Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325a.jpg" align="left" border="0" height="265" width="353"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325b.jpg" align="right" border="0" height="265" width="353">
The Conference Board reported today that consumer confidence
in March again fell sharply. The 15.6% m/m decline to a reading of 64.5
followed February's 12.4% drop. It was the sharpest two month decline
since late 1991. A consensus of economists foresaw less of a decline in
March to a level of 73.8.

The expectations component of the index fell 17.4% m/m and
dropped the level to its lowest since the 1970s. Expectations for
business conditions and for income dropped sharply while expectations
for the inflation rate surged to 6.1%, its highest since 2005.
Respondents planning to buy a household appliance dropped
sharply.
The present conditions index also fell a sharp 14.2% m/m to
the lowest level since mid 2004.
Just 15.4% of respondents saw business conditions as good, the
lowest since 2003. Jobs as plentiful were seen by 18.8% while 25.1% saw
them as hard to get, the highest since mid 2005.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Conference
Board &nbsp;(SA, 1985=100)</th>
<th scope="col">March</th>
<th scope="col">February</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">Consumer
Confidence Index</td>
<td>64.5</td>
<td>76.4</td>
<td>-40.4</td>
<td>103.4</td>
<td>105.9</td>
<td>100.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>89.2</td>
<td>104.0</td>
<td>-35.6</td>
<td>128.8</td>
<td>130.2</td>
<td>116.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>47.9</td>
<td>58.0</td>
<td>-45.5</td>
<td>86.4</td>
<td>89.7</td>
<td>89.7</td>
</tr>
</tbody>
</table>
</body></html>

The Conference Board reported today that consumer confidence in March again fell sharply. The 15.6% m/m decline to a reading of 64.5 followed February's 12.4% drop. It was the sharpest two month decline since late 1991. A consensus of [...]

Consumer Confidence Fell Sharply

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325a.jpg" align="left" border="0" height="265" width="353">
The Conference Board reported today that consumer confidence
in March again fell sharply. The 15.6% m/m decline to a reading of 64.5
followed February's 12.4% drop. It was the sharpest two month decline
since late 1991. A consensus of economists foresaw less of a decline in
March to a level of 73.8.
<div align="left"> 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325b.jpg" align="right" border="0" height="265" width="353">

The expectations component of the index fell 17.4% m/m and
dropped the level to its lowest since the 1970s. Expectations for
business conditions and for income dropped sharply while expectations
for the inflation rate surged to 6.1%, its highest since 2005.
<div align="left"> </div>
<div align="left">

Respondents planning to buy a household appliance dropped
sharply.
<div align="left"> </div>
</div>
</div>
<div align="left">

The present conditions index also fell a sharp 14.2% m/m to
the lowest level since mid 2004.
<div align="left"> </div>
<div align="left">

Just 15.4% of respondents saw business conditions as good, the
lowest since 2003. Jobs as plentiful were seen by 18.8% while 25.1% saw
them as hard to get, the highest since mid 2005.
</div>
</div>


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Conference
Board &nbsp;(SA, 1985=100)</th>
<th scope="col">March</th>
<th scope="col">February</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">Consumer
Confidence Index</td>
<td>64.5</td>
<td>76.4</td>
<td>-40.4</td>
<td>103.4</td>
<td>105.9</td>
<td>100.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>89.2</td>
<td>104.0</td>
<td>-35.6</td>
<td>128.8</td>
<td>130.2</td>
<td>116.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>47.9</td>
<td>58.0</td>
<td>-45.5</td>
<td>86.4</td>
<td>89.7</td>
<td>89.7</td>
</tr>
</tbody>
</table>
Case-Shiller Home Price Index
Posts 10.7% y/y Decline 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325c.jpg" align="left" border="0" height="265" width="353">
The S&amp;P/Case-Shiller Composite 20
home price index fell 2.4% m/m in January. As a result this index of U.S.
home prices was down 10.7% from January of 2007, a record
decline for this series which dates back only to 2000. Home prices have
fallen in every month since July of 2006 and the decline over that
period totals 12.5%.
The index of 20 U.S. cities and their surrounding areas is not
adjusted for the quality or the size of the home. The home price index
from the Office of Federal Housing Enterprise Oversight (OFHEO) does
make these adjustments. This series indicates that during the fourth
quarter of 2007 house prices rose a negligible 0.8% y/y, the weakest
gain since 1990.
The Case-Shiller composite index of homes in a fewer 10 a
metropolitan areas fell 2.3% (-11.4% y/y) last month.
Home prices in San Francisco prices fell 13.2% and prices in
Miami Florida also fell sharply by 19.3% y/y. Home prices in Las Vegas
Nevada matched that decline and fell 19.3% y/y while in Los Angeles
prices fell 16.5% y/y.
Relatively moderate declines were registered in New York
(-5.8% y/y), Chicago (-6.6% y/y), Denver (-5.1% y/y) and San Diego
California (-5.8% y/y).
<div align="left">

An overview of the S&amp;P/Case-Shiller home price series
can be found <a href="http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html">here</a>.
<div align="left">

The S&amp;P/Case-Shiller home price series can be found in
Haver's REGIONAL database.
</div>
<div align="left"></div>
</div>


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">S&amp;P/Case-Shiller
Home Price Index (NSA, Jan 00 = 100)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">20 City Composite
Index</td>
<td>180.65</td>
<td>185.01</td>
<td>-10.7%</td>
<td>-3.8%</td>
<td>7.6%</td>
<td>15.8%</td>
</tr>
</tbody>
</table>
U.S. Petroleum Prices Tick Lower 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325d.jpg" align="left" border="0" height="265" width="353">
Retail gasoline prices ticked down two
cents last week after rising strongly during each of the prior five
weeks. The retreat to $3.26 per gallon was so modest that prices so far
in March are still up 6.6% from February. They were roughly stable for
three months before that.
Yesterday, the wholesale price of unleaded gasoline continued
strong. A five cent rise in Monday's price to $2.48 per gallon versus
Friday pulled gas prices up nearly a dime versus last week's average.
Crude oil prices also retreated with last week's average price
for WTI crude down three dollars w/w to $106.02 per bbl. Yesterday
crude prices backed off even further to $101.07 per barrel.
Natural gas prices also topped last week and were down w/w to
$9.12 /mmbtu. Nevertheless, natural gas prices were up sharply from
February and were up by nearly one third versus last year.
These energy price series are available in Haver's Daily
and Weekly databases.
Globalization and the Determinants of Domestic Inflation is a
panel discussion held by Janet L. Yellen, President of the San
Francisco Federal Reserve Bank and it is available <a href="http://www.frbsf.org/news/speeches/2008/0307.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/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">03/24/08</th>
<th scope="col">03/17/08</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">Retail Gasoline ($ per Gallon)</td>
<td>3.26</td>
<td>3.28</td>
<td>24.9%</td>
<td>2.80</td>
<td>2.57</td>
<td>2.27</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>106.02</td>
<td>109.43</td>
<td>81.0%</td>
<td>94.00</td>
<td>61.11</td>
<td>58.16</td>
</tr>
<tr class="odd">
<td class="firstcol">Natural Gas Price, Henry Hub
($/mmbtu)</td>
<td>9.12</td>
<td>9.75</td>
<td>42.3%</td>
<td>6.96</td>
<td>6.74</td>
<td>8.68</td>
</tr>
</tbody>
</table>
U.S. Chain Store Sales Backpedal 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325e.jpg" align="left" border="0" height="265" width="353">
The International Council of Shopping Centers ICSC-UBS Chain
Store survey indicated that chain store sales last week fell 0.4% and
gave back all of the prior week's modest increase. The decline left
sales so far in March up a negligible 0.1% after February's 0.4% rise.

During the last ten years there has been a 45% correlation
between the y/y change in chain store sales and the change in nonauto
retail sales less gasoline.

The ICSC-UBS retail
chain-store sales index is constructed using the same-store sales
(stores open for one year) reported by 78 stores of seven retailers:
Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.


During the latest week the leading indicator of chain store
sales from ICSC-UBS also retreated 0.5% after the prior week's 0.9%
increase.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS
(SA, 1977=100)</a></th>
<th scope="col">03/21/08</th>
<th scope="col">03/14/08</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>
<td class="firstcol">Total Weekly Chain
Store Sales</td>
<td>488.3</td>
<td>490.1</td>
<td>1.0%</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
Iceland Raises Its
Official Discount Rate to 15% 
by <a href="/comment/Curley.html">Louise
Curley</a> March 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325f.jpg" align="left" border="0" height="265" width="353">

Iceland unexpectedly raised its official discount rate
today to 15% from 13.75%. According to the Board of Governors of the
Bank of Iceland, inflation has been higher than forecast and its
currency, the kroner, has depreciated sharply. The kroner fell 14%
during the week ending March 19 as seen in the first chart. Demand is
down and it is becoming more difficult to finance its current account
deficit.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080325g.jpg" align="right" border="0" height="265" width="353">


Iceland's action is in stark contrast to that of the
majority of developed nations who are lowering rates to combat the
spreading effects of the sub prime crisis. Iceland's problems appear to
have little to do with the financial turmoil resulting from the sub
prime crisis, rather its problems appear to be more the result of its
role in the "Carry Trade." (Investors borrow money in low interest
countries, say in Japan, and invest the proceeds in high interest
countries, say in Iceland. Providing that exchange rates are relatively
stable, the trade is profitable. When exchange rates go against the
borrower, the trade becomes unprofitable.) Iceland with its relatively
high interest rates was a favorite recipient of funds in the "Carry
Trade". With relative stability in exchange rates in the period from
2002 to 2006, the Carry Trade was, for the most part, very profitable.
When exchange rates began rising in the low interest countries in 2007
and falling in the high interest countries, the Carry Trade lost much
of its appeal. Inflows were reduced and, in some cases, reversed. The
ups and downs in the carry trade in Iceland are shown in the second
chart which shows the dramatic rise in the inflow of foreign investment
in debt securities. These flows rose dramatically beginning in 2003,
holding at high levels through 2006, plummeting in most of 2007 and
recovering slightly in the last quarter.


The Carry Trade inflows are more like "hot money" flows
than more long term oriented inflows. As such they tend to cause
disruptions in an economy. Among other things, they result in bigger
current account deficits and, unless they are sterilized, they tend to
add to inflationary pressures.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">ICELAND&nbsp;</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3 07&nbsp;</th>
<th scope="col">Q1&nbsp; 07&nbsp;</th>
<th scope="col">Q/Q Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Inflows of Foreign
Invest in Debt Securities
(Mil Korona)</td>
<td>11,212</td>
<td>-138,609</td>
<td>278,074</td>
<td>149,981</td>
<td>-266,862</td>
<td>37,891</td>
<td>925,191</td>
<td>1,057,402</td>
</tr>
</tbody>
</table>
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Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324d.jpg" align="left" border="0" height="265" width="353">Italy&#8217;s retail sales edged up in January, rising by 0.2% in
nominal terms, likely a decline in volume terms given the recent pace
of inflation. Over the past three months, sales values fell at a 0.4%
annual rate. And, overall value growth has been eroding ever so
slightly over this period. In the first quarter of 2008 value growth is
up at a 0.5% annual pace and at a stronger 0.7% pace for food,
beverages and tobacco &#8211; both likely representing volume declines.

The chart at the top shows the ISAE consumer sentiment index
plotted against retail sales Yr/Yr. Notice that the ISAE index plotted
in its raw levels format tends to lead the Yr/Yr decline in retail
sales: Sentiment peaks first and rebounds first. It gives reasonably
good signals about what retail sales are about to do. In the recent
period the weak consumer sentiment readings are pointed to further
weakness in Italy&#8217;s already weak retail sales.

Italy&#8217;s HICP is rising at a 2.9% pace in Q1 (also through
January) and its core is up at a 1.5% pace. But in terms of Italy&#8217;s own
domestic inflation indicator (NIC) inflation is at a 5% pace in the
first quarter or 4.6% excluding tobacco (NIC ex-tobacco). Food prices
alone in Italy are up at a 5.8% pace in Q1.

As in the table above these inflation statistics for the first
quarter growth rates take the January level over the Q4 average
(centered in November) and compound that pace. Italy&#8217;s Q1 inflation
calculated on that same basis produces some dismal implicit estimates
of &#8216;retail sales growth (-2.5% to -4.5% depending on the deflator
used). Inflation is clearly outstripping the nominal growth rates for
sales in these comparisons by a wide margin. Italy is the most severely
impacted economy of the EMU Big Three or EU Big Four (i.e. Germany,
France &amp; Italy for EMU, adding the UK for EU).

All of the EMU nations are having a hard time getting retail
sales to grow. (The EU&#8217;s UK retail sales are an exception to most of
the rest of Europe). Germany continues to look for the consumer to fill
in some gaps. But flagging confidence is an issue and the EMU
industrial sector is slowing. Fear seems to have gripped the EMU
nations as the euro has climbed in value despite policymakers extolling
European strength and flexibility, and growth has continued to be
registered. Someone is either worried about nothing or someone else is
whistling past the graveyard. Who is out of touch? Is it the consumer
whose pull back is reminiscent of the consumer in the fetal position,
or is it the policymaker who is trying to put a brave face on an ugly
situation? I report, you decide&#8230; For the moment we are in opinion-land
on this or deeply into shrink-o-nomics as we try and assess the state
of mind of the government official vs the consumer.


<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="even">
<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>Jan-08</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>Qtr-to-Date</td>
</tr>
<tr>
<td class="firstcol">Retail Trade</td>
<td>0.2%</td>
<td>0.0%</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>0.9%</td>
<td>0.8%</td>
<td>0.2%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">Food Bev &amp; Tobacco</td>
<td>0.1%</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>1.9%</td>
<td>1.7%</td>
<td>-0.3%</td>
<td>0.7%</td>
</tr>
<tr>
<td class="firstcol">Clothing&amp;Furniture</td>
<td>0.7%</td>
<td>0.2%</td>
<td>-1.5%</td>
<td>-2.6%</td>
<td>0.4%</td>
<td>0.7%</td>
<td>0.5%</td>
<td>1.7%</td>
</tr>
</tbody>
</table>
</body></html>

Italy’s retail sales edged up in January, rising by 0.2% in nominal terms, likely a decline in volume terms given the recent pace of inflation. Over the past three months, sales values fell at a 0.4% annual rate. And, overall value [...]

Italy Retail Sales and Consumer Confidence Sag

Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324g.jpg" align="left" border="0" height="265" width="353">The Japanese Economic and
Social Research Institute of the
Cabinet Office and the Policy Research Institute of the Ministry of
Finance (MOF) have surveyed industry leaders of some 15,000 firms and
analyzed their assessments and forecasts of a number of important
business trends in the current quarter, the next quarter and the
quarter after next. The results are given for large (capital of 1
billion yen and over), medium (capital of 100 million to 1 billion yen)
and small (capital of 10 to 100 million yen) businesses. For each size
group, results for all industry, manufacturing and non manufacturing
industry are given. Complete results of the survey can be found in the
Haver series BUSINESS OUTLOOK SURVEY (M0F) in the BUSINESS CYCLE
INDICATORS AND SURVEY section of the JAPAN data
base. The survey was begun in 2004, and over its short life has tended
to anticipate results of the Bank of Japan's Tankan, Japan's most
closely watched indicator of the business outlook. The next Tankan
results are due on April 1st.
The current Cabinet Office and MOF survey, which was conducted
on February 25, was released today. Among the many results of the
survey, those for the large firms are frequently high lighted. For all
industry in large firms, the pessimists exceeded optimists by 9.3 % in
their appraisal of conditions in the current quarter. In non
manufacturing industry the excess of pessimists was 7.2%, and for
manufacturing, 12.9%. These were the most pessimistic outlooks in the
short history of the measure, as can be seen in the first chart.
Similar results were shown for the assessment of large manufacturing
firms for the next quarter, as shown in the second chart. However, for
the quarter after the next, optimists prevailed. The excess of
optimists for all industry was 6.6%, for non manufacturing, 6.1% and
for manufacturing, 7.3%, as can be seen in the third chart. In general,
the appraisals for conditions in the quarter after next show an excess
of optimists over pessimists. "Hope spring eternal in the human breast,
/ Man never is, but always to be blest."
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324e.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324f.jpg" border="0" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">BUSINESS
OUTLOOK SURVEY,&nbsp; 
CABINET OFFICE &amp; MOF&nbsp;(% Balance)</th>
<th scope="col">Q1 08</th>
<th scope="col">Q4 07&nbsp;</th>
<th scope="col">Q1 07&nbsp;</th>
<th scope="col">Q/Q Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol" colspan="9">Large Firms
Current
Quarter</td>
</tr>
<tr>
<td class="firstcol">All Industry</td>
<td>-9.3</td>
<td>0.5</td>
<td>6.2</td>
<td>-9.8</td>
<td>-15.5</td>
<td>3.0</td>
<td>6.2</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>-12.9</td>
<td>5.2</td>
<td>0.1</td>
<td>-18.1</td>
<td>-13.0</td>
<td>2.7</td>
<td>6.1</td>
<td>1.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non
Manufacturing</td>
<td>-7.2</td>
<td>-2.2</td>
<td>-9.8</td>
<td>-5.0</td>
<td>-17.0</td>
<td>3.2</td>
<td>6.3</td>
<td>7.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Large Firms Next
Quarter</td>
<td>Q2 08</td>
<td>Q1 08&nbsp;</td>
<td>Q2 07&nbsp;</td>
<td>Q/Q Chg&nbsp;</td>
<td>Y/Y Chg&nbsp;</td>
<td>2006</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">All Industry</td>
<td>-2.3</td>
<td>2.4</td>
<td>4.2</td>
<td>-4.70</td>
<td>-6.5</td>
<td>8.3</td>
<td>10.3</td>
<td>7.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>-1.6</td>
<td>1.1</td>
<td>4.1</td>
<td>-2.7</td>
<td>-5.7</td>
<td>6.4</td>
<td>10.0</td>
<td>8.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non
Manufacturing</td>
<td>-2.8</td>
<td>3.2</td>
<td>4.3</td>
<td>-6.0</td>
<td>-7.1</td>
<td>7.9</td>
<td>10.5</td>
<td>8.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Large Firms&nbsp;
Quarter after Next</td>
<td>Q3 08</td>
<td>Q2 08&nbsp;</td>
<td>Q3 07&nbsp;</td>
<td>Q/Q Chg&nbsp;</td>
<td>Y/Y Chg&nbsp;</td>
<td>2006</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">All Industry</td>
<td>6.6</td>
<td>2.1</td>
<td>9.9</td>
<td>4.5</td>
<td>-3.3</td>
<td>8.4</td>
<td>10.1</td>
<td>8.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>7.3</td>
<td>1.3</td>
<td>11.8</td>
<td>6.0</td>
<td>-4.5</td>
<td>8.6</td>
<td>9.6</td>
<td>8.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non
Manufacturing</td>
<td>6.1</td>
<td>2.5</td>
<td>8.8</td>
<td>3.6</td>
<td>-2.7</td>
<td>8.4</td>
<td>10.5</td>
<td>8.6</td>
</tr>
</tbody>
</table>
</body></html>

The Japanese Economic and Social Research Institute of the Cabinet Office and the Policy Research Institute of the Ministry of Finance (MOF) have surveyed industry leaders of some 15,000 firms and analyzed their assessments and [...]

Large Japanese Business Firms Turn More Pessimistic

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324c.jpg" width="353">
The February National Activity Index (CFNAI) published by the Chicago Federal Reserve fell to its lowest level since April of 2003. At a negative 1.04 following downwardly revised readings in January and December &#39;07 the latest figure lowered the three month moving average to -0.87, its lowest level since 1Q03. That low reading 2003 was then associated with real GDP growth of 0.20% in 4Q02 and of 1.20% in 1Q03.
The Chicago Fed&#39;s release indicated &quot;an increasing likelihood that a recession has begun.&quot; A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth of roughly 3%. During the last twenty years there has been a 68% correlation between the level of the CFNAI and q/q growth in real GDP.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_march2008.pdf">here</a> and the historical data are available in Haver&#39;s Surveys database.
During February, each of the four broad categories of indicators &#151; employment, production, consumption and housing &#151; continued to make negative contributions to the CFNAI.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production &amp; income, the labor market, personal consumption &amp; housing, manufacturing &amp; trade sales, and inventories &amp; orders.
Economic Outlook Symposium: Summary of 2007 results and forecasts for 2008 from the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/publications/fedletter/cflfebruary2008_247.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/SURVEYS/@S5/@S503/@S503.HTM">Chicago Fed</a></th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">February &#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">CFNAI</td>
<td>-1.04</td>
<td>-0.68</td>
<td>-0.28</td>
<td>-0.44</td>
<td>0.01</td>
<td>0.28</td>
</tr>
</tbody>
</table>
</body>
</html>

The February National Activity Index (CFNAI) published by the Chicago Federal Reserve fell to its lowest level since April of 2003. At a negative 1.04 following downwardly revised readings in January and December '07 the latest figure [...]

Chicago Fed Index So Low Perhaps Indicates Recession

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324a.jpg" width="353">
According to the National Association of Realtors, existing home sales in February rose 2.9% m/m to 5.030M from an unrevised January level which fell 0.4%. The rise contrasted with Consensus expectations for a slight decline.
There has been, however, a change from past sales patterns. The downward momentum behind last year&#39;s declines in home sales has flattened out. Home sales were essentially unchanged during the last three months following double digit rates of decline during all of last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324b.jpg" width="353">
Sales of existing single family homes also rose by 2.8% last month and that followed a 0.7% January uptick.
By region, February home sales in the Northeast rose 11.3% (-26.4% y/y) and recouped all of the declines during the prior two months. In the Midwest February sales rose 2.5% for the second consecutive monthly increase while sales in the South rose a modest 2.1%. That flattening pattern even extends out West. Though sales fell 1.1% in February, the three month rate of decline moderated to -5.2% from -21.4% as of last October.
A flattening of last year&#39;s price decline, however, has not occurred. The median price of an existing home fell 1.9% (-8.2% y/y) last month after a downwardly revised 5.3% January drop. Home prices were off 14.5% in February from their peak last June.
The number of unsold homes on the market continued to fall last month. The 3.0% m/m decline pulled the stock down 11.6% from the peak last July. At the current low sales rate, however, that inventory still amounts to a 9.6 months supply which is barely down from last year&#39;s peak. For single family homes there is a 9.2 months supply at the current sales rate and for condos and co-ops there is a 13.0 months supply.
Walking a tightrope into 2008 from the Federal Reserve Bank of St. Louis can be found <a href="http://stlouisfed.org/publications/re/2008/a/pdf/tightrope.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 Single Family Home Sales (Thous)</th>
<th scope="col">February</th>
<th scope="col">y/y %</th>
<th scope="col">January</th>
<th scope="col">February &#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>5,030</td>
<td>-23.8</td>
<td>4,890</td>
<td>6,600</td>
<td>5,672</td>
<td>6,508</td>
<td>7,076</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>890</td>
<td>-26.4</td>
<td>800</td>
<td>1,210</td>
<td>1,008</td>
<td>1,090</td>
<td>1,168</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,240</td>
<td>-19.5</td>
<td>1,210</td>
<td>1,540</td>
<td>1,331</td>
<td>1,491</td>
<td>1,589</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>1,990</td>
<td>-22.0</td>
<td>1,950</td>
<td>2,550</td>
<td>2,240</td>
<td>2,576</td>
<td>2,704</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>920</td>
<td>-29.2</td>
<td>930</td>
<td>1,300</td>
<td>1,093</td>
<td>1,353</td>
<td>1,617</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,470</td>
<td>-22.9</td>
<td>4,350</td>
<td>5,590</td>
<td>4,958</td>
<td>5,703</td>
<td>6,181</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>195,900</td>
<td>-8.2</td>
<td>199,7000</td>
<td>213,500</td>
<td>216,617</td>
<td>222,000</td>
<td>218,217</td>
</tr>
</tbody>
</table>
</body>
</html>

According to the National Association of Realtors, existing home sales in February rose 2.9% m/m to 5.030M from an unrevised January level which fell 0.4%. The rise contrasted with Consensus expectations for a slight decline. There [...]

U.S. Existing Home Sales Rose Slightly. Momentum Changing?

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324a.jpg" align="left" border="0" height="265" width="353">
According to the National Association of Realtors, existing
home sales in February rose 2.9% m/m to 5.030M from an unrevised
January level which fell 0.4%. The rise contrasted with Consensus
expectations for a slight decline.
There has been, however, a change from past sales patterns.
The downward momentum behind last year's declines in home sales has
flattened out. Home sales were essentially unchanged during the last
three months following double digit rates of decline during all of last
year.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324b.jpg" align="right" border="0" height="265" width="353">
Sales of existing single family homes also rose by 2.8% last
month and that followed a 0.7% January uptick.
By region, February home sales in the Northeast rose 11.3%
(-26.4% y/y) and recouped all of the declines during the prior two
months. In the Midwest February sales rose 2.5% for the second
consecutive monthly increase while sales in the South rose a modest
2.1%. That flattening pattern even extends out West. Though sales fell
1.1% in February, the three month rate of decline moderated to -5.2%
from -21.4% as of last October.
A flattening of last year's price decline, however, has not
occurred. The median price of an existing home fell 1.9% (-8.2% y/y)
last month after a downwardly revised 5.3% January drop. Home prices
were off 14.5% in February from their peak last June.
The number of unsold homes on the market continued to fall
last month. The 3.0% m/m decline pulled the stock down 11.6% from the
peak last July. At the current low sales rate, however, that inventory
still amounts to a 9.6 months supply which is barely down from last
year's peak. For single family homes there is a 9.2 months supply at
the current sales rate and for condos and co-ops there is a 13.0 months
supply.
Walking a tightrope into 2008 from the
Federal Reserve Bank of St. Louis can be found <a href="http://stlouisfed.org/publications/re/2008/a/pdf/tightrope.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
Single Family 
Home Sales (Thous)</th>
<th scope="col">February</th>
<th scope="col">y/y %</th>
<th scope="col">January</th>
<th scope="col">February '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>5,030</td>
<td>-23.8</td>
<td>4,890</td>
<td>6,600</td>
<td>5,672</td>
<td>6,508</td>
<td>7,076</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>890</td>
<td>-26.4</td>
<td>800</td>
<td>1,210</td>
<td>1,008</td>
<td>1,090</td>
<td>1,168</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,240</td>
<td>-19.5</td>
<td>1,210</td>
<td>1,540</td>
<td>1,331</td>
<td>1,491</td>
<td>1,589</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>1,990</td>
<td>-22.0</td>
<td>1,950</td>
<td>2,550</td>
<td>2,240</td>
<td>2,576</td>
<td>2,704</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>920</td>
<td>-29.2</td>
<td>930</td>
<td>1,300</td>
<td>1,093</td>
<td>1,353</td>
<td>1,617</td>
</tr>
<tr class="odd">
<td class="firstcol">Single-Family</td>
<td>4,470</td>
<td>-22.9</td>
<td>4,350</td>
<td>5,590</td>
<td>4,958</td>
<td>5,703</td>
<td>6,181</td>
</tr>
<tr>
<td class="firstcol">Median Price, Total, $</td>
<td>195,900</td>
<td>-8.2</td>
<td>199,7000</td>
<td>213,500</td>
<td>216,617</td>
<td>222,000</td>
<td>218,217</td>
</tr>
</tbody>
</table>
Chicago Fed Index So Low Perhaps
Indicates Recession 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 24, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324c.jpg" align="left" border="0" height="265" width="353">
The February National Activity Index (CFNAI) published by the
Chicago Federal Reserve fell to its lowest level since April of 2003.
At a negative 1.04 following downwardly revised readings in January and
December '07 the latest figure lowered the three month moving average
to -0.87, its lowest level since 1Q03. That low reading 2003 was then
associated with real GDP growth of 0.20% in 4Q02 and of 1.20% in 1Q03.
The Chicago Fed's release indicated "an increasing
likelihood that a recession has begun." A zero value of the
CFNAI indicates that the economy is expanding at its historical trend
rate of growth of roughly 3%. During the last twenty years there has
been a 68% correlation between the level of the CFNAI and q/q growth in
real GDP.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_march2008.pdf">here</a>
and the historical data are available in Haver's Surveys
database.
During February, each of the four broad categories of
indicators &#8212; employment, production, consumption and housing &#8212;
continued to make negative contributions to the CFNAI.
The CFNAI is a weighted average of 85 indicators of economic
activity. The indicators reflect activity in the following categories:
production &amp; income, the labor market, personal consumption
&amp; housing, manufacturing &amp; trade sales, and inventories
&amp; orders.
Economic Outlook Symposium: Summary of 2007 results
and forecasts for 2008 from the Federal Reserve Bank of
Chicago can be found <a href="http://www.chicagofed.org/publications/fedletter/cflfebruary2008_247.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/SURVEYS/@S5/@S503/@S503.HTM">Chicago
Fed</a></th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">February '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-1.04</td>
<td>-0.68</td>
<td>-0.28</td>
<td>-0.44</td>
<td>0.01</td>
<td>0.28</td>
</tr>
</tbody>
</table>
Large Japanese Business
Firms Turn More Pessimistic 
by <a href="/comment/Curley.html">Louise
Curley</a> March 24, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324g.jpg" align="left" border="0" height="265" width="353">
The Japanese Economic and Social Research Institute of the
Cabinet Office and the Policy Research Institute of the Ministry of
Finance (MOF) have surveyed industry leaders of some 15,000 firms and
analyzed their assessments and forecasts of a number of important
business trends in the current quarter, the next quarter and the
quarter after next. The results are given for large (capital of 1
billion yen and over), medium (capital of 100 million to 1 billion yen)
and small (capital of 10 to 100 million yen) businesses. For each size
group, results for all industry, manufacturing and non manufacturing
industry are given. Complete results of the survey can be found in the
Haver series BUSINESS OUTLOOK SURVEY (M0F) in the BUSINESS CYCLE
INDICATORS AND SURVEY section of the JAPAN data
base. The survey was begun in 2004, and over its short life has tended
to anticipate results of the Bank of Japan's Tankan, Japan's most
closely watched indicator of the business outlook. The next Tankan
results are due on April 1st.
The current Cabinet Office and MOF survey, which was conducted
on February 25, was released today. Among the many results of the
survey, those for the large firms are frequently high lighted. For all
industry in large firms, the pessimists exceeded optimists by 9.3 % in
their appraisal of conditions in the current quarter. In non
manufacturing industry the excess of pessimists was 7.2%, and for
manufacturing, 12.9%. These were the most pessimistic outlooks in the
short history of the measure, as can be seen in the first chart.
Similar results were shown for the assessment of large manufacturing
firms for the next quarter, as shown in the second chart. However, for
the quarter after the next, optimists prevailed. The excess of
optimists for all industry was 6.6%, for non manufacturing, 6.1% and
for manufacturing, 7.3%, as can be seen in the third chart. In general,
the appraisals for conditions in the quarter after next show an excess
of optimists over pessimists. "Hope spring eternal in the human breast,
/ Man never is, but always to be blest."<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324e.jpg" align="left" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324f.jpg" align="right" border="0" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">BUSINESS
OUTLOOK SURVEY,
CABINET OFFICE &amp; MOF&nbsp;(% Balance)</th>
<th scope="col">Q1 08</th>
<th scope="col">Q4 07&nbsp;</th>
<th scope="col">Q1 07&nbsp;</th>
<th scope="col">Q/Q Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol" colspan="9">Large
Firms Current
Quarter</td>
</tr>
<tr>
<td class="firstcol">All Industry</td>
<td>-9.3</td>
<td>0.5</td>
<td>6.2</td>
<td>-9.8</td>
<td>-15.5</td>
<td>3.0</td>
<td>6.2</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>-12.9</td>
<td>5.2</td>
<td>0.1</td>
<td>-18.1</td>
<td>-13.0</td>
<td>2.7</td>
<td>6.1</td>
<td>1.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non
Manufacturing</td>
<td>-7.2</td>
<td>-2.2</td>
<td>-9.8</td>
<td>-5.0</td>
<td>-17.0</td>
<td>3.2</td>
<td>6.3</td>
<td>7.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Large Firms Next
Quarter</td>
<td>Q2 08</td>
<td>Q1 08&nbsp;</td>
<td>Q2 07&nbsp;</td>
<td>Q/Q Chg&nbsp;</td>
<td>Y/Y Chg&nbsp;</td>
<td>2006</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">All Industry</td>
<td>-2.3</td>
<td>2.4</td>
<td>4.2</td>
<td>-4.70</td>
<td>-6.5</td>
<td>8.3</td>
<td>10.3</td>
<td>7.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>-1.6</td>
<td>1.1</td>
<td>4.1</td>
<td>-2.7</td>
<td>-5.7</td>
<td>6.4</td>
<td>10.0</td>
<td>8.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non
Manufacturing</td>
<td>-2.8</td>
<td>3.2</td>
<td>4.3</td>
<td>-6.0</td>
<td>-7.1</td>
<td>7.9</td>
<td>10.5</td>
<td>8.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Large Firms&nbsp;
Quarter after Next</td>
<td>Q3 08</td>
<td>Q2 08&nbsp;</td>
<td>Q3 07&nbsp;</td>
<td>Q/Q Chg&nbsp;</td>
<td>Y/Y Chg&nbsp;</td>
<td>2006</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">All Industry</td>
<td>6.6</td>
<td>2.1</td>
<td>9.9</td>
<td>4.5</td>
<td>-3.3</td>
<td>8.4</td>
<td>10.1</td>
<td>8.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing</td>
<td>7.3</td>
<td>1.3</td>
<td>11.8</td>
<td>6.0</td>
<td>-4.5</td>
<td>8.6</td>
<td>9.6</td>
<td>8.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non
Manufacturing</td>
<td>6.1</td>
<td>2.5</td>
<td>8.8</td>
<td>3.6</td>
<td>-2.7</td>
<td>8.4</td>
<td>10.5</td>
<td>8.6</td>
</tr>
</tbody>
</table>
Italy Retail Sales and Consumer
Confidence
Sag
 
by <a href="/comment/Brusca.html">Robert
Brusca</a> March 24, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080324d.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s retail sales edged up in January, rising by 0.2% in
nominal terms, likely a decline in volume terms given the recent pace
of inflation. Over the past three months, sales values fell at a 0.4%
annual rate. And, overall value growth has been eroding ever so
slightly over this period. In the first quarter of 2008 value growth is
up at a 0.5% annual pace and at a stronger 0.7% pace for food,
beverages and tobacco &#8211; both likely representing volume declines.

The chart at the top shows the ISAE consumer sentiment index
plotted against retail sales Yr/Yr. Notice that the ISAE index plotted
in its raw levels format tends to lead the Yr/Yr decline in retail
sales: Sentiment peaks first and rebounds first. It gives reasonably
good signals about what retail sales are about to do. In the recent
period the weak consumer sentiment readings are pointed to further
weakness in Italy&#8217;s already weak retail sales.

Italy&#8217;s HICP is rising at a 2.9% pace in Q1 (also through
January) and its core is up at a 1.5% pace. But in terms of Italy&#8217;s own
domestic inflation indicator (NIC) inflation is at a 5% pace in the
first quarter or 4.6% excluding tobacco (NIC ex-tobacco). Food prices
alone in Italy are up at a 5.8% pace in Q1.

As in the table above these inflation statistics for the first
quarter growth rates take the January level over the Q4 average
(centered in November) and compound that pace. Italy&#8217;s Q1 inflation
calculated on that same basis produces some dismal implicit estimates
of &#8216;retail sales growth (-2.5% to -4.5% depending on the deflator
used). Inflation is clearly outstripping the nominal growth rates for
sales in these comparisons by a wide margin. Italy is the most severely
impacted economy of the EMU Big Three or EU Big Four (i.e. Germany,
France &amp; Italy for EMU, adding the UK for EU).

All of the EMU nations are having a hard time getting retail
sales to grow. (The EU&#8217;s UK retail sales are an exception to most of
the rest of Europe). Germany continues to look for the consumer to fill
in some gaps. But flagging confidence is an issue and the EMU
industrial sector is slowing. Fear seems to have gripped the EMU
nations as the euro has climbed in value despite policymakers extolling
European strength and flexibility, and growth has continued to be
registered. Someone is either worried about nothing or someone else is
whistling past the graveyard. Who is out of touch? Is it the consumer
whose pull back is reminiscent of the consumer in the fetal position,
or is it the policymaker who is trying to put a brave face on an ugly
situation? I report, you decide&#8230; For the moment we are in opinion-land
on this or deeply into shrink-o-nomics as we try and assess the state
of mind of the government official vs the consumer.


<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="even">
<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>Jan-08</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>Qtr-to-Date</td>
</tr>
<tr>
<td class="firstcol">Retail Trade</td>
<td>0.2%</td>
<td>0.0%</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>0.9%</td>
<td>0.8%</td>
<td>0.2%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">Food Bev &amp; Tobacco</td>
<td>0.1%</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>1.9%</td>
<td>1.7%</td>
<td>-0.3%</td>
<td>0.7%</td>
</tr>
<tr>
<td class="firstcol">Clothing&amp;Furniture</td>
<td>0.7%</td>
<td>0.2%</td>
<td>-1.5%</td>
<td>-2.6%</td>
<td>0.4%</td>
<td>0.7%</td>
<td>0.5%</td>
<td>1.7%</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/080321e.jpg" align="left" border="0" height="265" width="353">
The chart on the left shows that consumer confidence has been
weaker briefly in 2004 and then again back in 1994. But at the pace
that confidence is falling it may be there soon. Italy&#8217;s Sentiment
indicator is in the bottom 6% of its range since 1999 but it is not far
from its recession low in 1994 and it is still plunging. A number of
components are on lows for this period. In 1998 a number of the
components cease to be available even though the headline and other
component measures do go back further in time. Still, it is clear from
the longer-horizon chart as well as from the shorter-horizon table that
looks only at a recovery period that the current responses by survey
participants are not much like those in expansion periods and are
getting to look more like they do in downturns. Other Euro area
countries may be more resilient but Italy is fighting to maintain its
growth. Unemployment expectations are in the top 8% of where they have
been since the start of 1999. The household past, current and future
financial situations all are rated as the worst in this period since
1999. The overall situation is in the bottom 6%; only 17 percent of
respondents think it&#8217;s a good time to make a major purchase. See the
table, the percentile rankings are telling.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col"> Italy
ISAE Consumer Confidence</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="6">Since January 1999</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Mar 08</td>
<td>Feb 08</td>
<td>Jan 08</td>
<td>Dec 07</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Confidence</td>
<td>99</td>
<td>102.8</td>
<td>102.2</td>
<td>106.7</td>
<td>6.1</td>
<td>108</td>
<td>127</td>
<td>97</td>
<td>30</td>
<td>111</td>
</tr>
<tr>
<td class="firstcol" colspan="11">Last
12 months</td>
</tr>
<tr class="odd">
<td class="firstcol">OVERALL SITUATION</td>
<td>-84</td>
<td>-76</td>
<td>-79</td>
<td>-69</td>
<td>0.0</td>
<td>111</td>
<td>-22</td>
<td>-84</td>
<td>62</td>
<td>-55</td>
</tr>
<tr class="odd">
<td class="firstcol">PRICE TRENDS</td>
<td>-17.5</td>
<td>-18</td>
<td>-23</td>
<td>-21.5</td>
<td>40.8</td>
<td>61</td>
<td>4</td>
<td>-32</td>
<td>36</td>
<td>-15</td>
</tr>
<tr>
<td class="firstcol" colspan="11">Next
12months</td>
</tr>
<tr class="odd">
<td class="firstcol">OVERALL SITUATION</td>
<td>-35</td>
<td>-31</td>
<td>-39</td>
<td>-35</td>
<td>6.3</td>
<td>108</td>
<td>24</td>
<td>-39</td>
<td>63</td>
<td>-13</td>
</tr>
<tr class="odd">
<td class="firstcol">PRICE TRENDS</td>
<td>23</td>
<td>22</td>
<td>24.5</td>
<td>28</td>
<td>38.1</td>
<td>55</td>
<td>49</td>
<td>7</td>
<td>42</td>
<td>24</td>
</tr>
<tr class="odd">
<td class="firstcol">UNEMPLOYMENT</td>
<td>6</td>
<td>5</td>
<td>-2</td>
<td>4</td>
<td>92.3</td>
<td>6</td>
<td>9</td>
<td>-30</td>
<td>39</td>
<td>-5</td>
</tr>
<tr class="odd">
<td class="firstcol">HOUSEHOLD BUDGET</td>
<td>-2</td>
<td>-3</td>
<td>1</td>
<td>9</td>
<td>2.8</td>
<td>110</td>
<td>33</td>
<td>-3</td>
<td>36</td>
<td>14</td>
</tr>
<tr>
<td class="firstcol" colspan="11">HOUSEHOLD
FIN SITUATION</td>
</tr>
<tr class="odd">
<td class="firstcol">Last 12 months</td>
<td>-55</td>
<td>-53</td>
<td>-46</td>
<td>-44</td>
<td>0.0</td>
<td>111</td>
<td>-7</td>
<td>-55</td>
<td>48</td>
<td>-29</td>
</tr>
<tr class="odd">
<td class="firstcol">Next12 months</td>
<td>-16</td>
<td>-12</td>
<td>-14</td>
<td>-14</td>
<td>0.0</td>
<td>111</td>
<td>14</td>
<td>-16</td>
<td>30</td>
<td>-1</td>
</tr>
<tr>
<td class="firstcol" colspan="11">HOUSEHOLD
SAVINGS</td>
</tr>
<tr class="odd">
<td class="firstcol">Current</td>
<td>54</td>
<td>61</td>
<td>53</td>
<td>60</td>
<td>79.1</td>
<td>11</td>
<td>63</td>
<td>20</td>
<td>43</td>
<td>39</td>
</tr>
<tr class="odd">
<td class="firstcol">Future</td>
<td>-45</td>
<td>-42</td>
<td>-35</td>
<td>-37</td>
<td>0.0</td>
<td>111</td>
<td>-9</td>
<td>-45</td>
<td>36</td>
<td>-23</td>
</tr>
<tr>
<td class="firstcol" colspan="11">MAJOR
Purchases</td>
</tr>
<tr class="odd">
<td class="firstcol">Current</td>
<td>-50</td>
<td>-44</td>
<td>-42</td>
<td>-47</td>
<td>16.7</td>
<td>89</td>
<td>-15</td>
<td>-57</td>
<td>42</td>
<td>-40</td>
</tr>
<tr class="odd">
<td class="firstcol">Future</td>
<td>-65</td>
<td>-61</td>
<td>-53</td>
<td>-61</td>
<td>25.8</td>
<td>65</td>
<td>-42</td>
<td>-73</td>
<td>31</td>
<td>-62</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Total
number of months:111</td>
</tr>
</tbody>
</table>
</body></html>

The chart on the left shows that consumer confidence has been weaker briefly in 2004 and then again back in 1994. But at the pace that confidence is falling it may be there soon. Italy’s Sentiment indicator is in the bottom 6% of its [...]

Italy’s Consumer Confidence Erodes

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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?

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

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Sandy Batten

250617V0.jpg

250617W0.jpg

Total retail sales slumped 0.9% m/m (+3.3% y/y) in May following a downwardly revised 0.1% monthly decline in April (previously +0.1% m/m). The May decline was led by a 3.5% m/m (+2.5% y/y) drop in motor vehicle and parts sales and a 2.0% m/m (-6.9% y/y) price-related decline in sales at gasoline stations. This was the fourth consecutive monthly decline in gasoline sales. Sales excluding autos fell 0.3% m/m (+3.5% y/y) in May after a downwardly revised unchanged reading in April (previously +0.1% m/m). The Action Economics Forecast Survey looked for total sales to fall 0.6% m/m in May and for sales ex autos to rise 0.2% m/m. Sales excluding autos and gasoline slipped 0.1% m/m in May after a 0.1% m/m increase in April.

On a more positive note, sales in the retail control group, which excludes autos, building materials, gasoline and food services, rebounded 0.4% m/m (5.0% y/y) in May after an upwardly revised 0.1% m/m decline in April (previously -0.2% m/m). These sales are used in the construction of personal consumption expenditures in the NIPA accounts. While these sales slowed in April and May from a relatively strong February and March, the April/May average is still 2.9% at an annual rate above the Q1 average, providing a solid foundation for Q2 PCE.

By category, in addition to declines in auto and gasoline sales, building material and garden equipment sales slumped 2.7% m/m, their first monthly decline in three months. Sales at food service and drinking places declined 0.9% m/m, their first monthly decline in three months. Sales at electronics and appliance stores fell 0.6% m/m, their first decline in four months. In contrast, sales at furniture stores continued to rise, increasing 1.2% m/m, their fourth consecutive monthly gain. Sales at sporting goods, etc. stores rose 1.3% m/m but failed to offset a 3.0% m/m decline in April. Sales at nonstore retailers rose 0.9% m/m in May for their fourth consecutive monthly gain. Miscellaneous store sales jumped 2.9% m/m.

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economic Forecast Survey in **AS1REPNA**.

250617X0.jpg

250617Y0.jpg

- Sales fell a more-than-expected 0.9% m/m, led by a 3.5% decline in motor vehicle sales and a 2.0% drop in gasoline store sales.
- Sales excluding autos unexpectedly fell 0.3% m/m.
- In contrast, sales in the control group (used to estimate PCE) rebounded 0.4% m/m.

U.S. Retail Sales Fell More than Expected in May 2025

250617J1.jpg

250617K1.jpg

Import prices were unchanged during May after rising 0.1% in April, and falling 0.4% in March, according to the Bureau of Labor Statistics. A 0.3% decline had been expected in the Action Economics Forecast Survey. The year-on-year increase picked up to 0.2% but remained below the recent high of 2.2% in December. Export prices fell 0.9% during May after an unrevised 0.1% April gain. A 0.2% decline had been expected. The y/y rise eased to 1.7% from 1.9% in April and was the slowest gain since November.

The steady import price index in May included a 4.0% drop (-15.8% y/y) in imported fuel prices, the third consecutive month of sharp decline. The decline in imported fuel costs reflected a 9.0% fall (+88.4% y/y) in natural gas, a 2.7% drop (-18.8% y/y) in fuel oil costs, a 3.7% decline (-17.4% y/y) in petroleum & petroleum products and a 5.4% drop (-17.1% y/y) in crude oil prices. Nonfuel import prices fell 0.2% (+7.7% y/y) in May following a 17% April increase. Import prices for nonfuel industrial supplies & materials rose 1.3% (5.4% y/y) and capital goods rose 0.2% (1.1% y/y), but foods, feeds & beverages prices declined 0.3% (+6.9% y/y). Import prices for automotive vehicles & parts edged 0.1% higher (1.1% y/y) and consumer goods excluding autos increased 0.2% (-0.7% y/y) after rising 0.3% in April.

The May decline in export prices reflected a 1.0% (1.7% y/y) drop in nonagricultural prices following a 0.1% dip. Petroleum & petroleum product prices fell 3.8% (-11.4% y/y). Industrial supplies & materials export prices dropped 2.9% (+1.0% y/y) in May, down for the third straight month. In contrast, agricultural export prices rose 0.2% (1.8%) following a 0.4% gain in April. The cost of capital goods rose 0.4% (1.9% y/y) after two straight 0.3% increases. Prices of consumer goods excluding autos rose 0.2% (1.4% y/y) after a 0.7% rise, while automotive vehicles & parts prices rose 0.2% (2.7% y/y) following a 0.9% April gain. Foods, feeds & beverages prices rose 0.3% (3.1% y/y) after increasing 0.4% in April.

These import and export price series are not seasonally adjusted; they can be found in Haver’s **USECON** database. Detailed figures are available in the **USINT** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

250617M1.jpg

- Sharp decline in imported fuel costs is offset by increases in other products.
- Export price decline reflects lower petroleum prices.

U.S. Import Prices Hold Steady in May While Export Prices Decline

250617F4.jpg

250617G4.jpg

Total business inventories were unchanged in April from March (+2.2% y/y) after having inched up 0.1% m/m in March. The Action Economics Forecast Survey had anticipated an unchanged reading. Manufacturing inventories edged down 0.1% m/m (+0.9% y/y) following five consecutive monthly gains. Retail inventories were essentially unchanged (-0.03% m/m) after having declined in three of the four previous months. In contrast, wholesale inventories rose 0.2% m/m (2.3% y/y) in April for their fourth consecutive monthly gain.

Drilling down into retail inventories, auto inventories declined 0.8% m/m in April for their sixth consecutive monthly fall. Retail inventories excluding autos increased 0.3% m/m for their fourth consecutive monthly gain. General merchandise store inventories fell 0.3% m/m, their second decline in the past three months. Inventories increased in all other major retail categories, led by a 1.0% m/m increase in food and beverage store inventories. Inventories at building materials and garden equipment stores rose 0.8% m/m following two consecutive monthly declines. Furniture store inventories increased 0.4% m/m, their third monthly increase in the past four months.

Total business sales slipped 0.1% m/m (+3.8% y/y) in April, their first monthly decline in three months. Wholesale sales edged up 0.1% (6.0% y/y), their third consecutive monthly rise. Factory sales fell 0.3% m/m (+0.6% y/y) on top of a 0.2% monthly decline in March. Retail sales decreased 0.2% m/m (+4.7% y/y) in April though in a separate report also released today, retail sales slumped 0.9% m/m in May, led by declines in auto and gasoline sales.

With the little change in both sales and inventories in April, the inventory/sales (I/S) ratio was unchanged after having fallen in four of the five previous months. The 1.38 reading in April tied the reading in the previous month as the lowest one since September 2023. The I/S ratios for retailers and wholesalers were also unchanged in April from March while the manufacturing I/S ratio increased 0.6% m/m.

The manufacturing and trade data are in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

250617H4.jpg

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- Total inventories were unchanged in April from March.
- Wholesale inventories rose for the fourth consecutive month while retail and factory inventories slipped.
- Sales edged down 0.1% m/m, the first monthly decline in three months, with declines in both factory and retail sales.
- With little change in both sales and inventories, the inventories/sales ratio was unchanged in April following two consecutive monthly declines.

U.S. Business Inventories Unchanged in April as Sales Slipped

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The National Association for Business Economics expects that following a 2.8% gain in 2024, real GDP growth will slow to 1.3% this year, revised from 1.9% in the June survey and 1.4% in 2026, revised from 2.0%. Growth from Q4-to-Q4 is expected to slow to 0.7% in 2025 from 2.5% in 2024, then rise a minimally changed 1.9% next year. Quarterly GDP is expected to grow 0.6% in Q3’25 and 0.9% in Q4. In the first two quarters of 2026, real growth of 1.6% followed by 1.8% is expected, followed by 2.0% in both Q3’26 and Q4’26.

Real growth in personal consumption expenditures was reduced. Expected PCE growth in 2025 was shaved to 2.3% from 2.8%, and reduced to 1.4% from 2.8% in 2026. The projection for business fixed investment growth was little-changed at 1.6% this year followed by 0.9% in 2026. An expected 0.5% gain in residential fixed investment this year has been reduced from 1.1%, followed by 0.9% growth in 2026, reduced substantially from 2.4%. Government spending growth of 1.3% this year compares to 1.7% projected earlier, and 0.5% growth in 2026 lessened from 0.8%.

The net export deficit is expected to widen to $1.204 trillion in 2025, revised from $1.118, then narrow to $1.085 trillion in 2026, revised from $1.150 trillion expected earlier. Exports should increase 1.1% this year, revised from 2.3% expected earlier, then 1.6% in 2026, revised from 2.0%. Imports are projected to rise 4.7% in 2025, revised from 4.0%, then fall 0.9% in 2026, down sharply from up 1.7% as expected earlier. Inventory accumulation should rise this year to little-revised $55.0 from $39 billion in 2024, then ease to $40.0 billion in 2026, revised from $52.0 billion expected earlier.

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Housing starts are expected to steady at 1.36 million, then rise to 1.39 million in 2026, revised from 1.40 million. They have been trending lower since the 2021 peak of 1.60 million. Light vehicle sales should ease to 15.5 million units, revised from 16.0. then improve to 15.5 million next year, revised from 16.2 million. The average gain in payroll employment should soften to 91 million per month in the current year, revised from 115,000, then increase to 99,000 in 2026, revised from 125,000. Payrolls increased 216,000 in 2023. The unemployment rate in 2025 has been nudged up to 4.4% from 4.3% projected earlier. The jobless rate is now expected to rise to 4.7% in 2026, revised from 4.3%.

Inflation pressures are expected to eventually abate. After falling in 2024 to 2.7% (Q4/Q4), the increase in the CPI is forecast to first rise to 3.4% this year, revised from 3.0%, then fall to 2.6% in 2026, revised from 2.5% a 2.7%. These increases compare to a 7.1% rise in 2022. Price inflation, as measured by the PCE chain price index, is expected to rise to 3.1% in 2025, revised from 2.3%, then fall to an unrevised 2.3% in 2026. It hit 6.0% in 2022. The gain in the chain PCE price index excluding food & energy is projected to rise to 3.1% this year, revised from 2.8%, then fall to 2.4% in 2026. The index rose to its high of 5.2% in 2022. The projected cost of crude oil of $65 per barrel compares to $70 projected earlier. The $68 per barrel at the end of next year compares to $66 expected earlier, and $70 per barrel at the end of 2024.

Long-term interest rates are expected to ease. The forecast of 4.19% at the end of this year compares to 4.23% expected earlier, with 4.00% forecast at the end of next year compared to 4.06% previously projected. The Fed is expected to continue its easing of monetary policy. The Federal funds rate is forecast to decline to 3.88% at the end of 2025 from 4.37% at the end of 2024, then fall to an unrevised 3.38% by the end of 2026. After-tax corporate profits are predicted to rise 2.1% this year, revised from 2.7%, and a minimally-changed 3.3% next year.

The figures from the latest NABE report can be found in Haver's **SURVEYS** database.

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- Consumer spend growth is reduced.
- Business investment growth unchanged.
- Price inflation is forecast to pick up, then moderate.

NABE Forecasts Sharply Reduced Growth for 2025 & 2026

Winnie Tapasanun

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The Empire State Manufacturing Index of General Business Conditions decreased to -16.0 in June, down from -9.2 in May and -8.1 in April, according to the Empire State Manufacturing Survey released by the Federal Reserve Bank of New York. A reading of -6.0 for June had been expected in the Action Economics Forecast Survey. The unexpected decrease in the June index indicated that the business activity in New York State contracted for the fifth time in six months and to the lowest level since March; it was also down from -7.7 in June 2024. The percentage of respondents reporting an increase in general business conditions was 16.9% in June, down from 28.3% in May; the percentage reporting a decrease was 32.9%, down from May’s 37.5%. The latest survey was conducted between June 2 and June 9.

The headline index reflects the answer to a single question concerning the state of economic activity. Haver Analytics calculates a composite index from the five major components, which is comparable to the ISM manufacturing index. This calculated index dropped to 48.6 in June, down from 51.1 in May and 49.3 in April, indicating contraction for the third month in four and to the lowest level since October. It was up from 48.5 in June 2024 and a low of 42.5 in January 2024; however, registering below 50, the breakeven point between expansion and contraction. The index is the average of five diffusion indexes: new orders, shipments, employment, supplier deliveries and inventories with equal weights (20% each).

In the latest survey, the new orders index dropped to -14.2 in June after a 15.8-point jump to 7.0 in May, indicating new orders contracted for the third time in four months and to the lowest level since March; nevertheless, it was an improvement from a low of -35.0 in January 2024. The shipments index slid to a three-month-low -7.2 in June following a 6.4-point rise to 3.5 in May, but it was up from a low of -22.7 in April 2024. The unfilled orders index decreased to -8.3 in June after a 0.7-point increase to 4.8 in May, indicating unfilled orders contracted this month following two successive months of expansion; the index reached a low of -24.2 in January 2024. The inventories index fell to 0.9 in June after a 2.6-point decline to 4.8 in May, suggesting that inventories expanded at the slowest pace in eight straight months of expansion. Meanwhile, the delivery times index increased to 1.8 in June, the highest reading since February, from 1.0 in May, with 14.7% of respondents reporting higher delivery times and 12.8% of respondents reporting lower delivery times.

On the labor front, the number of employees index rebounded to a positive 4.7 in June after a 2.5-point decline to -5.1 in May, showing employment expanded for the first time since January and at the highest level since December 2022. The index was up from a low of -9.7 in December 2023. A higher 14.6% of respondents reported an increase in employment in June while a lessened 9.9% reported a decline. The average workweek index increased to -1.5 in June, the highest reading since February, from -3.4 in May; however, having remained in negative territory for the seventh consecutive month.

Inflation indicators were mixed this month. The prices paid index dropped to 46.8 in June, the lowest level since March, following an 8.2-point rise to 59.0 in May. The index was up from its recent low of 21.1 in December and a low of 16.7 in December 2023 but significantly down from a high of 86.4 in April 2022. A 49.5% of respondents reported higher prices paid in June while only 2.8% reported lower prices paid. The prices received index rose to 26.6 in June following a 5.8-point drop to 22.9 in May. The index was up from its recent low of 4.2 in December and a low of 3.9 in July 2023 but well below a peak of 56.1 in March 2022. An increased 29.4% of respondents reported higher prices received in June while a lessened 2.8% reported lower prices received.

Firms grew optimistic about the future business outlook in the latest survey. The index for future business conditions jumped to 21.2 in June, the highest reading since February, from -2.0 in May and a near-record-low -7.4 in April, with an increased 38.4% of respondents expecting business conditions to improve in the next six months. Future new orders (26.1 vs. -2.7) and shipments (23.0 vs. -3.4) expanded in June after contracting in May. Growth in employment (10.4 vs. 11.6) weakened slightly in June vs. May but still showed continued expansion. Capital spending plans remained soft, with expectations for capital spending falling to -7.3 in June, the lowest reading since May 2020, from -6.7 in May. Expected prices paid fell to 59.6 in June, the lowest level since March, from 66.7 in May, while expected prices received rebounded to 41.3 from May’s five-month-low 35.2.

The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components. The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease with zero separating expansion from contraction.

The New York Fed survey data are contained in Haver’s **SURVEYS** database. The expectations series is in Haver’s **AS1REPNA** database.

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- June General Business Conditions Index down 6.8 pts. to -16.0.
- Negative numbers for new orders (-14.2), shipments (-7.2), and unfilled orders (-8.3), but positive readings for employment (4.7, highest since Dec. ’22) and inventories (0.9).
- Current prices paid drops 12.2 pts. to a three-month-low 46.8.
- Firms are optimistic about the future business outlook, w/ Future Business Conditions Index up to a four-month-high 21.2 and future prices paid down to a three-month-low 59.6.

Economy in Brief: March 2008

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Consumer Confidence Fell Sharply

Consumer Confidence Fell Sharply

Italy Retail Sales and Consumer Confidence Sag

Large Japanese Business Firms Turn More Pessimistic

Chicago Fed Index So Low Perhaps Indicates Recession

U.S. Existing Home Sales Rose Slightly. Momentum Changing?

U.S. Existing Home Sales Rose Slightly. Momentum Changing?

Italy’s Consumer Confidence Erodes