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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423d.jpg" width="353">
The lower price-higher sales story from the housing market seemed to reverse last month, according to the National Association of Realtors. Sales of existing homes fell 3.0% last month to 4.57M and that reversed most of February&#39; 4.9% gain. Consensus expectations had been for March sales of 4.65M 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.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423e.jpg" width="353">
Working the other way were median home prices which rose 4.2% after an upwardly revised 2.1% increase. These gains may reflect, however, the end of the winter doldrums. Prices have fallen 23.5% 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 in February to a record high for the series which dates back to 1971.
Sales of existing single-family homes alone also reversed most of the earlier month&#39;s gain with a 2.8% m/m decline to 4.100M units. Sales remained near the lowest level since July 1997 and they have been essentially flat for the last four months. (These data have a longer history than the total series).
The number of unsold homes (condos &amp; single-family) on the market reversed a portion of their February increase with a 1.6% decline. Year-to-year inventories are down 9.3%. At the current sales rate there was a 9.8 months&#39; supply on the market which was near the lowest since 2007. For single-family homes the inventory also fell slightly by 1.2% (-9.7% y/y). At the current sales rate there was a 9.3 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.
Global Economy Contracts, With Slow Recovery Next Year from the International Monetary Fund can be found <a href="http://www.imf.org/external/pubs/ft/survey/so/2009/RES042209A.htm">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">March</th>
<th scope="col">February</th>
<th scope="col">March y/y %</th>
<th scope="col">March &#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>4,570</td>
<td>4,710</td>
<td>-7.1</td>
<td>4,920</td>
<td>4,893</td>
<td>5,674</td>
<td>6,516</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>690</td>
<td>750</td>
<td>-22.5</td>
<td>890</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>1,040</td>
<td>-11.1</td>
<td>1,170</td>
<td>1,130</td>
<td>1,331</td>
<td>1,494</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,710</td>
<td>1,740</td>
<td>-10.9</td>
<td>1,920</td>
<td>1,860</td>
<td>2,243</td>
<td>2,577</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,130</td>
<td>1,180</td>
<td>18.9</td>
<td>950</td>
<td>1,064</td>
<td>1,095</td>
<td>1,357</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,100</td>
<td>4,220</td>
<td>-5.7</td>
<td>4,350</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>175,200</td>
<td>168,200</td>
<td>-12.4</td>
<td>200,100</td>
<td>197,250</td>
<td>216,633</td>
<td>222,042</td>
</tr>
</tbody>
</table>


</html>

The lower price-higher sales story from the housing market seemed to reverse last month, according to the National Association of Realtors. Sales of existing homes fell 3.0% last month to 4.57M and that reversed most of February' 4.9% [...]

U.S. Existing Home Sales Slip During March As Prices Firm

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423c.jpg" align="left" border="0" height="265" width="353">
The PMI&#8217;s for the zone are up sharply in April. At 36.33 the
MFG PMI is still in the lower 11 percentile of its range. The services
reading at 43.10 is in the lower 16 percentile of its range. These are
weak positions that speak of a continuing low level of economic
activity. But there is also some good news. 
 

In April the MFG PMI has made its largest jump since the
series began in June of 1997. The MFG index is up by 2.73 points in
April. Similarly the Services PMI has risen by 2.15 points and that is
the fourth largest jump m/m rise for services since Feb of 1999 when
that series started. 
 

The jump for services comes on the heels of a 1.17 point gain
in the index in March which was the eight largest rise at that time. So
services in Europe are making greater strides toward improvement in the
last few months. 
 

Of course the level of the two indices is still very low. Both
are below the break-even line of 50; both indices attest to the
continuing unraveling of economic activity in Europe. On top of that a
new poll by the German economic think-tanks projects a 6% drop in GDP
for the year ahead in that key e-Zone country. For the UK, Barclays CEO
has just prognosticated a deep and long downturn in the UK. In France
has a new domestic survey on business sentiment says that it has gained
some small ground. 
 

There are both scattered signs of improvement in Europe and at
the same time pessimistic assessments of where the economy is as well
as of where it is going over the rest of the year. It is not clear
which of these signals markets are going to latch onto. Still, it is
reassuring to see the down drafts slowing. The report of new industrial
orders out the e-Zone today is an example of this topsy-turvy news. EMU
orders took the largest Yr/Yr drop in their history today. Still the
series reported a one of its smallest month-to-month drops. So, even as
the year /year data confirm how bad the orders drop has become, there
is evidence that the declines are set to slow. The bottom line is that
Europe is probably worse off than many have been thinking- including
the authorities that have been reluctant to act aggressively and even
stiffed the US request to do more at the recently concluded G-20 
 



<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 E-Zone</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Apr-09</td>
<td>36.66</td>
<td>43.10</td>
</tr>
<tr>
<td class="firstcol">Mar-09</td>
<td>33.93</td>
<td>40.95</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 class="odd">
<td colspan="3">Averages</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; 3-Mo</td>
<td>33.97</td>
<td>41.10</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 6-Mo</td>
<td>35.41</td>
<td>41.66</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 12-Mo</td>
<td>41.90</td>
<td>45.06</td>
</tr>
<tr class="odd">
<td colspan="3">127-Mo Range</td>
</tr>
<tr>
<td class="firstcol">&nbsp; High</td>
<td>60.47</td>
<td>62.36</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Low</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">&nbsp; % Range</td>
<td>11.6%</td>
<td>16.7%</td>
</tr>
</tbody>
</table>
</body></html>

The PMI’s for the zone are up sharply in April. At 36.33 the MFG PMI is still in the lower 11 percentile of its range. The services reading at 43.10 is in the lower 16 percentile of its range. These are weak positions that speak of a [...]

E- Area PMIs Are Still Low-Valued But Jump

<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/090423a.jpg" width="353">
The Bureau of Labor Statistics reported that job market stress reached another record level and that some leading sign of improvement is at best tentative. Continuing claims for unemployment insurance increased to a record high of 6,137,000 are more than double the year ago level. The series dates back to 1966. The four-week average of continuing claims also rose to another record of 5,944,000. Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423b.jpg" width="353">
A leading sign of developments in the labor market tends to be provided by initial claims for unemployment insurance. Though claims rose last week to an expected 640,000 from a little revised 613,000 during the prior week, they have fallen during all of this month. The average level of claims during April of 638,000 is down from 658,000 during March. However, the early timing of Easter may have played a role in the decline as the seasonal factors raised the March level. Nevertheless, claims remain near the ten-year high.
The latest claims data cover the survey week for April nonfarm payrolls. Claims held roughly stable at 640,000 with 644,000 last month. During the last ten years there has been an 86% correlation between the level of initial claims and the change in nonfarm payrolls.
The Labor Department indicated that the largest increases in initial claims for the week ending April 11 were in Florida (+9,303), Pennsylvania (+7,538), California (+6,404), Wisconsin (+3,611), and New York (+3,581), while the largest decreases were in Michigan (-12,566), North Carolina (-6,428), Missouri (-5,575), Kentucky (-5,313), and Oregon (-4,580).
The insured rate of unemployment continued its upward march. The latest level of 4.6% was double that of last April and the highest level since 1983. During the last ten years there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics.Clearly the figure understates labor market distress in some states. The highest insured unemployment rates in the week ending April 4 were in Oregon (7.7 percent), Michigan (7.6), Idaho (6.8), Wisconsin (6.7), Puerto Rico (6.6), Pennsylvania (6.3), Nevada (6.1), Rhode Island (6.0), Vermont (5.9), and Montana (5.8).
The unemployment insurance claim data is available in Haver&#39;s WEEKLY database.
Introduction to the New Keynesian Phillips Curve from the Federal Reserve Bank of Richmond is available <a href="http://www.richmondfed.org/publications/research/economic_quarterly/2008/fall/pdf/hornstein.pdf">here.</a>
The Phillips Curve and U.S. Macroeconomic Policy: Snapshots, 1958-1996 also from the Federal Reserve Bank of Richmond can be found <a href="http://www.richmondfed.org/publications/research/economic_quarterly/2008/fall/pdf/king.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"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">04/18/09</th>
<th scope="col">04/11/09</th>
<th scope="col">04/04/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>640</td>
<td>613</td>
<td>660</td>
<td>81.3%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,137</td>
<td>6,044</td>
<td>109.5%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
</tbody>
</table>
</body>
</html>

The Bureau of Labor Statistics reported that job market stress reached another record level and that some leading sign of improvement is at best tentative. Continuing claims for unemployment insurance increased to a record high of [...]

U.S. Continuing Claims for Jobless Insurance Reach Another Record

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423c.jpg" align="left" border="0">
The PMI&#8217;s for the zone are up sharply in April. At 36.33 the
MFG PMI is still in the lower 11 percentile of its range. The services
reading at 43.10 is in the lower 16 percentile of its range. These are
weak positions that speak of a continuing low level of economic
activity. But there is also some good news. 
 

In April the MFG PMI has made its largest jump since the
series began in June of 1997. The MFG index is up by 2.73 points in
April. Similarly the Services PMI has risen by 2.15 points and that is
the fourth largest jump m/m rise for services since Feb of 1999 when
that series started. 
 

The jump for services comes on the heels of a 1.17 point gain
in the index in March which was the eight largest rise at that time. So
services in Europe are making greater strides toward improvement in the
last few months. 
 

Of course the level of the two indices is still very low. Both
are below the break-even line of 50; both indices attest to the
continuing unraveling of economic activity in Europe. On top of that a
new poll by the German economic think-tanks projects a 6% drop in GDP
for the year ahead in that key e-Zone country. For the UK, Barclays CEO
has just prognosticated a deep and long downturn in the UK. In France
has a new domestic survey on business sentiment says that it has gained
some small ground. 
 

There are both scattered signs of improvement in Europe and at
the same time pessimistic assessments of where the economy is as well
as of where it is going over the rest of the year. It is not clear
which of these signals markets are going to latch onto. Still, it is
reassuring to see the down drafts slowing. The report of new industrial
orders out the e-Zone today is an example of this topsy-turvy news. EMU
orders took the largest Yr/Yr drop in their history today. Still the
series reported a one of its smallest month-to-month drops. So, even as
the year /year data confirm how bad the orders drop has become, there
is evidence that the declines are set to slow. The bottom line is that
Europe is probably worse off than many have been thinking- including
the authorities that have been reluctant to act aggressively and even
stiffed the US request to do more at the recently concluded G-20 
 



<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 E-Zone</th>
</tr></thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Apr-09</td>
<td>36.66</td>
<td>43.10</td>
</tr>
<tr>
<td class="firstcol">Mar-09</td>
<td>33.93</td>
<td>40.95</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 class="odd">
<td colspan="3">Averages</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; 3-Mo</td>
<td>33.97</td>
<td>41.10</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 6-Mo</td>
<td>35.41</td>
<td>41.66</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 12-Mo</td>
<td>41.90</td>
<td>45.06</td>
</tr>
<tr class="odd">
<td colspan="3">127-Mo Range</td>
</tr>
<tr>
<td class="firstcol">&nbsp; High</td>
<td>60.47</td>
<td>62.36</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Low</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">&nbsp; % Range</td>
<td>11.6%</td>
<td>16.7%</td>
</tr>
</tbody>
</table>
U.S. Continuing Claims for Jobless
Insurance Reach Another Record 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 23, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423a.jpg" align="left" border="0">
The Bureau of Labor Statistics reported that job market stress
reached another record level and that some leading sign of improvement
is at best tentative. Continuing claims for unemployment insurance
increased to a record high of 6,137,000 are more than double
the year ago level. The series dates back to 1966. The
four-week average of continuing claims also rose to another record of
5,944,000. Continuing claims provide some indication of workers'
ability to find employment and they lag the initial claims figures by
one week.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423b.jpg" align="right" border="0">
A leading sign of developments in the labor market tends to be
provided by initial claims for unemployment insurance. Though claims
rose last week to an expected 640,000 from a little revised 613,000
during the prior week, they have fallen during all of this month. The
average level of claims during April of 638,000 is down from 658,000
during March. However, the early timing of Easter may have played a
role in the decline as the seasonal factors raised the March level.
Nevertheless, claims remain near the ten-year high.
The latest claims data cover the survey week for April nonfarm
payrolls. Claims held roughly stable at 640,000 with 644,000 last
month. During the last ten years there has been an 86% correlation
between the level of initial claims and the change in nonfarm payrolls.
The Labor Department indicated that the largest increases in
initial claims for the week ending April 11 were in Florida (+9,303),
Pennsylvania (+7,538), California (+6,404), Wisconsin (+3,611), and New
York (+3,581), while the largest decreases were in Michigan (-12,566),
North Carolina (-6,428), Missouri (-5,575), Kentucky 
(-5,313), and Oregon (-4,580).
The insured rate of unemployment continued its upward march.
The latest level of 4.6% was double that of last April and the highest
level since 1983. During the last ten years there has been a 93%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.Clearly the figure understates labor market distress in some
states. The highest insured unemployment rates in the week ending April
4 were in Oregon (7.7 percent), Michigan (7.6), Idaho (6.8), Wisconsin
(6.7), Puerto Rico (6.6), Pennsylvania (6.3), Nevada (6.1), Rhode
Island (6.0), Vermont (5.9), and Montana (5.8).
The unemployment insurance claim data is available in Haver's WEEKLY
database.
Introduction to the New Keynesian Phillips Curve from
the Federal Reserve Bank of Richmond is available <a href="http://www.richmondfed.org/publications/research/economic_quarterly/2008/fall/pdf/hornstein.pdf">here.</a>
The Phillips Curve and U.S. Macroeconomic Policy:
Snapshots, 1958-1996 also from the Federal Reserve Bank of
Richmond can be found <a href="http://www.richmondfed.org/publications/research/economic_quarterly/2008/fall/pdf/king.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"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">04/18/09</th>
<th scope="col">04/11/09</th>
<th scope="col">04/04/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>640</td>
<td>613</td>
<td>660</td>
<td>81.3%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,137</td>
<td>6,044</td>
<td>109.5%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
</tbody>
</table>
U.S. Existing Home Sales Slip
During March As Prices Firm 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 23, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423d.jpg" align="left" border="0">
The lower price-higher sales story from the housing market
seemed to reverse last month, according to the National Association of
Realtors. Sales of existing homes fell 3.0% last
month to 4.57M and that reversed most of February' 4.9% gain. Consensus
expectations had been for March sales of 4.65M 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.
<blockquote><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090423e.jpg" align="right" border="0">

Working the other way were median home prices
which rose 4.2% after an upwardly revised 2.1% increase. These gains
may reflect, however, the end of the winter doldrums. Prices have
fallen 23.5% 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 in February to a record high for the series which dates
back to 1971.
</blockquote>

Sales of existing single-family homes alone also reversed most
of the earlier month's gain with a 2.8% m/m decline to 4.100M units.
Sales remained near the lowest level since July 1997 and they have been
essentially flat for the last four months. (These data have a longer
history than the total series).
The number of unsold homes (condos &amp; single-family) on
the market reversed a portion of their February increase with a 1.6%
decline. Year-to-year inventories are down 9.3%. At the current sales
rate there was a 9.8 months' supply on the market which was near the
lowest since 2007. For single-family homes the inventory also fell
slightly by 1.2% (-9.7% y/y). At the current sales rate there was a 9.3
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.
Global Economy Contracts, With Slow Recovery Next
Year from the International Monetary Fund can be found <a href="http://www.imf.org/external/pubs/ft/survey/so/2009/RES042209A.htm">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">March</th>
<th scope="col">February</th>
<th scope="col">March y/y %</th>
<th scope="col">March '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>4,570</td>
<td>4,710</td>
<td>-7.1</td>
<td>4,920</td>
<td>4,893</td>
<td>5,674</td>
<td>6,516</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>690</td>
<td>750</td>
<td>-22.5</td>
<td>890</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>1,040</td>
<td>-11.1</td>
<td>1,170</td>
<td>1,130</td>
<td>1,331</td>
<td>1,494</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,710</td>
<td>1,740</td>
<td>-10.9</td>
<td>1,920</td>
<td>1,860</td>
<td>2,243</td>
<td>2,577</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,130</td>
<td>1,180</td>
<td>18.9</td>
<td>950</td>
<td>1,064</td>
<td>1,095</td>
<td>1,357</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,100</td>
<td>4,220</td>
<td>-5.7</td>
<td>4,350</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>175,200</td>
<td>168,200</td>
<td>-12.4</td>
<td>200,100</td>
<td>197,250</td>
<td>216,633</td>
<td>222,042</td>
</tr>
</tbody>
</table>
</body></html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090422a.jpg" align="left" border="0">
The UK claimant count and the unemployment rate continue to
spurt higher. The count is the highest since the late 1990s (August
1998, for the percentage rate). Unemployment is skyrocketing. The
number of unemployed persons rose m/m by 6.6% in January, by an
outsized 10.9% in February, and by a slower but still bruising 5.3% in
March. Employment levels (available only through January) show
continuing accelerating declines. 
 

The progressive growth rates (from 3Mo to 6Mo to 12Mo) show
accelerating rates of unemployment rising at an annualized rate of 140%
over the most recent 3-Mo period. Employment levels are dropping at an
accelerating pace which has risen to an annual rate of -1.7%. The
larger impact on unemployment growth comes about since employment
levels are high as a percentage of the labor force while unemployment
levels are low. When &#8216;small amounts&#8217; are pared from the roles of the
employed they can quickly become a huge proportion of the unemployed.
Of course in historic context unemployment is hardly &#8216;small&#8217; I simple
refer to &#8216;size&#8217; as a proportion of the labor market and relative to the
&#8216;employment rate&#8217; which at over 95% is quite large compared to
unemployment at 4.5%. In that context the unemployment rate is &#8216;small&#8217;.
It is this size mismatch that results in most of the extreme difference
in growth rates for the employed Vs the jobless in addition to some
less mechanical labor behavior. (like labor force participation) . 
 

In response to these worsening trends Alistair Darling
Chancellor of the exchequer has switched his budget forecast. He now
sees that the UK economy will shrink by 3.5% - the worst contraction in
modern times. The Darling also projects a deepening deflation with the
RPI gauge falling to minus 3% by September. But the forecast still
provides that the economy will begin to pick up by the end of the year,
with a moderate positive growth rate of 1.25% restored in 2010. 
 

Darling has also announced help for jobless young people and a
car scrap-for cash scheme. A £2,000 stipend is to be paid to car owners
who trade in autos over 10 years in age for new ones. It is not clear
how much of this payment will be diverted to dealers who might offer
poorer trade-in prices and how much will actually get to the pocketbook
of those buying the new car and stimulate new purchases. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="7" scope="col">UK job market trends</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Level</td>
<td>Mar-09</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>3-mo Avg</td>
<td>6-Mo</td>
<td>12-Mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">Claimant count U-rate</td>
<td>4.5</td>
<td>4.3</td>
<td>3.9</td>
<td>4.2</td>
<td>3.8</td>
<td>3.2</td>
</tr>
<tr class="grey2">
<td class="firstcol">U-Rate (Harmonized)</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>6.3</td>
<td>6.0</td>
<td>5.6</td>
</tr>
<tr class="grey3">
<td class="firstcol">% Period/Period</td>
<td>m/m</td>
<td>m/m</td>
<td>m/m</td>
<td>3-Mo% AR</td>
<td>6-Mo% AR</td>
<td>12-Mo% AR</td>
</tr>
<tr class="grey3">
<td class="firstcol">Unemployed (000)*</td>
<td>5.3%</td>
<td>10.9%</td>
<td>6.6%</td>
<td>140.4%</td>
<td>134.2%</td>
<td>84.9%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Employment (000)**</td>
<td>#N/A</td>
<td>#N/A</td>
<td>-0.4%</td>
<td>-1.7%</td>
<td>-1.0%</td>
<td>-0.8%</td>
</tr>
<tr class="grey3">
<td colspan="7">Note: Multi-Mo calculations
are * lagged by three months; lagged by two-months</td>
</tr>
</tbody>
</table>
</body></html>

The UK claimant count and the unemployment rate continue to spurt higher. The count is the highest since the late 1990s (August 1998, for the percentage rate). Unemployment is skyrocketing. The number of unemployed persons rose m/m by [...]

UK Unemployment Continues To Soar (Sour)

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090422a.jpg" align="left" border="0">
The UK claimant count and the unemployment rate continue to
spurt higher. The count is the highest since the late 1990s (August
1998, for the percentage rate). Unemployment is skyrocketing. The
number of unemployed persons rose m/m by 6.6% in January, by an
outsized 10.9% in February, and by a slower but still bruising 5.3% in
March. Employment levels (available only through January) show
continuing accelerating declines. 
 

The progressive growth rates (from 3Mo to 6Mo to 12Mo) show
accelerating rates of unemployment rising at an annualized rate of 140%
over the most recent 3-Mo period. Employment levels are dropping at an
accelerating pace which has risen to an annual rate of -1.7%. The
larger impact on unemployment growth comes about since employment
levels are high as a percentage of the labor force while unemployment
levels are low. When &#8216;small amounts&#8217; are pared from the roles of the
employed they can quickly become a huge proportion of the unemployed.
Of course in historic context unemployment is hardly &#8216;small&#8217; I simple
refer to &#8216;size&#8217; as a proportion of the labor market and relative to the
&#8216;employment rate&#8217; which at over 95% is quite large compared to
unemployment at 4.5%. In that context the unemployment rate is &#8216;small&#8217;.
It is this size mismatch that results in most of the extreme difference
in growth rates for the employed Vs the jobless in addition to some
less mechanical labor behavior. (like labor force participation) . 
 

In response to these worsening trends Alistair Darling
Chancellor of the exchequer has switched his budget forecast. He now
sees that the UK economy will shrink by 3.5% - the worst contraction in
modern times. The Darling also projects a deepening deflation with the
RPI gauge falling to minus 3% by September. But the forecast still
provides that the economy will begin to pick up by the end of the year,
with a moderate positive growth rate of 1.25% restored in 2010. 
 

Darling has also announced help for jobless young people and a
car scrap-for cash scheme. A £2,000 stipend is to be paid to car owners
who trade in autos over 10 years in age for new ones. It is not clear
how much of this payment will be diverted to dealers who might offer
poorer trade-in prices and how much will actually get to the pocketbook
of those buying the new car and stimulate new purchases. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="7" scope="col">UK job
market trends</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Level</td>
<td>Mar-09</td>
<td>Feb-09</td>
<td>Jan-09</td>
<td>3-mo Avg</td>
<td>6-Mo</td>
<td>12-Mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">Claimant count U-rate</td>
<td>4.5</td>
<td>4.3</td>
<td>3.9</td>
<td>4.2</td>
<td>3.8</td>
<td>3.2</td>
</tr>
<tr class="grey2">
<td class="firstcol">U-Rate (Harmonized)</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>6.3</td>
<td>6.0</td>
<td>5.6</td>
</tr>
<tr class="grey3">
<td class="firstcol">% Period/Period</td>
<td>m/m</td>
<td>m/m</td>
<td>m/m</td>
<td>3-Mo% AR</td>
<td>6-Mo% AR</td>
<td>12-Mo% AR</td>
</tr>
<tr class="grey3">
<td class="firstcol">Unemployed (000)*</td>
<td>5.3%</td>
<td>10.9%</td>
<td>6.6%</td>
<td>140.4%</td>
<td>134.2%</td>
<td>84.9%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Employment (000)**</td>
<td>#N/A</td>
<td>#N/A</td>
<td>-0.4%</td>
<td>-1.7%</td>
<td>-1.0%</td>
<td>-0.8%</td>
</tr>
<tr class="grey3">
<td colspan="7">Note: Multi-Mo calculations
are * lagged by three months; lagged by two-months</td>
</tr>
</tbody>
</table>
</body></html>

Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 




<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090421c.jpg" align="right" border="0" height="265" width="353">For the first time since
July 2007 when wind of the sub prime mortgage
crisis in the United States began to surface, there were more optimists
than pessimists among German analysts and institutional investors
regarding the outlook six months ahead.&nbsp; The ZEW Center for
European Economic Research at Mannheim reported today that its measure
of investor expectations (the percent balance between positive and
negative opinions) rose from -3.5% to +13%.&nbsp; The excess of
optimists is, however, well below the 71.0% reached in January, 2006
and also the&nbsp; historical average of 26.1%.&nbsp; It is
however, encouraging.&nbsp;<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090421d.jpg" align="right" border="0" height="265" width="353">
The ZEW expectation indicator has
performed reasonably well in heralding changes in German GDP and their
magnitudes, as can be seen in the first chart.
While there was an improvement in expectations among the
participants
in the survey, there was a worsening in their appraisal of the current
conditions.&nbsp; The excess of pessimists over optimists rose to
91.6% from 89.4%.&nbsp; An excess of pessimists this large was last
seen in September, 2003.&nbsp; The second chart shows the balances
of opinion on expectations and current conditions.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090421e.jpg" align="right" border="0" height="265" width="353">The ZEW
survey also includes the participants' expectations for profits in a
number of industries.&nbsp; In general the balances of opinion on
profit expectations also turned negative around August, 2007 and became
more and more negative until the last few months.&nbsp; Since then,
most balances of opinion have become less negative.&nbsp; The
exception is the expectation for profits in the banking industry where
the optimists exceed the pessimists by 2% for the first time since July
2007.&nbsp; The third chart shows the profit expectations for the
banking industry and a few other industries.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"> ZEW
INDICATORS (% balance)&nbsp;</th>
<th scope="col">Apr 09</th>
<th scope="col">Mar&nbsp;&nbsp;
09</th>
<th scope="col">Previous Low</th>
<th scope="col">Date</th>
<th scope="col">Previous High</th>
<th scope="col">Date&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Expectations</td>
<td>13.0</td>
<td>-3.5</td>
<td>-63.9</td>
<td>&nbsp;&nbsp;&nbsp; Jul 08</td>
<td>&nbsp;71.0</td>
<td>Jan 06</td>
</tr>
<tr class="grey3">
<td class="firstcol">Current Conditions</td>
<td>-91.6</td>
<td>&nbsp;&nbsp;&nbsp; -89.4</td>
<td>&nbsp;&nbsp;&nbsp;&nbsp; -91.7</td>
<td>Sep 03</td>
<td>88.7</td>
<td>Jun 07</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey4">
<td class="firstcol">Profit Expectations</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey1">
<td class="firstcol">Banking</td>
<td>2.0</td>
<td>&nbsp;-31.6</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">Telecommunications</td>
<td>-13.0</td>
<td>-16.1</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey4">
<td class="firstcol">Vehicles/Automotive</td>
<td>-56.1</td>
<td>-70.2</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Insurance</td>
<td>-15.1</td>
<td>-34.2</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>

</body></html>

For the first time since July 2007 when wind of the sub prime mortgage crisis in the United States began to surface, there were more optimists than pessimists among German analysts and institutional investors regarding the outlook six [...]

Optimists Exceed Pessimists Among German Investors And Analysts For The First Time Since July 2007

<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" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090421a.jpg">
Regular gasoline prices last week held firm at $2.06 per gallon, the highest level since last November. The latest was up 42 cents from the December low. On news of a weakening U.S. economy, however, the spot market price for regular gasoline slipped to $1.37 per gallon yesterday from its average of $1.42 last week. 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" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090421b.jpg">
 Crude oil prices weakened to an even greater degree due to soft economic news. The price for a barrel of West Texas Intermediate fell to $49.80 last week and to $45.88 yesterday. These prices remained up, however, from the December low of $32.37 per barrel. Prices reached a high of $145.66 last July. The figures on crude oil production and inventories are available in Haver&#39;s Weekly Oil Statistics database.
Higher gasoline prices and economic weakness are prompting less driving. Gasoline demand last week fell 2.4% y/y versus 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 5.2% y/y. That negative comparison was led by a 9.3% decline in distillate demand and a 19.7% drop in demand for residual fuel oil. These numbers are available in Haver&#39;s OILWKLY database.
The price of natural gas fell even further with the end to of winter heating season. Prices fell to $3.55 per mmbtu (-65.0% y/y) which was near 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.
The Economic Outlook is yesterday&#39;s speech by Fed Vice chairman Donald L. Kohn an it can be found <a href="http://www.federalreserve.gov/newsevents/speech/kohn20090420a.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">04/20/09</th>
<th scope="col">06/13/09</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>2.06</td>
<td>2.05</td>
<td>-41.3%</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>49.80</td>
<td>50.46</td>
<td>-56.5%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>
</body>
</html>

Regular gasoline prices last week held firm at $2.06 per gallon, the highest level since last November. The latest was up 42 cents from the December low. On news of a weakening U.S. economy, however, the spot market price for regular [...]

Gasoline Prices Remain Steady Around $2.00 Per Gallon

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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

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


Privacy Policy

Disclaimer

Contact us

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

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

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

Charts of the Week: Tariff Truce, Tenuous Trust

250430N1.jpg

250430O1.jpg

Real GDP eased 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. It was the first decline since Q1 2022.

Foreign trade subtracted 4.83 percentage points from growth last quarter as imports surged 41.3% (13.4% y/y) ahead of tariffs, which began to come into effect in the first quarter. The rise followed a 1.9% decline in Q4’24. Exports rose 1.8% (3.0% y/y) after easing 0.2% in Q4. Inventories added 2.25 percentage points to growth after subtracting 0.84 percentage point from Q4 growth.

Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1 after rising 3.0% in Q4. Personal consumption expenditures rose 1.8% (3.1% y/y) following a 4.0% gain. Durable goods spending fell 3.4% (+5.3% y/y) after surging 12.4% in Q4. Motor vehicle purchases declined 11.1% (+5.5% y/y) after strengthening 19.7% in Q4. Spending on home furnishings & appliances gained 1.5% (6.1% y/y) following a 5.4% rise. Recreational goods & vehicle outlays rose 2.5% (7.0% y/y) last quarter after a 13.9% Q4 increase.

Nondurable goods outlays rose 2.7% (3.0% y/y) following 3.1% growth in Q4. Apparel spending increased 6.7% (2.5% y/y) following a 5.0% rise. Food & beverage buying gained 2.5% (2.3% y/y) after a 1.8% increase. Gasoline & fuel oil purchases increased 4.6% (3.4% y/y) after falling 2.0% in Q4.

Spending on services increased 2.4% last quarter (2.7% y/y) after a 3.0% gain. Outlays on housing & utilities increased 3.4% (1.8% y/y) after rising 1.1% in Q4. Health care expenditures rose 4.0% (4.8% y/y) following a 4.7% strengthening. Transportation outlays increased 5.3% (4.6% y/y) after a 3.7% rise while recreation spending rose 4.7% (2.8% y/y) following a 4.5% rise. Restaurant & hotel expenditures declined 2.1% (+0.5% y/y) following a 2.8% rise. Financial services expenditures rose 1.9% (2.0% y/y) after a 3.1% Q4 increase.

Business fixed investment increased 9.8% (3.6% y/y) following a 3.0% decline in Q4. Expenditures on structures rose 0.4% (-0.4% y/y) after a 2.9% increase. Expenditures on producers’ durable equipment jumped 22.5% (8.0% y/y) after falling 8.7%.  Outlays on information processing equipment soared 69.3% (18.9% y/y) following a 7.3% decline. Industrial equipment investment fell 1.4% (-0.3% y/y) after easing 0.9%. Intellectual property product spending rose 4.1% (1.8% y/y) following a 0.5% decline. 

Residential structures investment increased 1.3% (-0.1% y/y) in Q1 after a 5.5% Q4 rise.

250430P1.jpg

250430Q1.jpg

Government spending fell 1.5% (+2.4% y/y) after a 3.1% Q4 rise. Federal government expenditures declined 5.1% (+2.9% y/y) after rising 4.0% in Q4. National defense expenditures declined 8.0% (+4.0% y/y) after increasing 4.8% in Q4. State & local government spending rose 0.8% (2.1% y/y) following a 2.5% rise.

The GDP price index rose 3.7% (2.6% y/y) after increasing 2.3% in Q4. It was the largest increase since Q4’22. A 2.4% increase had been expected. The PCE chain price index increased 3.6% (2.5% y/y) following a 2.4% rise. The PCE price index excluding food and energy rose 3.5% (2.8% y/y) after increasing 2.6% in Q4. The business fixed investment price index rose 0.4% (1.8% y/y) after 1.5% rise. The residential price index strengthened 3.9% (3.2% y/y) after a 1.9% rise while the government price index increased 4.7% (2.8% y/y) following a 2.1% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

250430R1.jpg

250430S1.jpg

- Decline in GDP is first in three years.
- Foreign trade subtracts substantially ahead of tariffs.
- Domestic final demand growth weakens.
- Price index strengthens with higher core PCE prices.

U.S. GDP Unexpectedly Declines in Q1’25; Prices Strengthen

Michael J. Moran

250430A.jpg

250430B.jpg

High-side readings on the price indexes for personal consumption expenditures in January and February caused some concern about emerging price pressure, especially with some policies of the Trump administration possibly adding to the upward force. However, March brought notable relief, with the headline price index falling slightly (-0.04%). A marked decline in energy prices was helpful (-2.7%), but core prices also were subdued, increasing less than 0.1%.  Year-over-year changes were still above the Fed’s target of 2%, but only barely so for the headline measure (2.3%). The core index backed away from the reading of 3.0% in February, but the latest reading of 2.7% was in line with observations in the past year, and still uncomfortably above target.

Consumers roused from a winter slumber in March, with nominal outlays increasing 0.7%. With inflation restrained, real outlays also posted a gain of 0.7%. Spending on durable gods stood out, with real outlays advancing 3.2%. Real outlays for both nondurable goods and services rose 0.4%, a solid pace. Signs of life were certainly welcome after an average decline of 0.1% in January and February. The March rebound left growth of 1.8% (annual rate) in the first quarter.

The brisk increase in spending in March was supported by a solid gain in personal income (0.5% in both nominal and real terms). Growth in wage income was firm at 0.5%, while proprietors’ income was robust with a gain of 1.8% (not annualized!). The farm sector led the advance in proprietors’ income, but the nonfarm sector also was strong (0.6%).

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

250430C.jpg

250430D.jpg

- Price pressure eases.
- Spending rebounds after two soft months.

Personal Income, Consumption, and Prices in March

250430F20.jpg

250430G20.jpg

The Pending Home Sales Index, a forward-looking home sales measure based on contract signings, from the National Association of Realtors rose 6.1% to 76.5 (-0.6% y/y) during March after rising a little-revised 2.1% in February. These changes followed a 4.6% January decline.

The rise in March sales occurred as the rate on a 30-year mortgage eased to an average 6.65% from 6.84% in February. This rate was well above a low of 2.68% averaged in December 2020.

Pending home sales were up in most regions of the country. Sales in the Midwest rose 4.9% (1.4% y/y) last month after rising 1.8% in February. Sales in the South increased 9.8% (-0.4% y/y) following a 5.8% February rise. Sales in the West improved 4.8% (-2.0% y/y) after falling 3.0% in February. Sales in the Northeast were off 0.5% (-3.0% y/y) in March after falling 0.9% in February.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Sales rise to highest level in four months.
- Strength is evident throughout most of country.

U.S. Pending Home Sales Surge in March

Sandy Batten

250430F5.jpg

250430G5.jpg

The employment cost index (ECI) for civilian workers, arguably the most accurate measure of labor compensation in the United States, rose 0.9% q/q (3.6% y/y) in Q1, the same quarterly increase as in last year’s Q4, according to the Bureau of Labor Statistics. The quarterly gains have fluctuated between 0.8% and 1.0% for the past six quarters. The Action Economics Forecast Survey had expected a 0.9% q/q increase and a 3.5% y/y gain.

Wages and salaries for civilian workers rose 0.8% q/q (3.5% y/y) in Q1, down from 1.0% q/q in Q4. This tied the Q3 2024 quarterly rise as the smallest increase since Q2 2021. It was also the smallest y/y increase since Q2 2021. Benefits increased by an outsized 1.2% q/q (3.9% y/y) in Q1 versus 0.8% q/q in Q4. This is the largest quarterly gain since Q2 2022. In general, employment cost gains remain above the pace observed prior to the pandemic but are slowing gradually.

Private industry workers’ compensation rose 0.8% q/q (3.4% y/y) in Q1, down from 0.9% q/q (3.6% y/y) in Q4. Wages and salaries for private industry workers increased 0.8% q/q (3.4% y/y) in Q1 versus 0.8% q/q (3.7% y/y) in Q4. The quarterly gain in Q1 tied that in Q3 2024 as the smallest increase since Q4 2020. Benefits for private industry workers jumped 1.2% q/q (3.6% y/y). the largest quarterly gain since Q2 2022. The acceleration in benefits in Q1 was primarily in service-producing industries.

Compensation in private goods-producing industries increased 1.0% q/q (3.2% y/y) in Q1, the largest quarterly gain in five quarters, versus a 0.7% q/q increase in Q4. Compensation in construction jumped 1.3% q/q, its largest quarterly increase since Q2 2022, up from a 0.6% q/q gain in Q4. Manufacturing compensation growth slowed to 0.7% q/q, its slowest quarterly advance since Q4 2020, from 0.8% q/q in Q4. Compensation in private service-producing industries increased 0.8% q/q (3.5% y/y), down slightly from a 0.9% q/q gain in Q4. Compensation in education and health services jumped 1.3% q/q, its largest quarterly gain since Q3 2023. In contrast, compensation in other services edged up 0.1% q/q in Q1, its smallest quarterly advance since before the pandemic.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

250430H5.jpg

250430I5.jpg

- Compensation grew 0.9 q/q in Q1, the same pace as in Q4.
- Wage growth slowed to 0.8% q/q while benefits surged 1.2% q/q, their largest quarterly increase since Q2 2022.

Economy in Brief: April 2009

Jump to:

U.S. Existing Home Sales Slip During March As Prices Firm

E- Area PMIs Are Still Low-Valued But Jump

U.S. Continuing Claims for Jobless Insurance Reach Another Record

E- Area PMIs Are Still Low-Valued But Jump

UK Unemployment Continues To Soar (Sour)

UK Unemployment Continues To Soar (Sour)

Optimists Exceed Pessimists Among German Investors And Analysts For The First Time Since July 2007

Gasoline Prices Remain Steady Around $2.00 Per Gallon