Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422d.jpg" width="353">
GDP growth in the UK edged lower in Q1 to 0.6% from 0.7% in Q4. We indicated this possibility yesterday in discussing retail sales, which fell outright in March. The four-quarter performance thus stood at 2.8%, the slowest since Q4 2003.
All the major industry sectors participated in the weakening. The overall distribution sector, which includes retail and other trade, as well as hotels, restaurants and repair services, declined 0.1% after gaining 0.2% in Q4. Total services increased 0.8%, marginally less than in Q4. Industrial output also declined 0.1%, the same as in Q4; this sector is now down from a year ago, by 0.2%. Construction activity grew 0.6%, compared to the prior period&#39;s 1.1%, and the agricultural sector lost 0.8% after increasing 0.9% in Q4.

<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/UK/UK.HTM">United Kingdom</a> % Changes, Seasonally Adjusted</th>
<th scope="col">Q1 2005</th>
<th scope="col">Q4 2004</th>
<th scope="col">Year Ago</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total GDP</td>
<td>0.6</td>
<td>0.7</td>
<td>2.8</td>
<td>3.1</td>
<td>2.2</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">Industry</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-0.2</td>
<td>0.4</td>
<td>-0.1</td>
<td>-2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>0.8</td>
<td>0.8</td>
<td>3.6</td>
<td>4.1</td>
<td>2.5</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Distribution, etc.</td>
<td>-0.1</td>
<td>0.2</td>
<td>2.2</td>
<td>5.1</td>
<td>3.0</td>
<td>4.7</td>
</tr>
</tbody>
</table>
</body>
</html>

GDP growth in the UK edged lower in Q1 to 0.6% from 0.7% in Q4. We indicated this possibility yesterday in discussing retail sales, which fell outright in March. The four-quarter performance thus stood at 2.8%, the slowest since Q4 [...]

UK GDP Slows in Q1; 4-Quarter Growth Lowest since Q4 2003

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422f.jpg" width="353">
Employment in Taiwan increased by 2,000 in March, continuing a more moderate uptrend that emerged at the turn of the year; February saw a 17,000 rise and January 9,000. Most notably, manufacturing employment has declined the last two months. Other sectors, however, continue to expand, and the unemployment rate edged lower in March to 4.2%. In fact, during the last six months unemployment has hovered very near 4.2%, the lowest level since May 2001, during the world-wide recession associated with the technology &quot;bust&quot;.
As seen in the graph, a feature of that recession was the typical cycle in manufacturing employment. But it was exacerbated by a sharp drop in construction industry employment as well. Taiwan is, of course, one of the Asian &quot;NICs&quot; -- newly industrializing countries. A building boom in the first half of the 1990s, which was probably associated with that status, was already slowing down, and the onset of the recession brought a sudden plunge in construction activity and jobs, evident in the second graph. But also seen there, over the last year or so, the construction sector has been on the rebound. Jobs have increased 70,000 since November 2003, a 10% gain. During that same period, service-sector jobs have risen just 2.7% and total employment is up 2.6%. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422e.jpg" width="353">
The February-March pause in manufacturing employment is perhaps only transitory, but it raises the question of whether the advance in the construction industry can continue if demand for Taiwan&#39;s final products is slowing enough to constrain job growth.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/EMERGEPR/@P5/@P5.HTM">Taiwan:</a> Thousands, Seasonally Adjusted</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
<th scope="col">Mar 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Industry Employment</td>
<td>9,892</td>
<td>9,890</td>
<td>9,731</td>
<td>9,786</td>
<td>9,573</td>
<td>9,452</td>
<td>9,383</td>
</tr>
<tr>
<td class="firstcol">Monthly Change</td>
<td>2</td>
<td>17</td>
<td colspan="5">12-Month Average Change</td>
</tr>
<tr class="odd">
<td class="firstcol">13</td>
<td>17</td>
<td>15</td>
<td>8</td>
<td>-10</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>-8</td>
<td>-5</td>
<td>7</td>
<td>9</td>
<td>3</td>
<td>4</td>
<td>-13</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>10</td>
<td>8</td>
<td>4</td>
<td>4</td>
<td>-1</td>
<td>-1</td>
<td>-8</td>
</tr>
<tr>
<td class="firstcol">Service-Producing&nbsp;&nbsp; </td>
<td>11</td>
<td>18</td>
<td>8</td>
<td>10</td>
<td>17</td>
<td>5</td>
<td>10</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo: Unemploy- ment Rate</td>
<td colspan="3">Individual Months</td>
<td colspan="4">Annual Average</td>
</tr>
<tr>
<td class="firstcol">4.2</td>
<td>4.3</td>
<td>4.5</td>
<td>4.4</td>
<td>5.0</td>
<td>5.2</td>
<td>4.6</td>
</tr>
</tbody>
</table>
</body>
</html>

Employment in Taiwan increased by 2,000 in March, continuing a more moderate uptrend that emerged at the turn of the year; February saw a 17,000 rise and January 9,000. Most notably, manufacturing employment has declined the last two [...]

Construction Industry Jobs Lift Taiwan Employment; Unemployment Rate Sustains 4-Year Low

Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422c.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) Composite Housing Market Index fell to 67 in April versus an upwardly revised 70 in March. The index has fallen in three out of last four months.
All of the index components fell from March&#39;s level. The index of current sales is off 6.2% from the December high and the index of prospective sales is down 5%.
During the last twenty years, annual changes in the composite index had an 83% correlation with the change in new home sales. There&#39;s been an 86% correlation with the change in single family housing starts.
Traffic of prospective home buyers has been roughly steady at a high level for over a year.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
Visit the National Association of Home Builders using this <a href="http://www.nahb.org">link</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/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a> </th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">April &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>67</td>
<td>70</td>
<td>69</td>
<td>68</td>
<td>64</td>
<td>61</td>
</tr>
</tbody>
</table>
</body>
</html>

The National Association of Home Builders' (NAHB) Composite Housing Market Index fell to 67 in April versus an upwardly revised 70 in March. The index has fallen in three out of last four months. All of the index components fell from [...]

NAHB Housing Market Index Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422a.jpg" width="353">
The JoC-ECRI (Journal of Commerce-Economic Cycle Research Institute) index of industrial commodity prices has moved somewhat lower during the last few weeks, and that decline highlights the loss of forward momentum developed during the last year.
The y/y change in industrial commodity prices recently dropped to zero from a high above 30% about a year ago.
Much of that momentum loss is due to lower petroleum prices. The roughly 4% decline of late helped pull the y/y gain down to about 30% versus the doubling as of last November and 50% rate of increase last Spring.
Additionally, metals prices have been moving sideways for the last five months and the y/y rate of increase has fallen to 9% from its high of above 50% one year ago. A recent moderate decline in copper scrap prices pulled the y/y change to 21% versus the high of 60% and steel scrap prices have moved in a similar pattern with the y/y gain falling to 17% versus the high of 125%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422b.jpg" width="353">
Textile prices have meandered since early March though the y/y gain of zero reflects improvement from negative 9% this past November. Peak y/y growth of 15% was logged in late 2003. In the &quot;miscellaneous&quot; category, lumber prices recently recovered a portion of an earlier decline but remain 12% off the 2004 high.
The CRB (Commodity Research Bureau) commodity price index has moved sideways for over a year. The index differs from the JoC-ECRI version in that roughly half of the weighting reflects agricultural prices. Year to year growth fell negative this past January versus the high of +24% last April. Foodstuffs prices are down 12% from last year&#39;s high and livestock prices, though they recovered a bit recently, are flat versus 20% y/y growth this time last year and 40% growth late in 2003.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haver.com/COMMENT/www.haverselect.com/dlx/USECON/@E8/@E803/@E80304/@E80304.HTM">JoC-ECRI Industrial Price Index</a></th>
<th scope="col">04/21/05</th>
<th scope="col">12/31/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All Items</td>
<td>114.9</td>
<td>111.5</td>
<td>-0.4%</td>
<td>112.78</td>
<td>91.97</td>
<td>79.53</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Textiles</td>
<td>67.3</td>
<td>64.5</td>
<td>0.0%</td>
<td>65.83</td>
<td>65.09</td>
<td>59.73</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Metals</td>
<td>126.5</td>
<td>123.5</td>
<td>10.6%</td>
<td>118.15</td>
<td>84.57</td>
<td>75.14</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Miscellaneous</td>
<td>103.1</td>
<td>104.3</td>
<td>-19.4%</td>
<td>114.03</td>
<td>102.89</td>
<td>85.81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Petroleum</td>
<td>249.5</td>
<td>217.5</td>
<td>33.5%</td>
<td>207.13</td>
<td>135.26</td>
<td>110.06</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">CRB Spot Commodity Price Index</td>
<td>04/21/05</td>
<td>12/31/04</td>
<td>Y/Y</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">All Commodities</td>
<td>300.9</td>
<td>293.0</td>
<td>-1.3%</td>
<td>296.9</td>
<td>258.1</td>
<td>227.4</td>
</tr>
</tbody>
</table>
</body>
</html>

The JoC-ECRI (Journal of Commerce-Economic Cycle Research Institute) index of industrial commodity prices has moved somewhat lower during the last few weeks, and that decline highlights the loss of forward momentum developed during [...]

Commodity Prices Meander, Forward Momentum Lost

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422a.jpg" width="353">
The JoC-ECRI (Journal of Commerce-Economic Cycle Research Institute) index of industrial commodity prices has moved somewhat lower during the last few weeks, and that decline highlights the loss of forward momentum developed during the last year.
The y/y change in industrial commodity prices recently dropped to zero from a high above 30% about a year ago.
Much of that momentum loss is due to lower petroleum prices. The roughly 4% decline of late helped pull the y/y gain down to about 30% versus the doubling as of last November and 50% rate of increase last Spring.
Additionally, metals prices have been moving sideways for the last five months and the y/y rate of increase has fallen to 9% from its high of above 50% one year ago. A recent moderate decline in copper scrap prices pulled the y/y change to 21% versus the high of 60% and steel scrap prices have moved in a similar pattern with the y/y gain falling to 17% versus the high of 125%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422b.jpg" width="353">
Textile prices have meandered since early March though the y/y gain of zero reflects improvement from negative 9% this past November. Peak y/y growth of 15% was logged in late 2003. In the &quot;miscellaneous&quot; category, lumber prices recently recovered a portion of an earlier decline but remain 12% off the 2004 high.
The CRB (Commodity Research Bureau) commodity price index has moved sideways for over a year. The index differs from the JoC-ECRI version in that roughly half of the weighting reflects agricultural prices. Year to year growth fell negative this past January versus the high of +24% last April. Foodstuffs prices are down 12% from last year&#39;s high and livestock prices, though they recovered a bit recently, are flat versus 20% y/y growth this time last year and 40% growth late in 2003.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haver.com/COMMENT/www.haverselect.com/dlx/USECON/@E8/@E803/@E80304/@E80304.HTM">JoC-ECRI Industrial Price Index</a></th>
<th scope="col">04/21/05</th>
<th scope="col">12/31/04</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All Items</td>
<td>114.9</td>
<td>111.5</td>
<td>-0.4%</td>
<td>112.78</td>
<td>91.97</td>
<td>79.53</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Textiles</td>
<td>67.3</td>
<td>64.5</td>
<td>0.0%</td>
<td>65.83</td>
<td>65.09</td>
<td>59.73</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Metals</td>
<td>126.5</td>
<td>123.5</td>
<td>10.6%</td>
<td>118.15</td>
<td>84.57</td>
<td>75.14</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Miscellaneous</td>
<td>103.1</td>
<td>104.3</td>
<td>-19.4%</td>
<td>114.03</td>
<td>102.89</td>
<td>85.81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Petroleum</td>
<td>249.5</td>
<td>217.5</td>
<td>33.5%</td>
<td>207.13</td>
<td>135.26</td>
<td>110.06</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">CRB Spot Commodity Price Index</td>
<td>04/21/05</td>
<td>12/31/04</td>
<td>Y/Y</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">All Commodities</td>
<td>300.9</td>
<td>293.0</td>
<td>-1.3%</td>
<td>296.9</td>
<td>258.1</td>
<td>227.4</td>
</tr>
</tbody>
</table>
NAHB Housing Market Index Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> April 22, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422c.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) Composite Housing Market Index fell to 67 in April versus an upwardly revised 70 in March. The index has fallen in three out of last four months.
All of the index components fell from March&#39;s level. The index of current sales is off 6.2% from the December high and the index of prospective sales is down 5%.
During the last twenty years, annual changes in the composite index had an 83% correlation with the change in new home sales. There&#39;s been an 86% correlation with the change in single family housing starts.
Traffic of prospective home buyers has been roughly steady at a high level for over a year.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
Visit the National Association of Home Builders using this <a href="http://www.nahb.org">link</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/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a> </th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">April &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>67</td>
<td>70</td>
<td>69</td>
<td>68</td>
<td>64</td>
<td>61</td>
</tr>
</tbody>
</table>
Construction Industry Jobs Lift Taiwan Employment; Unemployment Rate Sustains 4-Year Low 
by <a href="/comment/Stone.html">Carol Stone</a> April 22, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422f.jpg" width="353">
Employment in Taiwan increased by 2,000 in March, continuing a more moderate uptrend that emerged at the turn of the year; February saw a 17,000 rise and January 9,000. Most notably, manufacturing employment has declined the last two months. Other sectors, however, continue to expand, and the unemployment rate edged lower in March to 4.2%. In fact, during the last six months unemployment has hovered very near 4.2%, the lowest level since May 2001, during the world-wide recession associated with the technology &quot;bust&quot;.
As seen in the graph, a feature of that recession was the typical cycle in manufacturing employment. But it was exacerbated by a sharp drop in construction industry employment as well. Taiwan is, of course, one of the Asian &quot;NICs&quot; -- newly industrializing countries. A building boom in the first half of the 1990s, which was probably associated with that status, was already slowing down, and the onset of the recession brought a sudden plunge in construction activity and jobs, evident in the second graph. But also seen there, over the last year or so, the construction sector has been on the rebound. Jobs have increased 70,000 since November 2003, a 10% gain. During that same period, service-sector jobs have risen just 2.7% and total employment is up 2.6%. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422e.jpg" width="353">
The February-March pause in manufacturing employment is perhaps only transitory, but it raises the question of whether the advance in the construction industry can continue if demand for Taiwan&#39;s final products is slowing enough to constrain job growth.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/EMERGEPR/@P5/@P5.HTM">Taiwan</a> Thousands, Seasonally Adjusted</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
<th scope="col">Mar 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Industry Employment</td>
<td>9,892</td>
<td>9,890</td>
<td>9,731</td>
<td>9,786</td>
<td>9,573</td>
<td>9,452</td>
<td>9,383</td>
</tr>
<tr>
<td class="firstcol">Monthly Change</td>
<td>2</td>
<td>17</td>
<td colspan="5">12-Month Average Change</td>
</tr>
<tr class="odd">
<td class="firstcol">13</td>
<td>17</td>
<td>15</td>
<td>8</td>
<td>-10</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>-8</td>
<td>-5</td>
<td>7</td>
<td>9</td>
<td>3</td>
<td>4</td>
<td>-13</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>10</td>
<td>8</td>
<td>4</td>
<td>4</td>
<td>-1</td>
<td>-1</td>
<td>-8</td>
</tr>
<tr>
<td class="firstcol">Service-Producing&nbsp;&nbsp; </td>
<td>11</td>
<td>18</td>
<td>8</td>
<td>10</td>
<td>17</td>
<td>5</td>
<td>10</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo: Unemploy- ment Rate</td>
<td colspan="3">Individual Months</td>
<td colspan="4">Annual Average</td>
</tr>
<tr>
<td class="firstcol">4.2</td>
<td>4.3</td>
<td>4.5</td>
<td>4.4</td>
<td>5.0</td>
<td>5.2</td>
<td>4.6</td>
</tr>
</tbody>
</table>
UK GDP Slows in Q1; 4-Quarter Growth Lowest since Q4 2003 
by <a href="/comment/Stone.html">Carol Stone</a> April 22, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050422d.jpg" width="353">
GDP growth in the UK edged lower in Q1 to 0.6% from 0.7% in Q4. We indicated this possibility yesterday in discussing retail sales, which fell outright in March. The four-quarter performance thus stood at 2.8%, the slowest since Q4 2003.
All the major industry sectors participated in the weakening. The overall distribution sector, which includes retail and other trade, as well as hotels, restaurants and repair services, declined 0.1% after gaining 0.2% in Q4. Total services increased 0.8%, marginally less than in Q4. Industrial output also declined 0.1%, the same as in Q4; this sector is now down from a year ago, by 0.2%. Construction activity grew 0.6%, compared to the prior period&#39;s 1.1%, and the agricultural sector lost 0.8% after increasing 0.9% in Q4.

<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/UK/UK.HTM">United Kingdom</a> % Changes, Seasonally Adjusted</th>
<th scope="col">Q1 2005</th>
<th scope="col">Q4 2004</th>
<th scope="col">Year Ago</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total GDP</td>
<td>0.6</td>
<td>0.7</td>
<td>2.8</td>
<td>3.1</td>
<td>2.2</td>
<td>1.8</td>
</tr>
<tr>
<td class="firstcol">Industry</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-0.2</td>
<td>0.4</td>
<td>-0.1</td>
<td>-2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>0.8</td>
<td>0.8</td>
<td>3.6</td>
<td>4.1</td>
<td>2.5</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Distribution, etc.</td>
<td>-0.1</td>
<td>0.2</td>
<td>2.2</td>
<td>5.1</td>
<td>3.0</td>
<td>4.7</td>
</tr>
</tbody>
</table>
</body>
</html>

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050421e.jpg" width="353">
Retail sales in the UK are flagging, according to the most recent couple of months&#39; data from the Office of National Statistics. In March, sales values rose 0.2% from February, the same size gain as for February from January. These moves yielded a 3.0% increase from March 2004, compared with a 4.7% increase for all of 2004.
The swing was wider in the corresponding volume results, that is, adjusted for inflation. Sales fell in March by 0.1% and were 3.7% ahead of a year ago. But 2004 as a whole saw 6.0% growth from 2003, making the recent performance a moderation of 2.3 percentage points. By store category, the weakening occurred in nonfood store sales and non-store sales and repair. (Internet sales by retailers having stores are included in the sales of the relevant store group.) Household goods and &quot;other&quot; nonfood stores experienced the greatest degree of slowing. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050421f.jpg" width="353">
It might be argued that weakening retail sales growth would result from weakening employment. However, employment growth in the UK hasn&#39;t changed much in recent months. The 0.8% in the January figure (3-month average, here representing December, January and February) is very much in line with the pace prevailing during most of last year. Thus, the smaller gains in retail trade are resulting from more sluggish spending by individual employees, not fewer employees. See the second graph, which shows a progressive deceleration in sales/employee. We can surmise that this might arise from rising energy costs, which would be absorbing more consumer income. Indeed, detailed National Accounts data through Q4 2004 indicate major increases in the costs of household utilities and vehicle fuels. GDP totals for Q1 will be reported tomorrow, 22 April. But the breakdown of expenditure detail won&#39;t be available until the June release of the national accounts. So for the present, our supposition about the role of energy must remain conditional. Then again, the recent slower pattern of retail trade may only be a reaction to more rapid expansion during 2004.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">% Changes</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
<th scope="col">Jan 2005</th>
<th scope="col">Year Ago</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Value</td>
<td>0.2</td>
<td>0.2</td>
<td>0.8</td>
<td>3.0</td>
<td>4.7</td>
<td>2.0</td>
<td>5.3</td>
</tr>
<tr>
<td class="firstcol">Total Volume</td>
<td>-0.1</td>
<td>0.3</td>
<td>0.6</td>
<td>3.7</td>
<td>6.0</td>
<td>2.9</td>
<td>6.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Mostly Food</td>
<td>0.0</td>
<td>-0.3</td>
<td>1.9</td>
<td>4.5</td>
<td>4.1</td>
<td>3.3</td>
<td>4.1</td>
</tr>
<tr>
<td class="firstcol">Mostly Non- Food Stores</td>
<td>0.2</td>
<td>0.5</td>
<td>-0.1</td>
<td>3.3</td>
<td>7.2</td>
<td>3.5</td>
<td>8.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Non-Stores</td>
<td>-3.8</td>
<td>3.5</td>
<td>-0.2</td>
<td>2.5</td>
<td>9.4</td>
<td>-5.0</td>
<td>7.2</td>
</tr>
</tbody>
</table>
</body>
</html>

Retail sales in the UK are flagging, according to the most recent couple of months' data from the Office of National Statistics. In March, sales values rose 0.2% from February, the same size gain as for February from January. These [...]

Sharp Slowdown in UK Retail Trade for Early 2005

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050421d.jpg" width="353">
The Philadelphia Fed&#39;s April Index of General Business Conditions in the manufacturing sector recovered all of the prior month&#39;s decline and rose to 25.3. Consensus expectations had been for a lesser increase to 14.0.
During the last ten years there has been a 69% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 52% correlation with q/q growth in real GDP.
The shipments index more than doubled the prior month&#39;s level and rose to its highest since August. The new orders index also rose sharply to the highest level of the year. The number of employees index recovered most of the prior two months&#39; decline. During the last ten years there has been a 64% correlation between the employment index and the three month growth in factory payrolls.
The business conditions index reflects a separate survey question, not the sub indexes.
The separate index of expected business conditions in six months improved moderately to the highest level this year.
The prices paid index also recovered much of the prior two months&#39; decline. During the last ten years there has been a 75% correlation between the prices paid index and the three month growth in the intermediate goods PPI. The correlation with the finished goods PPI has been 50% and with the CPI it&#39;s been 43%.
The Philadelphia Fed index is based on a survey of 250 regional manufacturing firms, but these firms sell nationally and internationally.
The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found <a href="http://www.phil.frb.org/files/bos/bos0405.html">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/@S504/@S504.HTM">Philadelphia Fed Business Outlook</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">April &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>25.3</td>
<td>11.4</td>
<td>32.8</td>
<td>28.1</td>
<td>10.6</td>
<td>7.7</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>50.5</td>
<td>29.7</td>
<td>51.3</td>
<td>51.3</td>
<td>16.8</td>
<td>12.3</td>
</tr>
</tbody>
</table>
</body>
</html>

The Philadelphia Fed's April Index of General Business Conditions in the manufacturing sector recovered all of the prior month's decline and rose to 25.3. Consensus expectations had been for a lesser increase to 14.0. During the last [...]

Philadelphia Fed Index Passed the Soft Spot

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050421a.jpg" width="353">
Initial unemployment insurance claims dropped a sharp 36,000 last week to 296,000. The prior week&#39;s 9,000 decline was little revised and it marked the third drop in as many weeks, to the lowest level since late 2000. Consensus expectations had been for 326,000 claims.
The figure covered the survey period for April nonfarm payrolls and was down 33,000 (10.0%) from the March period. The size of the drop may have been magnified by the early timing of Easter this year.
During the last ten years there has been a (negative) 75% correlation between the level of initial claims for unemployment insurance and the monthly change in payroll employment. There has been a (negative) 65% correlation with the level of continuing claims.
The four week moving average of initial claims fell to 330,250 (-5.4% y/y).
Continuing claims for unemployment insurance fell 17,000 following a deepened 31,000 decline the prior week.
The insured unemployment rate remained at 2.1%.
How Do Local Labor Markets in the U.S. Adjust to Immigration? from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/files/br/brq105el.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/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">04/16/05</th>
<th scope="col">04/09/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>296</td>
<td>332</td>
<td>-16.9%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,638</td>
<td>-12.3%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial unemployment insurance claims dropped a sharp 36,000 last week to 296,000. The prior week's 9,000 decline was little revised and it marked the third drop in as many weeks, to the lowest level since late 2000. Consensus [...]

Initial Unemployment Insurance Claims Fell Sharply

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

A premier time series data platform for the global strategy, research, and quant communities. 

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

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

Charts of the Week: Tariff Truce, Tenuous Trust

250501J5.jpg

250501K5.jpg

The ISM Purchasing Managers Index of activity in the manufacturing sector slipped to 48.7 in April from 49.0 during March and 50.3 in February. It remained up from a low of 46.9 in October of last year. A level of 50 is the break-even point between a rising and falling level of activity. The Action Economics Forecast Survey expected a reading of 47.8 for April. The series reached a monthly high of 63.8 in March 2021.

Two of the five component indexes weakened last month. The April production index fell to 44.0 after declining to 48.3 in March. It was the lowest level since May 2020. A lessened 19.8% (NSA) of respondents reported higher production while an increased 24.2% reported lower output. The inventories index declined to 50.8 last month from 53.4 in March. The index remained up from a low of 43.2 in October of last year.

Moving higher, the new orders index rose to 47.2 last month from 45.2 in March. The index remained below a January high of 55.1. Twenty-eight percent (NSA) of respondents reported higher new orders while 26.7% reported a decline. The employment index rose to 46.5 from 44.7 in March. It was below a high of 50.3 in January. A greater 13.1% (NSA) of respondents reported more hiring while a fewer 16.2% indicated less. The supplier delivery index rose to 55.2 from 53.5 in March. A higher 16.6% (NSA) of respondents reported slower delivery speeds while a fairly steady 6.2% reported a quickening.

The prices index, which is not part of the composite series, edged up to 69.8 (NSA) in April after increasing to 69.4 in March. It was the highest level since June 2022, up from a December 2022 low of 39.4. An increased 49.2% of respondents reported higher prices last month, up from 12.2% in November, while a higher 9.7% reported lower prices.

In other series, the export orders index plummeted to 43.1 in April from 49.6 during March. It was down from the high of 52.4 in January. The imports index fell sharply to 47.1 from 50.1 in March. It was the lowest reading since December 2023. The order backlog index dropped to 43.7 (NSA) last month from 44.5 in March. It was the lowest level in five months.

The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

250501L5.jpg

250501M5.jpg

- Declines in last three months follow earlier improvement.
- Production & inventories account for m/m shortfall.
- Prices index edges up to another three-year high.

U.S. ISM Manufacturing Index Indicates Contraction in April

250501A8.jpg

250501B8.jpg

Initial claims for unemployment insurance rose 18,000 in the week ended April 26 to 241,000, seasonally adjusted.  This is higher by 16,000 than the Action Economics Forecast Survey amount of 225,000 and is the largest amount since the week of February 22. The previous week’s actual count was revised up by 1,000, from 223,000 reported initially.

The total number of unemployment insurance beneficiaries – also known as “continuing claims” – in the week ended April 19 was 1.916 million, up 83,000 from the prior week’s 1.833 million; that earlier amount was revised down by 8,000.

The insured unemployment rate, that is, the number of beneficiaries as a percentage of covered employment, was 1.3% in the April 19 week, following 1.2% continuously since the week of January 6, 2024.

Economic conditions vary widely across states and territories.  In the week ended April 12, the highest unemployment rates were in New Jersey (2.39%), California (2.24%), Washington (2.19%), Rhode Island (2.17%) and Massachusetts (1.93%).  The lowest rates were in Florida (0.35%), South Dakota (0.40%), Alabama (0.41%), Virginia (0.45%) and Tennessee (0.48%).  Rates in other notable states include the Illinois (1.85%), New York (1.71%), Pennsylvania (1.54%) and Texas (1.09%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in U**SECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

250501C8.jpg

250501D8.jpg

- Actual initial claims amount is 16,000 more than forecast.
- Total beneficiaries rose by 83,000.
- Insured unemployment rate ticked up to 1.3% after 15 months at 1.2%.

U.S. Initial Jobless Claims Rise Notably in April 28 Week

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.

Economy in Brief: April 2005

Jump to:

UK GDP Slows in Q1; 4-Quarter Growth Lowest since Q4 2003

Construction Industry Jobs Lift Taiwan Employment; Unemployment Rate Sustains 4-Year Low

NAHB Housing Market Index Fell

Commodity Prices Meander, Forward Momentum Lost

Commodity Prices Meander, Forward Momentum Lost

Sharp Slowdown in UK Retail Trade for Early 2005

Philadelphia Fed Index Passed the Soft Spot

Initial Unemployment Insurance Claims Fell Sharply