekly Initial Claims for Jobless Insurance Ticked Higher

U.S. Weekly Initial Claims for Jobless Insurance Ticked Higher

Italy’s Consumer Confidence and Retail Sales Trends Continue to Drop

U.S. Mortgage Applications Lowest Since 2000

U.S. Mortgage Applications Lowest Since 2000