Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324d.jpg" align="left" border="0" height="265" width="353">
Confidence among French manufacturers in March remained at the
all time low of 68 recorded in February, as can be seen in the first
chart that shows the historical record of the series.
(INSEE, the National Institute of Statistics and Economics of
France, computes a synthetic indexes to measure confidence in overall
business, based on composite synthetic indexes for industry,
construction. services and retail and wholesale trade. The indexes are
so constructed that they have an average of 100 and a standard
deviation of 10. They are based on the replies of the respondents to a
survey regarding their recent output, orders, inventories and opinions
about the future of production and prices for their own business and
business in general. These replies are recorded in percent balances,
the difference between the percent expecting increases and the percent
expecting decreases.)<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324e.jpg" align="right" border="0" height="265" width="353">
Given that the index was unchanged from February to March,
there were only very small, offsetting changes in the percent balances
of the items that make up the index, as can be seen in the table below.
The largest change was the 6 point improvement in the outlook for
production in general business, from -76% to -70%. The respondents were
also more positive on production in their own business and reported a
one point decline in inventories, which in view of the low demand, is a
positive. The rest of the components showed more negative balances. The
negative percent balance on recent changes in output, increased from
-49% in February to -51% in March, that for total order books went from
-67% to -69%, and for export order books, from -72% to -73%. To put the
current percent balances in perspective, the second chart shows the
historical record of the percent balances for two of the components of
the overall index--the recent changes in output and total order books
and demand. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">FRANCE</th>
<th scope="col">Mar 09</th>
<th scope="col">Feb 09&nbsp;</th>
<th scope="col">Mar&nbsp; 08&nbsp;</th>
<th scope="col">M/M CHG&nbsp;</th>
<th scope="col">Y/Y CHG</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Business
Climate Indicator (Synthetic)&nbsp;</td>
<td>68</td>
<td>70</td>
<td>109</td>
<td>-2</td>
<td>-40</td>
<td>97</td>
<td>109</td>
</tr>
<tr>
<td class="firstcol">Manufacturing Climate
Indicator (Synthetic)&nbsp;</td>
<td>68</td>
<td>68</td>
<td>108</td>
<td>0</td>
<td>-40</td>
<td>-97</td>
<td>111</td>
</tr>
<tr>
<td class="firstcol">Recent Changes in
Output (%)</td>
<td>-51</td>
<td>-49</td>
<td>17</td>
<td>-2</td>
<td>-67</td>
<td>0</td>
<td>16</td>
</tr>
<tr>
<td class="firstcol">Inventory Levels (%)</td>
<td>23</td>
<td>24</td>
<td>11</td>
<td>-1</td>
<td>+12</td>
<td>18</td>
<td>00</td>
</tr>
<tr>
<td class="firstcol">Total Order Books and
Demand (%)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>-69</td>
<td>-67</td>
<td>1</td>
<td>-2</td>
<td>-70</td>
<td>-19</td>
<td>2</td>
</tr>
<tr>
<td class="firstcol">Export Order Books (%)</td>
<td>-73</td>
<td>-72</td>
<td>1</td>
<td>-1</td>
<td>-74</td>
<td>-17</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">Personal Outlook on
Production (%)</td>
<td>-45</td>
<td>-46</td>
<td>15</td>
<td>1</td>
<td>-60</td>
<td>-4</td>
<td>15</td>
</tr>
<tr>
<td class="firstcol">General Outlook on
Production(%)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>-70</td>
<td>-76</td>
<td>-5</td>
<td>6</td>
<td>-76</td>
<td>-31</td>
<td>8</td>
</tr>
<tr>
<td class="firstcol">Personal Outlook on
Prices (%)</td>
<td>-15</td>
<td>-14</td>
<td>9</td>
<td>-1</td>
<td>-24</td>
<td>9</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">General Outlook on
Prices (%)</td>
<td>-35</td>
<td>-33</td>
<td>49</td>
<td>-2</td>
<td>-84</td>
<td>30</td>
<td>27</td>
</tr>
</tbody>
</table>
</body></html>

Confidence among French manufacturers in March remained at the all time low of 68 recorded in February, as can be seen in the first chart that shows the historical record of the series. (INSEE, the National Institute of Statistics and [...]

Confidence Among French Manufacturers Stays at Record Low Levels

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324c.jpg" width="353">
February chain store sales may belatedly have benefited as Christmas gift cards were cashed in. Now, however the effects of higher unemployment seem to have taken hold. Store sales fell in three of the last four weeks and the decline left the March level roughly even with the February average level. The International Council of Shopping Centers-Goldman Sachs Index indicated that the weekly declines during three of the last four weeks ranged from -0.1% and -0.6%. 
The ICSC-Goldman Sachs 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 last ten years there has been a 64% correlation between the year-to-year growth in chain store sales and the growth in general merchandise sales. These weekly figures are available in Haver&#39;s SURVEYW database.
The outlook for sales, moreover, remains cautious. Though the weekly leading indicator of chain store sales from ICSC-Goldman Sachs rose 0.1% last week (-4.3% y/y) after the prior week&#39;s 0.3% gain, those increases made up little of February&#39;s 2.3% flop.
The latest Business Outlook Survey from the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2009/bos0309.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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">03/21/09</th>
<th scope="col">03/14/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>481.3</td>
<td>483.4</td>
<td>-1.4%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>


</html>

February chain store sales may belatedly have benefited as Christmas gift cards were cashed in. Now, however the effects of higher unemployment seem to have taken hold. Store sales fell in three of the last four weeks and the decline [...]

U.S. Chain Store Sales Lose Earlier Momentum

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324a.jpg" width="353">
The potential for OPEC restraint in crude oil production recently helped to lift prices for crude oil. For a barrel of West Texas Intermediate prices rose last week to $49.46, up roughly 50% from the December low of $32.37 per barrel. In futures trading yesterday, the May contract price for crude oil rose even further to $53.80 per barrel which was highest level since late November. Prices reached a high of $145.66 last July.
Regular gasoline prices the have followed the rise in crude despite the deepening worldwide recession. The price for regular gasoline rose last week to $1.96 per gallon. That also matched its highest level since last November. The latest was up 35 cents from the December low. Yesterday, the spot market price for regular gasoline also showed strength with a rise to $1.41 per gallon, up from $1.30 averaged last week and $1.20 during the week prior. These prices compare to those that were slightly below $1.00 at the end of last year. The figures are reported by the U.S. Department of Energy.
Weekly gasoline prices can be found in Haver&#39;s WEEKLY database. Daily prices are in the DAILY database.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324b.jpg" width="353">
Gasoline demand continued to suffer due to the effects of the U.S. recession although earlier declines in gasoline prices have given some lift to driving. The latest y/y change of -0.5% moderated from the 4.8% rate of decline seen last October. (Gasoline prices at the time were just off their peak.) The change in demand is measured using the latest four weeks versus the same four weeks in 2008. Demand for all petroleum products was down 3.2% y/y. That negative comparison was led by a 9.9% decline in distillate demand and a 17.6% drop in residual fuel oil consumption. These numbers are available in Haver&#39;s OILWKLY database.
The price of natural gas continued downward with the coming end to the winter heating season. The decline to $3.83 per mmbtu (-58.0% y/y) was to the lowest level since 2002. The latest average price was down more than two-thirds from the high reached in early-July of $13.19/mmbtu.
American International Group is this morning&#39;s House testimony by Fed Chairman Ben S. Bernanke and it is available <a href="http://www.federalreserve.gov/newsevents/testimony/bernanke20090324a.htm"> here</a>.
The Role of the Federal Reserve in Preserving Financial and Monetary Stability Joint Statement by the Department of the Treasury and the Federal Reserve can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/20090323b.htm"> 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">03/23/09</th>
<th scope="col">03/16/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per Gallon, Regular)</td>
<td>1.96</td>
<td>1.91</td>
<td>-39.8%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>49.46</td>
<td>45.68</td>
<td>-53.3%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>
</body>
</html>

The potential for OPEC restraint in crude oil production recently helped to lift prices for crude oil. For a barrel of West Texas Intermediate prices rose last week to $49.46, up roughly 50% from the December low of $32.37 per barrel. [...]

Petroleum Prices Strengthen On Potential Tightening Of Crude Supplies

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324a.jpg" align="left" border="0" height="265" width="353">
The potential for OPEC restraint in crude oil production
recently helped to lift prices for crude oil. For a
barrel of West Texas Intermediate prices rose last week to $49.46, up
roughly 50% from the December low of $32.37 per barrel. In futures
trading yesterday, the May contract price for crude oil rose even
further to $53.80 per barrel which was highest level since late
November. Prices reached a high of $145.66 last July.
Regular gasoline prices the have followed
the rise in crude despite the deepening worldwide recession. The price
for regular gasoline rose last week to $1.96 per gallon. That also
matched its highest level since last November. The latest was up 35
cents from the December low. Yesterday, the spot market price for
regular gasoline also showed strength with a rise to $1.41 per gallon,
up from $1.30 averaged last week and $1.20 during the week prior. These
prices compare to those that were slightly below $1.00 at the end of
last year. The figures are reported by the U.S. Department of Energy.
Weekly gasoline prices can be found in Haver's WEEKLY
database. Daily prices are in the DAILY
database.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324b.jpg" align="right" border="0" height="265" width="353">
Gasoline demand continued to suffer due to
the effects of the U.S. recession although earlier declines in gasoline
prices have given some lift to driving. The latest y/y change of -0.5%
moderated from the 4.8% rate of decline seen last October. (Gasoline
prices at the time were just off their peak.) The change in demand is
measured using the latest four weeks versus the same four weeks in
2008. Demand for all petroleum products was down
3.2% y/y. That negative comparison was led by a 9.9% decline in
distillate demand and a 17.6% drop in residual fuel oil consumption.
These numbers are available in Haver's OILWKLY database.
The price of natural gas continued downward with the coming
end to the winter heating season. The decline to $3.83 per mmbtu
(-58.0% y/y) was to the lowest level since 2002. The latest average
price was down more than two-thirds from the high reached in early-July
of $13.19/mmbtu.
American International Group is this
morning's House testimony by Fed Chairman Ben S. Bernanke and it is
available <a href="http://www.federalreserve.gov/newsevents/testimony/bernanke20090324a.htm">
here</a>.
The Role of the Federal Reserve in Preserving
Financial and Monetary Stability Joint Statement by the Department of
the Treasury and the Federal Reserve can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/20090323b.htm">
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">03/23/09</th>
<th scope="col">03/16/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>1.96</td>
<td>1.91</td>
<td>-39.8%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>49.46</td>
<td>45.68</td>
<td>-53.3%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>
U.S. Chain Store Sales Lose
Earlier Momentum 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 24, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324c.jpg" align="left" border="0" height="265" width="353">
February chain store sales may belatedly have benefited as
Christmas gift cards were cashed in. Now, however the effects of higher
unemployment seem to have taken hold. Store sales fell in three of the
last four weeks and the decline left the March level roughly even with
the February average level. The International Council of Shopping
Centers-Goldman Sachs Index indicated that the weekly declines during
three of the last four weeks ranged from -0.1% and -0.6%. 
The ICSC-Goldman
Sachs 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 last ten years there has been a 64% correlation
between the year-to-year growth in chain store sales and the growth in
general merchandise sales. These weekly figures are
available in Haver's SURVEYW database.
The outlook for sales, moreover, remains cautious. Though the
weekly leading indicator of chain store sales from ICSC-Goldman Sachs
rose 0.1% last week (-4.3% y/y) after the prior week's 0.3% gain, those
increases made up little of February's 2.3% flop.
The latest Business Outlook Survey from
the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2009/bos0309.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/surveyw/@S2/@S2.HTM">ICSC-UBS
(SA, 1977=100)</a></th>
<th scope="col">03/21/09</th>
<th scope="col">03/14/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain
Store Sales</td>
<td>481.3</td>
<td>483.4</td>
<td>-1.4%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
Confidence Among
FrenchManufacturers Stays at Record Low Levels 
by <a href="/comment/Curley.html">Louise
Curley</a> March 24, 2009



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324d.jpg" align="left" border="0" height="265" width="353">
Confidence among French manufacturers in March remained at the
all time low of 68 recorded in February, as can be seen in the first
chart that shows the historical record of the series.
(INSEE, the National Institute of Statistics and Economics of
France, computes a synthetic indexes to measure confidence in overall
business, based on composite synthetic indexes for industry,
construction. services and retail and wholesale trade. The indexes are
so constructed that they have an average of 100 and a standard
deviation of 10. They are based on the replies of the respondents to a
survey regarding their recent output, orders, inventories and opinions
about the future of production and prices for their own business and
business in general. These replies are recorded in percent balances,
the difference between the percent expecting increases and the percent
expecting decreases.)<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324e.jpg" align="right" border="0" height="265" width="353">
Given that the index was unchanged from February to March,
there were only very small, offsetting changes in the percent balances
of the items that make up the index, as can be seen in the table below.
The largest change was the 6 point improvement in the outlook for
production in general business, from -76% to -70%. The respondents were
also more positive on production in their own business and reported a
one point decline in inventories, which in view of the low demand, is a
positive. The rest of the components showed more negative balances. The
negative percent balance on recent changes in output, increased from
-49% in February to -51% in March, that for total order books went from
-67% to -69%, and for export order books, from -72% to -73%. To put the
current percent balances in perspective, the second chart shows the
historical record of the percent balances for two of the components of
the overall index--the recent changes in output and total order books
and demand. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">FRANCE</th>
<th scope="col">Mar 09</th>
<th scope="col">Feb 09&nbsp;</th>
<th scope="col">Mar&nbsp; 08&nbsp;</th>
<th scope="col">M/M CHG&nbsp;</th>
<th scope="col">Y/Y CHG</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Business
Climate Indicator (Synthetic)&nbsp;</td>
<td>68</td>
<td>70</td>
<td>109</td>
<td>-2</td>
<td>-40</td>
<td>97</td>
<td>109</td>
</tr>
<tr>
<td class="firstcol">Manufacturing Climate
Indicator (Synthetic)&nbsp;</td>
<td>68</td>
<td>68</td>
<td>108</td>
<td>0</td>
<td>-40</td>
<td>-97</td>
<td>111</td>
</tr>
<tr>
<td class="firstcol">Recent Changes in
Output (%)</td>
<td>-51</td>
<td>-49</td>
<td>17</td>
<td>-2</td>
<td>-67</td>
<td>0</td>
<td>16</td>
</tr>
<tr>
<td class="firstcol">Inventory Levels (%)</td>
<td>23</td>
<td>24</td>
<td>11</td>
<td>-1</td>
<td>+12</td>
<td>18</td>
<td>00</td>
</tr>
<tr>
<td class="firstcol">Total Order Books and
Demand (%)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>-69</td>
<td>-67</td>
<td>1</td>
<td>-2</td>
<td>-70</td>
<td>-19</td>
<td>2</td>
</tr>
<tr>
<td class="firstcol">Export Order Books (%)</td>
<td>-73</td>
<td>-72</td>
<td>1</td>
<td>-1</td>
<td>-74</td>
<td>-17</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">Personal Outlook on
Production (%)</td>
<td>-45</td>
<td>-46</td>
<td>15</td>
<td>1</td>
<td>-60</td>
<td>-4</td>
<td>15</td>
</tr>
<tr>
<td class="firstcol">General Outlook on
Production(%)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>-70</td>
<td>-76</td>
<td>-5</td>
<td>6</td>
<td>-76</td>
<td>-31</td>
<td>8</td>
</tr>
<tr>
<td class="firstcol">Personal Outlook on
Prices (%)</td>
<td>-15</td>
<td>-14</td>
<td>9</td>
<td>-1</td>
<td>-24</td>
<td>9</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">General Outlook on
Prices (%)</td>
<td>-35</td>
<td>-33</td>
<td>49</td>
<td>-2</td>
<td>-84</td>
<td>30</td>
<td>27</td>
</tr>
</tbody>
</table>
UK Inflation Accelerates 
by <a href="/comment/Brusca.html">Robert
Brusca</a> March 24, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324f.jpg" align="left" border="0" height="265" width="353">
UK inflation spurted in February quite unexpectedly. As the
table shows, the month-to-month acceleration is quite widespread. UK
core inflation continues to hover below the key 2% level, although it
has ticked up this month too. Headline inflation has ticked higher and
now stands at 3.2% Yr/Yr. Three-and six-month headline inflation show a
sharp deceleration as you can tell from the included chart. UK
statistics have been a bit mercurial with surveys showing much more
weakness that the actual reports especially for things like retail
sales. It is certainly too soon to develop angst over inflation trends
in the UK. For the moment the month&#8217;s report is a curiosity. Surely
economic conditions are still too weak to engender any significant
inflation at this time. Still, Europe is the place that inflation is
most feared. The BOE has been bolder than the ECB and ECB policies
remain more restrictive than in the UK. Even so, having an inflation
scare in a country so close to home, even a scare of minor proportions,
is an issue. It is not the sort of thing that will get the kind of bold
action from the ECB that the European economies still seem to need. The
UK inflation blip is not good news. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">UK HICP
and RPI Inflation</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% MO/MO</td>
<td colspan="4">% saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>Dec-08</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>Yr Ago</td>
</tr>
<tr>
<td class="firstcol">HICP</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>-0.5%</td>
<td>0.4%</td>
<td>0.7%</td>
<td>3.2%</td>
<td>2.5%</td>
</tr>
<tr class="even">
<td class="firstcol">&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">All Item RPI</td>
<td>0.3%</td>
<td>-0.7%</td>
<td>-1.5%</td>
<td>-7.4%</td>
<td>-4.7%</td>
<td>0.0%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">RPI x</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>0.0%</td>
<td>-0.3%</td>
<td>2.6%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">RPI excl Seasonal Food</td>
<td>0.3%</td>
<td>-0.7%</td>
<td>-1.5%</td>
<td>-7.7%</td>
<td>-4.9%</td>
<td>-0.3%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">Food &amp; Beverages</td>
<td>1.6%</td>
<td>0.1%</td>
<td>0.5%</td>
<td>9.1%</td>
<td>6.1%</td>
<td>11.3%</td>
<td>6.1%</td>
</tr>
<tr>
<td class="firstcol">Housing and HH Expenditures</td>
<td>-0.5%</td>
<td>-0.9%</td>
<td>-3.2%</td>
<td>-17.1%</td>
<td>-8.5%</td>
<td>-2.7%</td>
<td>5.1%</td>
</tr>
<tr>
<td class="firstcol">Clothing &amp; Footwear</td>
<td>0.8%</td>
<td>-0.1%</td>
<td>-3.2%</td>
<td>-9.6%</td>
<td>-8.2%</td>
<td>-6.4%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">Leisure Services</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.2%</td>
<td>4.7%</td>
<td>5.3%</td>
<td>3.1%</td>
</tr>
<tr>
<td class="firstcol">Leisure Goods</td>
<td>1.5%</td>
<td>-0.1%</td>
<td>-1.9%</td>
<td>-1.9%</td>
<td>-3.6%</td>
<td>-3.6%</td>
<td>-2.7%</td>
</tr>
<tr>
<td class="firstcol">Motoring Expenditures</td>
<td>1.9%</td>
<td>-1.9%</td>
<td>-2.3%</td>
<td>-9.1%</td>
<td>-16.7%</td>
<td>-7.4%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">Fares and Travel Costs</td>
<td>-1.5%</td>
<td>-3.2%</td>
<td>4.8%</td>
<td>-0.4%</td>
<td>2.8%</td>
<td>8.3%</td>
<td>3.8%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">A RED
highlight
indicates inflation accelerating from pace of previous horizon</td>
</tr>
</tbody>
</table>
Flash PMIs Bottom Out 
by <a href="/comment/Brusca.html">Robert
Brusca</a> March 24, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090324g.jpg" align="left" border="0" height="265" width="353">
The manufacturing and Services indices from Markit show that
Euro Area PMIs have risen form the bottoms in this cycle. The moves are
small and the included chart demonstrates that the move is without much
vigor. The services sector is showing the most substantial rebound. 
 

Still the services index remains in the lower 3.5% of its
range and the MFG index is in the bottom of 1.6% of its range both
since August 1998. 
 

These reports are the first for March and they are the first
signs that the pace of decline in the European economy may be slowing.
They are still very weak signals since each resides well below the
neutral level for this survey which is at a value of 50. Neither survey
has developed any sort of upward momentum. So far all we have is a sign
of a lesser pace of decline, not of any actual improvement. But this is
how the end of the severe phase of recession looks. And it will be good
to get that behind us. Once this phase ends remedial actions have more
potential to help the economy. . 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col">FLASH
Readings</th>
</tr>
<tr>
<th colspan="3" scope="col">Markit
PMIs for the Euro
Area</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Mar-09</td>
<td>33.97</td>
<td>40.06</td>
</tr>
<tr>
<td class="firstcol">Feb-09</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">Jan-09</td>
<td>34.42</td>
<td>42.16</td>
</tr>
<tr>
<td class="firstcol">Dec-08</td>
<td>33.87</td>
<td>42.06</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">Averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>33.95</td>
<td>40.49</td>
</tr>
<tr>
<td class="firstcol">6-Mo</td>
<td>37.25</td>
<td>41.96</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>43.41</td>
<td>45.72</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">127-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>60.47</td>
<td>62.36</td>
</tr>
<tr>
<td class="firstcol">Low</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>1.6%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
</body></html>

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323g.jpg" align="right" border="0" height="265" width="353">
World trade began to decelerate early in 2008 reflecting the
impact of the world wide slow down, but did not actually decline until
November, the latest data available in Haver's IFS (International
Monetary Fund Data) database. As shown in the first chart, the
year-to-year decline in world exports was 13% in November. Since then
more countries have released trade data most of it suggesting further
sharp declines.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323d.jpg" align="right" border="0" height="265" width="353">
Today foreign trade data for the Euro Area, as a whole, was
released for January 2009. (The data exclude intra euro area trade.)
Eurostat reported that the sixteen country area experienced
year-to-year declines of 7% in exports in December and 22% in January.
It also reported its second highest trade deficit of 5,460 million
euros with the rest of the world. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323e.jpg" align="right" border="0" height="265" width="353">
The balance of trade in the area has
fallen rapidly since February 2008, when the last appreciable surplus
was registered. Exports fell 29,815 million euros and imports fell
22,505 million euros resulting in a deterioration of 7,310 million
euros in the balance of trade--from a surplus of 1,850 million euros to
a deficit of 5,460 million euros. The trends in exports, imports and
the balances can be seen in the second chart.
Manufactured exports were the hardest hit as can be seen in
the third chart that shows exports of manufactured products, <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323f.jpg" align="right" border="0" height="265" width="353">
mineral
fuels and lubricants, raw materials and food, drink and tobacco on a
log scale where changes reflect percentage changes.
The rise and fall in oil prices that accounted for the sharp
rise and fall in fuel imports over the past few years is evident in the
fourth chart, also on a log scale. The peak in imports of fuels was
reached in July 2008.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">EURO
AREA-16&nbsp; (Million Euros)</th>
<th scope="col">Jan 09</th>
<th scope="col">Feb 08&nbsp;</th>
<th scope="col">Change</th>
<th scope="col">2007&nbsp;</th>
<th scope="col">2008</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;Exports</td>
<td>104550</td>
<td>134365</td>
<td>-29815</td>
<td>1561690</td>
<td>1505903</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;Imports</td>
<td>110010</td>
<td>132515</td>
<td>-22505</td>
<td>1592935</td>
<td>1490001</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;Balance</td>
<td>-5460</td>
<td>1850</td>
<td>-7320</td>
<td>-31245</td>
<td>15902</td>
</tr>
<tr class="even">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Manufactured Products
Exports</td>
<td>87736</td>
<td>114590</td>
<td>-26854</td>
<td>1306908</td>
<td>1280612</td>
</tr>
<tr>
<td class="firstcol">Mineral Fuels,
&amp; Lubricants Imports</td>
<td>21068</td>
<td>39644*</td>
<td>-18576</td>
<td>385314</td>
<td>297024</td>
</tr>
<tr class="even">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td class="firstcol">* July 2008 Peak</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
</body></html>

World trade began to decelerate early in 2008 reflecting the impact of the world wide slow down, but did not actually decline until November, the latest data available in Haver's IFS (International Monetary Fund Data) database. As [...]

Shrinking World Trade: Evidence From Euro Area

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323b.jpg" width="353">
Sales may indeed respond to prices. That seemed the case according to the National Association of Realtors report on sales of existing homes. They rose 5.1% during February 4.72M and the increase reversed January&#39;s decline. Consensus expectations had been for February sales of 4.45M homes. Total sales include sales of condos and co-ops. In each of the country&#39;s regions sales during February roughly recovered their January declines.
Did continued weakness in pricing power spur the February recovery? Median home prices did rise 0.4% from January. The uptick followed, however, a revised 6.2% (NSA) January decline which was double the initial estimate. The recent weakness in prices left them 15.5% below February of last year and prices have fallen 28.2% since their peak. Declines in home prices and lower interest rates have gone a long way to increase the affordability of an existing home which is up roughly one quarter from one year ago. The measure rose to a record high for the series which dates back to 1971.
For existing single-family homes alone sales recovered most of their January decline with a 4.4% rise to 4.230M units. However, that remained near the lowest level since July 1997. Is the earlier decline in sales forming a bottom? They have been essentially flat for the last four months. (These data have a longer history than the total series).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323c.jpg" width="353">
The number of unsold homes (condos &amp; single-family) on the market increased a slight 5.2% during February but the year-to-year decline of 5.5% may eventually give some lift to home prices. At the current sales rate there was a 9.7 months&#39; supply on the market which was near the lowest since 2007. For single-family homes the inventory also rose a modest 2.6% (-6.7% y/y) after little change during January. At the current sales rate there was a 9.1 month&#39;s supply, near the lowest since 2007.
The data on existing home sales, prices and affordability can be found in Haver&#39;s USECON database. The regional price, affordability and inventory data is available in the REALTOR database.
The &quot;fact sheet&quot; for the Public-Private Investment Program from the U.S. Treasury Department is available <a href="http://www.ustreas.gov/press/releases/reports/ppip_fact_sheet.pdf">here</a>.
House Prices and Bank Loan Performance from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-06.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">February</th>
<th scope="col">January</th>
<th scope="col">February y/y %</th>
<th scope="col">February &#39;08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>4,720</td>
<td>4,490</td>
<td>-4.6</td>
<td>4,950</td>
<td>4,893</td>
<td>5,674</td>
<td>6,516</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>740</td>
<td>640</td>
<td>-14.9</td>
<td>870</td>
<td>845</td>
<td>1,010</td>
<td>1,093</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,040</td>
<td>1,030</td>
<td>-14.0</td>
<td>1,210</td>
<td>1,130</td>
<td>1,331</td>
<td>1,494</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,740</td>
<td>1,640</td>
<td>-11.2</td>
<td>1,960</td>
<td>1,860</td>
<td>2,243</td>
<td>2,577</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,200</td>
<td>1,170</td>
<td>30.4</td>
<td>920</td>
<td>1,064</td>
<td>1,095</td>
<td>1,357</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,230</td>
<td>4,050</td>
<td>-3.6</td>
<td>4,390</td>
<td>4,341</td>
<td>4,960</td>
<td>5,712</td>
</tr>
<tr class="odd">
<td class="firstcol">Median Price, Total, $</td>
<td>165,400</td>
<td>164,800</td>
<td>-15.5</td>
<td>195,800</td>
<td>197,250</td>
<td>216,633</td>
<td>222,042++</td>
</tr>
</tbody>
</table>
</body>
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Sales may indeed respond to prices. That seemed the case according to the National Association of Realtors report on sales of existing homes. They rose 5.1% during February 4.72M and the increase reversed January's decline. Consensus [...]

February U.S. Existing Home Sales Recover January Decline as Prices Remain Weak

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323a.jpg" width="353">
The National Activity Index (CFNAI) for February from the Chicago Federal Reserve Bank rose slightly month-to-month but remained depressed. At -2.83 the figure contrasted with January&#39;s near-record low of 3.48. Since 1970 there has been a 75% correlation between the level of the index and the q/q change in real GDP.
The three-month moving average of the index of -3.48 was near its lowest since January of 1975.
An index level at or below -0.70 typically has indicated negative U.S. economic growth. A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth of roughly 3%.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_march2009.pdf">here</a> and the historical data are available in Haver&#39;s SURVEYS database.
Three of the four sub-categories of the index including employment, production, and consumption &amp; housing improved slightly from January but remained at a depressed level. Seventy three of the individual indicators in the overall series made negative contributions while twelve made a positive contribution.
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.
In a separate survey, the Chicago Fed indicated that its Midwest manufacturing index fell during January to its lowest level since 1994. Indicators for the steel, machinery and auto sectors each fell but the measure for the resource sector was stable.
The Chicago Federal Reserve figures are available in Haver&#39;s SURVEYS database.
Preliminary Analysis of the President&#39;s Budget and an Update of CBO&#39;s Budget and Economic Outlook from the Congressional Budget Office can be found <a href="http://www.cbo.gov/ftpdocs/100xx/doc10014/03-20-PresidentBudget.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;08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-2.83</td>
<td>-3.74</td>
<td>-1.31</td>
<td>-1.78</td>
<td>-0.36</td>
<td>0.02</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Average</td>
<td>-3.48</td>
<td>-3.61</td>
<td>-0.89</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>


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The National Activity Index (CFNAI) for February from the Chicago Federal Reserve Bank rose slightly month-to-month but remained depressed. At -2.83 the figure contrasted with January's near-record low of 3.48. Since 1970 there has [...]

Chicago Fed Index Improved Marginally During February

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323a.jpg" align="left" border="0" height="265" width="353">
The National Activity Index (CFNAI) for February from the
Chicago Federal Reserve Bank rose slightly month-to-month but remained
depressed. At -2.83 the figure contrasted with January's near-record
low of 3.48. Since 1970 there has been a 75% correlation between the
level of the index and the q/q change in real GDP.
The three-month moving average of the index of -3.48
was near its lowest since January of 1975.
An index level at or below -0.70 typically has indicated
negative U.S. economic growth. A zero value of the CFNAI indicates that
the economy is expanding at its historical trend rate of growth of
roughly 3%.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_march2009.pdf">here</a>
and the historical data are available in Haver's SURVEYS
database.
Three of the four sub-categories of the index including
employment, production, and consumption &amp; housing improved
slightly from January but remained at a depressed level. Seventy three
of the individual indicators in the overall series made negative
contributions while twelve made a positive contribution.
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.
In a separate survey, the Chicago Fed indicated that its
Midwest manufacturing index fell during January to its lowest level
since 1994. Indicators for the steel, machinery and auto sectors each
fell but the measure for the resource sector was stable.
The Chicago Federal Reserve figures are available in Haver's SURVEYS
database.
Preliminary Analysis of the President's Budget and an
Update of CBO's Budget and Economic Outlook from the
Congressional Budget Office can be found <a href="http://www.cbo.gov/ftpdocs/100xx/doc10014/03-20-PresidentBudget.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 '08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-2.83</td>
<td>-3.74</td>
<td>-1.31</td>
<td>-1.78</td>
<td>-0.36</td>
<td>0.02</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Average</td>
<td>-3.48</td>
<td>-3.61</td>
<td>-0.89</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
February U.S. Existing Home Sales
Recover January Decline as Prices Remain Weak 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 23, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323b.jpg" align="left" border="0" height="265" width="353">
Sales may indeed respond to prices. That seemed the case
according to the National Association of Realtors report on sales of existing
homes. They rose 5.1% during February 4.72M and the increase
reversed January's decline. Consensus expectations had been for
February sales of 4.45M homes. Total sales include sales of condos and
co-ops. In each of the country's regions sales during February roughly
recovered their January declines.
Did continued weakness in pricing power spur the February
recovery? Median home prices did rise 0.4% from
January. The uptick followed, however, a revised 6.2% (NSA) January
decline which was double the initial estimate. The recent weakness in
prices left them 15.5% below February of last year and prices have
fallen 28.2% since their peak. Declines in home prices and lower
interest rates have gone a long way to increase the affordability of an
existing home which is up roughly one quarter from one year ago. The
measure rose to a record high for the series which dates back to 1971.
For existing single-family homes alone sales recovered most of
their January decline with a 4.4% rise to 4.230M units. However, that
remained near the lowest level since July 1997. Is the earlier decline
in sales forming a bottom? They have been essentially flat for the last
four months. (These data have a longer history than the total series).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323c.jpg" align="right" border="0" height="265" width="353">
The number of unsold homes (condos &amp; single-family) on
the market increased a slight 5.2% during February but the year-to-year
decline of 5.5% may eventually give some lift to home prices. At the
current sales rate there was a 9.7 months' supply on the market which
was near the lowest since 2007. For single-family homes the inventory
also rose a modest 2.6% (-6.7% y/y) after little change during January.
At the current sales rate there was a 9.1 month's supply, near the
lowest since 2007.
The data on existing home sales, prices and affordability can
be found in Haver's USECON database. The regional
price, affordability and inventory data is available in the REALTOR
database.
The "fact sheet" for the Public-Private Investment
Program from the U.S. Treasury Department is available <a href="http://www.ustreas.gov/press/releases/reports/ppip_fact_sheet.pdf">here</a>.
House Prices and Bank Loan Performance from
the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-06.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">February</th>
<th scope="col">January</th>
<th scope="col">February y/y %</th>
<th scope="col">February '08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>4,720</td>
<td>4,490</td>
<td>-4.6</td>
<td>4,950</td>
<td>4,893</td>
<td>5,674</td>
<td>6,516</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>740</td>
<td>640</td>
<td>-14.9</td>
<td>870</td>
<td>845</td>
<td>1,010</td>
<td>1,093</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,040</td>
<td>1,030</td>
<td>-14.0</td>
<td>1,210</td>
<td>1,130</td>
<td>1,331</td>
<td>1,494</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,740</td>
<td>1,640</td>
<td>-11.2</td>
<td>1,960</td>
<td>1,860</td>
<td>2,243</td>
<td>2,577</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,200</td>
<td>1,170</td>
<td>30.4</td>
<td>920</td>
<td>1,064</td>
<td>1,095</td>
<td>1,357</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,230</td>
<td>4,050</td>
<td>-3.6</td>
<td>4,390</td>
<td>4,341</td>
<td>4,960</td>
<td>5,712</td>
</tr>
<tr class="odd">
<td class="firstcol">Median Price, Total, $</td>
<td>165,400</td>
<td>164,800</td>
<td>-15.5</td>
<td>195,800</td>
<td>197,250</td>
<td>216,633</td>
<td>222,042++</td>
</tr>
</tbody>
</table>
Shrinking World Trade: EvidenceFrom Euro Area 
by <a href="/comment/Curley.html">Louise
Curley</a> March 23, 2009



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323g.jpg" align="right" border="0" height="265" width="353">
World trade began to decelerate early in 2008 reflecting the
impact of the world wide slow down, but did not actually decline until
November, the latest data available in Haver's IFS (International
Monetary Fund Data) database. As shown in the first chart, the
year-to-year decline in world exports was 13% in November. Since then
more countries have released trade data most of it suggesting further
sharp declines.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323d.jpg" align="right" border="0" height="265" width="353">
Today foreign trade data for the Euro Area, as a whole, was
released for January 2009. (The data exclude intra euro area trade.)
Eurostat reported that the sixteen country area experienced
year-to-year declines of 7% in exports in December and 22% in January.
It also reported its second highest trade deficit of 5,460 million
euros with the rest of the world. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323e.jpg" align="right" border="0" height="265" width="353">
The balance of trade in the area has
fallen rapidly since February 2008, when the last appreciable surplus
was registered. Exports fell 29,815 million euros and imports fell
22,505 million euros resulting in a deterioration of 7,310 million
euros in the balance of trade--from a surplus of 1,850 million euros to
a deficit of 5,460 million euros. The trends in exports, imports and
the balances can be seen in the second chart.
Manufactured exports were the hardest hit as can be seen in
the third chart that shows exports of manufactured products, <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090323f.jpg" align="right" border="0" height="265" width="353">
mineral
fuels and lubricants, raw materials and food, drink and tobacco on a
log scale where changes reflect percentage changes.
The rise and fall in oil prices that accounted for the sharp
rise and fall in fuel imports over the past few years is evident in the
fourth chart, also on a log scale. The peak in imports of fuels was
reached in July 2008.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">EURO
AREA-16&nbsp; (Million Euros)</th>
<th scope="col">Jan 09</th>
<th scope="col">Feb 08&nbsp;</th>
<th scope="col">Change</th>
<th scope="col">2007&nbsp;</th>
<th scope="col">2008</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;Exports</td>
<td>104550</td>
<td>134365</td>
<td>-29815</td>
<td>1561690</td>
<td>1505903</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;Imports</td>
<td>110010</td>
<td>132515</td>
<td>-22505</td>
<td>1592935</td>
<td>1490001</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;Balance</td>
<td>-5460</td>
<td>1850</td>
<td>-7320</td>
<td>-31245</td>
<td>15902</td>
</tr>
<tr class="even">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Manufactured Products
Exports</td>
<td>87736</td>
<td>114590</td>
<td>-26854</td>
<td>1306908</td>
<td>1280612</td>
</tr>
<tr>
<td class="firstcol">Mineral Fuels,
&amp; Lubricants Imports</td>
<td>21068</td>
<td>39644*</td>
<td>-18576</td>
<td>385314</td>
<td>297024</td>
</tr>
<tr class="even">
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td class="firstcol">* July 2008 Peak</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></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

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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

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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.

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- 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: March 2009

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