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/070823e.jpg" width="353">
For all the media hype regarding the &quot;subprime&quot; loan issuance problem, the latest data issued by the Federal Reserve Board for 2Q07 indicate only slight increases in delinquent payments on consumer, real estate and commercial &amp; industrial loans at commercial banks.
Even if delinquencies rise further this quarter (which they probably will), the levels are still quite low absolutely and relative to historical comparison, i.e., relative to the late 1980s and the early 1990s.
For all loans and leases, the delinquency rate increased to 1.86% during the second quarter from 1.72% during 1Q07. That level is up versus 1.57% during the prior two years but, still, it is only a third of the delinquency rate during the last two recessions.
The rise in delinquent payments on residential real estate loans indeed is more dramatic to 2.28% from 2.07% in 1Q07. It is equal to where it was during the last recession. Yet these figures are below the high seen in 1991 of 3.32%. Again, these comments await the update for this quarter.
For consumer loans, the delinquency rate rose to 3.02% from 2.98% during 1Q. That&#39;s up from the 2005 low of 2.82%, but down from the highs during the last two recessions. It&#39;s lower even than the 3.75% range that prevailed during the late 1990s expansion.
Delinquencies on C&amp;I loans actually fell q/q to 1.17% from 1.18% during 1Q. Delinquent C&amp;I loans last year averaged 1.27% of the total outstanding.
These data series are available in Haver&#39;s USECON database.
Subprime Mortgages is recent Congressional testimony delivered by Sandra F. Braunstein of the Federal Reserve Board and it is available <a href="http://www.federalreserve.gov/boarddocs/testimony/2007/20070327/default.htm"> here</a>.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070823f.jpg" width="353"><img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070823g.jpg" width="353">

</body>
</html>

For all the media hype regarding the "subprime" loan issuance problem, the latest data issued by the Federal Reserve Board for 2Q07 indicate only slight increases in delinquent payments on consumer, real estate and commercial & [...]

U.S. Loan Delinquencies Up Slightly, But Still Low

Robert Brusca

<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/070823d.jpg" width="353">
Germany is a much more export oriented economy than is the United States. With the formation of the EMU, Germany was helped by having a large proportion of its trade no longer subject to foreign exchange fluctuations. Goods sold outside Germany are still exports, but if they are sold to EMU members the currency of the transaction does not change.
German private consumption is only 55% of German GDP. Compared to the US where personal consumption is over 70% of GDP.Also German exports are 49% of GDP whereas in the US exports of goods and service are only about 11% of GDP. The German economy has a structure very different from the US. Still at 55% of GDP the German economy needs to get the consumer involved to have its expansion last. Germany&#146;s economy is being carried by its export strength compared to weaker imports and strong business capital formation. But it will need more for the expansion to endure. Germany like many other EMU countries continues to show that order demand outside the country is much stronger than within. Overall orders remain strong for Germany and France. For the time being the expansion still seems to be in place. But it must broaden. The risk cited recently in the Zew survey is that confidence may have been hurt by financial turmoil. This remains something to be on the look-out for in Germany as well as throughout the Euro area.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
German GDP
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td> GDP</td>
<td> Private Consumption</td>
<td> Public Consumption</td>
<td> Total Capital Formation</td>
<td> Housing</td>
<td> Exports</td>
<td> Imports</td>
<td> Domestic Demand</td>
</tr>
<tr class="odd">
<td colspan="9"> % change Q/Q; X-M is Q/Q change in billions of chained 2000 euros</td>
</tr>
<tr>
<td class="firstcol">Q2-07</td>
<td>1.0%</td>
<td>2.5%</td>
<td>-0.7%</td>
<td>10.3%</td>
<td>-18.0%</td>
<td>3.6%</td>
<td>-3.5%</td>
<td>-2.2%</td>
</tr>
<tr>
<td class="firstcol">Q1-07</td>
<td>2.2%</td>
<td>-7.0%</td>
<td>6.9%</td>
<td>15.7%</td>
<td>5.8%</td>
<td>-1.2%</td>
<td>8.7%</td>
<td>6.8%</td>
</tr>
<tr>
<td class="firstcol">Q4-06</td>
<td>4.0%</td>
<td>3.4%</td>
<td>0.0%</td>
<td>10.8%</td>
<td>6.2%</td>
<td>23.0%</td>
<td>5.4%</td>
<td>-3.6%</td>
</tr>
<tr>
<td class="firstcol">Q3-06</td>
<td>3.0%</td>
<td>1.4%</td>
<td>2.1%</td>
<td>-2.4%</td>
<td>8.0%</td>
<td>13.9%</td>
<td>14.9%</td>
<td>2.7%</td>
</tr>
<tr class="odd">
<td colspan="9"> % change Yr/Yr; X-M is Yr/Yr change in Gap in billions of chained 2000 euros</td>
</tr>
<tr>
<td class="firstcol">Q2-07</td>
<td>2.5%</td>
<td>0.0%</td>
<td>2.0%</td>
<td>8.4%</td>
<td>-0.1%</td>
<td>9.4%</td>
<td>6.2%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">Q1-07</td>
<td>3.6%</td>
<td>-0.5%</td>
<td>2.1%</td>
<td>11.7%</td>
<td>12.7%</td>
<td>10.4%</td>
<td>7.9%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">Q4-06</td>
<td>3.9%</td>
<td>2.2%</td>
<td>0.9%</td>
<td>7.1%</td>
<td>6.6%</td>
<td>16.1%</td>
<td>9.7%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">Q3-06</td>
<td>3.2%</td>
<td>0.6%</td>
<td>0.8%</td>
<td>9.4%</td>
<td>7.2%</td>
<td>11.6%</td>
<td>11.0%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">5-Yrs</td>
<td>1.3%</td>
<td>0.2%</td>
<td>0.4%</td>
<td>5.8%</td>
<td>-0.7%</td>
<td>7.8%</td>
<td>6.9%</td>
<td>0.7%</td>
</tr>
</tbody>
</table>
</body>
</html>

Germany is a much more export oriented economy than is the United States. With the formation of the EMU, Germany was helped by having a large proportion of its trade no longer subject to foreign exchange fluctuations. Goods sold [...]

German GDP Rebound Still Not Supported by the Consumer

<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/070823c.jpg" width="353">
The BNB index fell to 3.3 in August from 4.2 in July and, along with the German Zew index, it gives us a signal of softening activity in the Euro area. However the decline in the index is not severe and the Belgian metric continues to signal small gains year-over-year. There is no evidence of financial contagion here.
This index does not apply to one of the large Euro countries, but it is an actual survey of industry respondents not just of financial experts, unlike Germany&#146;sZew Index. Also it is available earlier than most major Euro area country surveys. And those are the reasons we are attracted to it. Since Belgium is well-integrated into the EU and is a relatively small economy its activity tends to reflect that of its larger neighbors. Not surprisingly this report is treated as a harbinger of sorts for the upcoming EU and German surveys.
Viewed in that way the Belgian index&#146;s slide is not very severe. The Zew index in Germany fell by more partly because it is executed on a survey of financial experts who might see trouble coming before it hits real data or who might exaggerate the importance of a financial disruption to the real economy. At this point, we do not know if Zew respondents are prescient or lacking in staying power. In truth neither do we really know how widespread disruptions will get or even how widespread they ARE. But the BNB Survey says as of this time the slowdown is minor &#150; at least in Belgium.
This survey like others before it and others for other Euro area member countries, displays weaker domestic than foreign orders. This has become a Euro area theme of sorts. And while the total order assessment is lower than a year ago, foreign orders are assessed stronger. Wholesaling and retailing in Belgium continue to climb even though the joint sector reading is lower on a year/year basis. On balance Belgium does not seem much affected by the financial turmoil. On the other hand it is not clear how much turmoil had been underway at the time respondents filled in their surveys. Contagion is something we will continue to watch for over the next several months at least. 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Belgium National Bank Indices
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Aug-07</td>
<td>Jul-07</td>
<td>Jun-07</td>
<td>3-Mo Change</td>
<td>6-Mo Change</td>
<td>12-Mo Change</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Industry</td>
<td>3.3</td>
<td>4.2</td>
<td>5.5</td>
<td>-0.6</td>
<td>-0.2</td>
<td>0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Manufacturing</td>
<td>2.8</td>
<td>4.5</td>
<td>6.5</td>
<td>-1.1</td>
<td>0.8</td>
<td>-0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Production</td>
<td>4.0</td>
<td>4.0</td>
<td>8.0</td>
<td>-1.0</td>
<td>-2.0</td>
<td>-2.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic Orders</td>
<td>1.0</td>
<td>-2.0</td>
<td>5.0</td>
<td>-3.0</td>
<td>-7.0</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign Orders</td>
<td>9.0</td>
<td>14.0</td>
<td>11.0</td>
<td>6.0</td>
<td>2.0</td>
<td>10.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices</td>
<td>2.0</td>
<td>7.0</td>
<td>13.0</td>
<td>-5.0</td>
<td>-9.0</td>
<td>-9.0</td>
</tr>
<tr>
<td colspan="7">Current Assets</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total Orders</td>
<td>0.0</td>
<td>2.0</td>
<td>3.0</td>
<td>-4.0</td>
<td>0.0</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Foreign Orders</td>
<td>2.0</td>
<td>4.0</td>
<td>4.0</td>
<td>1.0</td>
<td>5.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Inventories</td>
<td>0.0</td>
<td>-3.0</td>
<td>-7.0</td>
<td>1.0</td>
<td>-4.0</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Wholesale &amp; Retail Trade</td>
<td>6.5</td>
<td>4.8</td>
<td>4.2</td>
<td>-0.8</td>
<td>0.7</td>
<td>5.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>2.3</td>
<td>2.1</td>
<td>2.3</td>
<td>2.0</td>
<td>-6.0</td>
<td>-1.7</td>
</tr>
<tr>
<td class="firstcol">Comparisons:</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="3">Changes lag one month</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; EU Index: Industry</td>
<td>#N/A</td>
<td>5.0</td>
<td>6.0</td>
<td>-2.0</td>
<td>-1.0</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Germany Index: Industry</td>
<td>#N/A</td>
<td>8.0</td>
<td>9.0</td>
<td>-1.0</td>
<td>-1.0</td>
<td>3.0</td>
</tr>
</tbody>
</table>
</body>
</html>

The BNB index fell to 3.3 in August from 4.2 in July and, along with the German Zew index, it gives us a signal of softening activity in the Euro area. However the decline in the index is not severe and the Belgian metric continues to [...]

Belgian National Bank Index Declines in August

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070823a.jpg" width="353">
Initial claims for unemployment insurance fell slightly last week, back to the level initially reported for the prior period. Claims for the week ending 8/18 fell to 322,000 from 324,000 during the week ended 8/11. Consensus expectations were for 320,000 claims in the latest week.
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.
The latest figure is for the survey period for nonfarm payrolls due for release on September 7th. Claims rose 6.3% from the July period. A 7.1% decline in July claims was associated with the below average 92,000 increase in payrolls.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070823b.jpg" width="353">
The four-week moving average of initial claims rose to 317,750 (0.3% y/y), its highest level since early July.
Continuing claims for unemployment insurance rose 16,000 after a downwardly revised 6,000 increase during the prior week. The continuing claims numbers lag the initial claims figures by one week.
The insured rate of unemployment remained at 1.9%.
The Minimum Wage and the Labor Market from the Federal Reserve Bank of Cleveland is available <a href="http://www.clevelandfed.org/research/Commentary/2007/0501.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">08/18/07 </th>
<th scope="col">08/11/07 </th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;322</td>
<td>324</td>
<td>1.6%</td>
<td>313</td>
<td>331</td>
<td>343</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,572</td>
<td>3.9%</td>
<td>2,545</td>
<td>3.3%</td>
<td>2,459</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance fell slightly last week, back to the level initially reported for the prior period. Claims for the week ending 8/18 fell to 322,000 from 324,000 during the week ended 8/11. Consensus [...]

U.S. Initial Unemployment Insurance Claims Fell Slightly

Carol Stone, CBE

Financial markets have been in a "liquidity crisis". Weekly Federal Reserve data reported just this afternoon and also earlier today give several measures of this for the US and highlight what the Federal Reserve and bankers are [...]

Borrowings at the Federal Reserve Largest in 6 Years; Big Drops in Commercial Paper Outstanding

<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/070822b.jpg" width="353">
Japan&#39;s trade surplus either widened a bit in July or narrowed noticeably, depending on how you look at it. The reported balance from the raw data diminished to &yen;671 million from &yen;851 million in July 2006. However, the seasonally adjusted balance inched outward to &yen;823 million from &yen;822 million. This compares with a seasonally adjusted balance of &yen;766 million a year ago. Both exports and imports rose 0.5% in July from June. Exports were up 11.7% from the year-ago amount and imports, a substantial 16.9%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070822c.jpg" width="353">
Some observers highlighted the deterioration, noting that it was more than forecasters expected and might foretell more slowing of the Japanese economy. There was already some surprise in Q2 GDP, which saw quarter-to-quarter growth decrease to just a 0.5% annual rate from 3.2% in Q1. However, from this perspective of the ongoing trend in seasonally adjusted data, the recent string of trade figures looks fairly favorable (see first graph).<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070822d.jpg" width="353">
The feature of this report that caught our attention came when we started to look at petroleum imports. With prices up so sharply, these imports were up 14% from a year ago. But wait! total imports were up 16.9%. Other things must have increased considerably more than oil. Indeed. Iron ore 35%; iron and steel products, 55.7%; nonferrous ore, 59.6%; nonferrous alloys, 27.8%, chemicals, 23.8%; electrical machinery, 17.1%. Commodity prices have struck here, apparently, sticking resource-starved Japan with accelerating import costs; in some cases, such as copper, world markets have already eased, but Japan is still paying higher more, possibly for materials that were ordered some time ago. We show here another example, imports of iron and steel products with the Nikkei domestic commodity price index for steel products.
Will these facts help the Bank of Japan in its rate setting decision, due overnight tonight? They would present a two-handed argument for a rate change: high-cost imports weighing on the economy, but the accompanying prospect of a more notable resumption of inflation. We&#39;d guess -- without any credential as a forecaster of Japanese monetary policy -- that developments in world markets, more than these dual pressures within the Japanese economy itself, would stop the BoJ from raising a rate this week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">JAPAN, Bil.&yen;</th>
<th scope="col">July 2007*</th>
<th scope="col">June 2007*</th>
<th scope="col">May 2007*</th>
<th scope="col">Year Ago*</th>
Monthly Averages
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2006</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">Trade Balance</td>
<td>823</td>
<td>822</td>
<td>796</td>
<td>766</td>
<td>658</td>
<td>726</td>
<td>996</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Not Seas Adj</td>
<td>671</td>
<td>1223</td>
<td>383</td>
<td>851</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>7086</td>
<td>7053</td>
<td>6973</td>
<td>6333</td>
<td>6271</td>
<td>5471</td>
<td>5097</td>
</tr>
<tr>
<td class="firstcol">&nbsp; % Change</td>
<td>0.5</td>
<td>1.1</td>
<td>2.9</td>
<td>11.7</td>
<td>14.6</td>
<td>7.3</td>
<td>12.1</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>6264</td>
<td>6231</td>
<td>6177</td>
<td>5567</td>
<td>5612</td>
<td>4746</td>
<td>4101</td>
</tr>
<tr>
<td class="firstcol">&nbsp; % Change</td>
<td>0.5</td>
<td>0.9</td>
<td>8.2</td>
<td>16.9</td>
<td>18.3</td>
<td>15.7</td>
<td>10.9</td>
</tr>
</tbody>
</table>
</body>
</html>

Japan's trade surplus either widened a bit in July or narrowed noticeably, depending on how you look at it. The reported balance from the raw data diminished to ¥671 million from ¥851 million in July 2006. However, the seasonally [...]

Japanese Trade Picture Murky: Rising World Commodity Prices Push Imports Higher

<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/070822a.jpg" width="353">
Euro area domestic orders are fine but are slower than export orders - both are accelerating over 3 months. 
The UK alone (not a Euro area member) shows orders weakening but the CBI survey shows gains in August. We are left with a bit of uncertainty about Europe. But nothing has truly been weak apart from the episodic experience of things like UK orders weakening then rebounding. There are more substantial hints of slowing, but none of weakness. And during the liquidity squeeze the Euro has lost some ground, a factor that is good for Euro area growth prospects. 
While there is some irregularity in the Euro area, Italy and France have showed the most consistent signs of weakness among large economies, although French industrial orders have emerged again as strong after some weakness. The ECB is under pressure to not hike rates and today the French finance minister proves there is at least a side and one-half to every argument, by making a case for a rate cut from the ECB. Yes I said (he said) &#145;cut&#146;. 
Within the Euro area there is this odd result that domestic orders are softer while export orders are strong and accelerating strongly. Exports still undertake a national definition in these data. So export orders from Germany to a French firm would be export orders to France but would still reflect internal EMU orders. This sort of thing makes it a bit hard to sort out what is in train here. For now domestic orders are a bit weaker but are not suspect since they are accelerating, too. Europe&#146;s slowdown may be in progress but it does not seem to be anything more serious than that. 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Euro area and UK Industrial Orders &amp; Sales Trends
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">% m/m</td>
<td>Jun-07</td>
<td>Jun-07</td>
<td>Jun-07</td>
<td>Jun-06</td>
<td>Jun-05</td>
</tr>
<tr class="grey3">
<td class="firstcol">Euro area Detail</td>
<td>Jun-07</td>
<td>May-07</td>
<td>Apr-07</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG Orders</td>
<td>4.4%</td>
<td>1.5%</td>
<td>-0.3%</td>
<td>24.5%</td>
<td>17.5%</td>
<td>15.5%</td>
<td>6.3%</td>
<td>5.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG Sales</td>
<td>0.9%</td>
<td>0.7%</td>
<td>0.3%</td>
<td>8.2%</td>
<td>7.2%</td>
<td>7.1%</td>
<td>7.7%</td>
<td>3.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Consumer</td>
<td>0.5%</td>
<td>0.4%</td>
<td>0.3%</td>
<td>4.9%</td>
<td>4.1%</td>
<td>4.8%</td>
<td>7.7%</td>
<td>3.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Capital</td>
<td>0.5%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>5.7%</td>
<td>7.3%</td>
<td>8.2%</td>
<td>4.0%</td>
<td>1.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Intermediate</td>
<td>0.9%</td>
<td>0.7%</td>
<td>0.2%</td>
<td>10.7%</td>
<td>4.0%</td>
<td>10.6%</td>
<td>6.9%</td>
<td>2.7%</td>
</tr>
<tr class="grey1">
<td class="firstcol">MFG Orders</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Total Orders</td>
<td>4.4%</td>
<td>1.5%</td>
<td>-0.3%</td>
<td>24.5%</td>
<td>17.5%</td>
<td>15.5%</td>
<td>6.3%</td>
<td>5.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">E-13 Domestic MFG orders</td>
<td>1.8%</td>
<td>0.5%</td>
<td>0.2%</td>
<td>10.7%</td>
<td>4.0%</td>
<td>10.6%</td>
<td>4.2%</td>
<td>0.9%</td>
</tr>
<tr class="grey3">
<td class="firstcol">E-13 Foreign MFG orders</td>
<td>8.7%</td>
<td>3.7%</td>
<td>-2.0%</td>
<td>48.4%</td>
<td>30.7%</td>
<td>23.1%</td>
<td>8.5%</td>
<td>9.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Countries:</td>
<td>Jun-07</td>
<td>May-07</td>
<td>Apr-07</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany:</td>
<td>4.7%</td>
<td>3.2%</td>
<td>-1.5%</td>
<td>28.3%</td>
<td>27.2%</td>
<td>17.9%</td>
<td>9.7%</td>
<td>7.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France:</td>
<td>5.1%</td>
<td>2.6%</td>
<td>0.6%</td>
<td>38.6%</td>
<td>26.6%</td>
<td>8.4%</td>
<td>-0.6%</td>
<td>9.6%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Italy:</td>
<td>#N/A</td>
<td>2.5%</td>
<td>-0.8%</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>10.1%</td>
<td>4.9%</td>
</tr>
<tr class="grey3">
<td class="firstcol">UK:</td>
<td>-1.7%</td>
<td>-2.4%</td>
<td>-6.7%</td>
<td>-35.9%</td>
<td>12.2%</td>
<td>-7.2%</td>
<td>10.2%</td>
<td>-2.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

Euro area domestic orders are fine but are slower than export orders - both are accelerating over 3 months. The UK alone (not a Euro area member) shows orders weakening but the CBI survey shows gains in August. We are left with a bit [...]

Euro Orders are Quite Firm Within the Zone but Extremely Strong for "Exports"

<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/070822b.jpg" width="353">
Japan&#39;s trade surplus either widened a bit in July or narrowed noticeably, depending on how you look at it. The reported balance from the raw data diminished to &yen;671 million from &yen;851 million in July 2006. However, the seasonally adjusted balance inched outward to &yen;823 million from &yen;822 million. This compares with a seasonally adjusted balance of &yen;766 million a year ago. Both exports and imports rose 0.5% in July from June. Exports were up 11.7% from the year-ago amount and imports, a substantial 16.9%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070822c.jpg" width="353">
Some observers highlighted the deterioration, noting that it was more than forecasters expected and might foretell more slowing of the Japanese economy. There was already some surprise in Q2 GDP, which saw quarter-to-quarter growth decrease to just a 0.5% annual rate from 3.2% in Q1. However, from this perspective of the ongoing trend in seasonally adjusted data, the recent string of trade figures looks fairly favorable (see first graph).<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070822d.jpg" width="353">
The feature of this report that caught our attention came when we started to look at petroleum imports. With prices up so sharply, these imports were up 14% from a year ago. But wait! total imports were up 16.9%. Other things must have increased considerably more than oil. Indeed. Iron ore 35%; iron and steel products, 55.7%; nonferrous ore, 59.6%; nonferrous alloys, 27.8%, chemicals, 23.8%; electrical machinery, 17.1%. Commodity prices have struck here, apparently, sticking resource-starved Japan with accelerating import costs; in some cases, such as copper, world markets have already eased, but Japan is still paying higher more, possibly for materials that were ordered some time ago. We show here another example, imports of iron and steel products with the Nikkei domestic commodity price index for steel products.
Will these facts help the Bank of Japan in its rate setting decision, due overnight tonight? They would present a two-handed argument for a rate change: high-cost imports weighing on the economy, but the accompanying prospect of a more notable resumption of inflation. We&#39;d guess -- without any credential as a forecaster of Japanese monetary policy -- that developments in world markets, more than these dual pressures within the Japanese economy itself, would stop the BoJ from raising a rate this week.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">JAPAN, Bil.&yen;</th>
<th scope="col">July 2007*</th>
<th scope="col">June 2007*</th>
<th scope="col">May 2007*</th>
<th scope="col">Year Ago*</th>
Monthly Averages
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2006</td>
<td>2005</td>
<td>2004</td>
</tr>
<tr>
<td class="firstcol">Trade Balance</td>
<td>823</td>
<td>822</td>
<td>796</td>
<td>766</td>
<td>658</td>
<td>726</td>
<td>996</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Not Seas Adj</td>
<td>671</td>
<td>1223</td>
<td>383</td>
<td>851</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>7086</td>
<td>7053</td>
<td>6973</td>
<td>6333</td>
<td>6271</td>
<td>5471</td>
<td>5097</td>
</tr>
<tr>
<td class="firstcol">&nbsp; % Change</td>
<td>0.5</td>
<td>1.1</td>
<td>2.9</td>
<td>11.7</td>
<td>14.6</td>
<td>7.3</td>
<td>12.1</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>6264</td>
<td>6231</td>
<td>6177</td>
<td>5567</td>
<td>5612</td>
<td>4746</td>
<td>4101</td>
</tr>
<tr>
<td class="firstcol">&nbsp; % Change</td>
<td>0.5</td>
<td>0.9</td>
<td>8.2</td>
<td>16.9</td>
<td>18.3</td>
<td>15.7</td>
<td>10.9</td>
</tr>
</tbody>
</table>
Euro Orders are Quite Firm Within the Zone but Extremely Strong for "Exports" 
by <a href="/comment/Brusca.html">Robert Brusca</a> August 22, 2007


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/070822a.jpg" width="353">
Euro area domestic orders are fine but are slower than export orders - both are accelerating over 3 months. 
The UK alone (not a Euro area member) shows orders weakening but the CBI survey shows gains in August. We are left with a bit of uncertainty about Europe. But nothing has truly been weak apart from the episodic experience of things like UK orders weakening then rebounding. There are more substantial hints of slowing, but none of weakness. And during the liquidity squeeze the Euro has lost some ground, a factor that is good for Euro area growth prospects. 
While there is some irregularity in the Euro area, Italy and France have showed the most consistent signs of weakness among large economies, although French industrial orders have emerged again as strong after some weakness. The ECB is under pressure to not hike rates and today the French finance minister proves there is at least a side and one-half to every argument, by making a case for a rate cut from the ECB. Yes I said (he said) &#145;cut&#146;. 
Within the Euro area there is this odd result that domestic orders are softer while export orders are strong and accelerating strongly. Exports still undertake a national definition in these data. So export orders from Germany to a French firm would be export orders to France but would still reflect internal EMU orders. This sort of thing makes it a bit hard to sort out what is in train here. For now domestic orders are a bit weaker but are not suspect since they are accelerating, too. Europe&#146;s slowdown may be in progress but it does not seem to be anything more serious than that. 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead>
<tr>
Euro area and UK Industrial Orders &amp; Sales Trends
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">% m/m</td>
<td>Jun-07</td>
<td>Jun-07</td>
<td>Jun-07</td>
<td>Jun-06</td>
<td>Jun-05</td>
</tr>
<tr class="grey3">
<td class="firstcol">Euro area Detail</td>
<td>Jun-07</td>
<td>May-07</td>
<td>Apr-07</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG Orders</td>
<td>4.4%</td>
<td>1.5%</td>
<td>-0.3%</td>
<td>24.5%</td>
<td>17.5%</td>
<td>15.5%</td>
<td>6.3%</td>
<td>5.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG Sales</td>
<td>0.9%</td>
<td>0.7%</td>
<td>0.3%</td>
<td>8.2%</td>
<td>7.2%</td>
<td>7.1%</td>
<td>7.7%</td>
<td>3.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Consumer</td>
<td>0.5%</td>
<td>0.4%</td>
<td>0.3%</td>
<td>4.9%</td>
<td>4.1%</td>
<td>4.8%</td>
<td>7.7%</td>
<td>3.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Capital</td>
<td>0.5%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>5.7%</td>
<td>7.3%</td>
<td>8.2%</td>
<td>4.0%</td>
<td>1.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Intermediate</td>
<td>0.9%</td>
<td>0.7%</td>
<td>0.2%</td>
<td>10.7%</td>
<td>4.0%</td>
<td>10.6%</td>
<td>6.9%</td>
<td>2.7%</td>
</tr>
<tr class="grey1">
<td class="firstcol">MFG Orders</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Total Orders</td>
<td>4.4%</td>
<td>1.5%</td>
<td>-0.3%</td>
<td>24.5%</td>
<td>17.5%</td>
<td>15.5%</td>
<td>6.3%</td>
<td>5.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">E-13 Domestic MFG orders</td>
<td>1.8%</td>
<td>0.5%</td>
<td>0.2%</td>
<td>10.7%</td>
<td>4.0%</td>
<td>10.6%</td>
<td>4.2%</td>
<td>0.9%</td>
</tr>
<tr class="grey3">
<td class="firstcol">E-13 Foreign MFG orders</td>
<td>8.7%</td>
<td>3.7%</td>
<td>-2.0%</td>
<td>48.4%</td>
<td>30.7%</td>
<td>23.1%</td>
<td>8.5%</td>
<td>9.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Countries:</td>
<td>Jun-07</td>
<td>May-07</td>
<td>Apr-07</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo</td>
<td>12-mo</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany:</td>
<td>4.7%</td>
<td>3.2%</td>
<td>-1.5%</td>
<td>28.3%</td>
<td>27.2%</td>
<td>17.9%</td>
<td>9.7%</td>
<td>7.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France:</td>
<td>5.1%</td>
<td>2.6%</td>
<td>0.6%</td>
<td>38.6%</td>
<td>26.6%</td>
<td>8.4%</td>
<td>-0.6%</td>
<td>9.6%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Italy:</td>
<td>#N/A</td>
<td>2.5%</td>
<td>-0.8%</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>10.1%</td>
<td>4.9%</td>
</tr>
<tr class="grey3">
<td class="firstcol">UK:</td>
<td>-1.7%</td>
<td>-2.4%</td>
<td>-6.7%</td>
<td>-35.9%</td>
<td>12.2%</td>
<td>-7.2%</td>
<td>10.2%</td>
<td>-2.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

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. 

London

Singapore

Tokyo

New York

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

251107F5.jpg

251107G5.jpg

Consumer credit outstanding increased $13.1 billion (2.3% y/y) in September after rising $3.1 billion in August, revised from $0.4 billion, and $17.7 billion in July, revised from $18.1 billion. A $10.0 billion rise had been expected in the Action Economics Forecast Survey.

Nonrevolving credit outstanding rose $11.4 billion (2.1% y/y) in September after increasing $9.2 billion in August, revised from $6.3 billion, and increasing $6.7 billion in July, revised from $6.9 billion. Nonrevolving credit held by depository institutions declined 6.8% y/y in September after falling 7.4% y/y in August. Finance company debt holdings fell 1.5% y/y after declining 1.3%, while credit union holdings rose an increased 12.8% y/y in September, the quickest growth since in two years. Nonrevolving debt of the federal government rose 3.6% y/y in September, the same as in August.

In September, revolving credit outstanding, which includes credit cards, rose $1.7 billion (2.6% y/y) after falling $6.1 billion in August, revised from a $6.0 billion decline, and rising $11.0 billion in July, revised from $11.2 billion. Revolving credit outstanding held by depository institutions fell 3.0% y/y. Revolving credit held by finance companies fell a steady 14.7% y/y in September, while credit union debt rose 4.5% y/y in September, up from 3.7% y/y in August.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

**AI and the Economy** is the title of today’s speech by Federal Reserve Vice Chair Philip N. Jefferson and it can be found [here](https://www.federalreserve.gov/newsevents/speech/jefferson20251107a.htm).

251107H5.jpg

251107I5.jpg

- Notable gain in credit usage follows prior month’s slowdown.
- Nonrevolving credit usage strengthens and revolving turns positive.

U.S. Consumer Credit Strengthens in September

251107A2.jpg

251107D2.jpg

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.1% during the four weeks ended November 7, 2025 after improving 0.3% in the prior four-week period. The index increased 0.5% y/y following a 0.8% y/y gain at the end of October.

Prices in the **Textile** group increased 2.5% during the last four weeks and rose 3.3% y/y. The cost of burlap increased 23.8% in the last four weeks while surging 48.1% over the last year. Showing modest improvement, cotton prices rose 0.9% in four weeks but declined 5.6% y/y.

**Metals** group prices increased 1.5% (5.9% y/y) in the last four weeks as the cost of aluminum rose 4.9	% (10.3% y/y). Zinc prices moved up 3.6% (5.4% y/y) and the cost of steel scrap rose 1.4% (-5.9% y/y). Lead prices increased 1.1% (-0.2% y/y) in four weeks and the cost of copper scrap rose 0.6% (13.9% y/y). Working lower, tin prices declined 2.2% (+13.8% y/y) in four weeks.

**Miscellaneous** group prices weakened 2.9% in the last four weeks and were off 1.0% y/y, as framing lumber prices fell 11.3% (-4.3% y/y). The cost of tallow, used for frying & baking, declined 9.0% (+10.5% y/y) in four weeks. Offsetting this weakness, natural rubber prices rose 2.0% in four weeks, but were off 6.6% y/y.

Prices in the **crude oil & benzene** group declined 1.6% (-10.8% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 2.2% in four weeks to $60.31 per barrel and declined 15.6% y/y. The price was increased from a low of $58.47 in the third week of last month. The price of the petro-chemical benzene fell 3.8% (-23.2% y/y) in four weeks.

**Excluding crude oil**, the industrial commodity price index was unchanged (+1.5% y/y) over the last four weeks after rising 0.5% during the prior four weeks.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

251107C2.jpg

251107B2.jpg

- Textile and metals prices strengthen.
- Framing lumber costs plummet.
- Crude oil prices weaken.

FIBER: Industrial Commodity Price Index Moves Sideways in Latest Four Weeks

251107E.jpg

The chart provides a good overview for German trade trend. The table breaks trade trends down by categories and provides growth rates on shorter horizons of 3 months, 6 months and 12 months. But the chart depicts the overarching trends well. It shows the German surplus being diminished on a gradual path and not altogether in a clear monotonic fashion. Export and import lines on the chart move mostly sideways (horizontal). The export line is below the import line since late last year. These two series plots on the right-hand scale and they depict growth rates (year-over-year). So sideways movements mean roughly steady growth. Exports have been growth steadily year-over-year at a weak pace that on occasion has been a decline in terms of their year-on-year value. Generally, the green line is in positive territory. The red import line has been stronger, indicating somewhat better, steadier import growth over the period.

While exports had a good September, export growth sequenced from 12-months to 6-months, to 3-months has been weakening. Imports also put in a strong September but are showing some erosion from 12-month to 6-months to 3-months in terms of annualized rates of growth. Still, import growth rates remain quite strong and consistent; the sense of erosion is clear but also moderate – it’s a moderate erosion in progress for imports.

Capital goods exports from Germany are improving- this observation is based on lagged data with a one-month lag built in. But consumer goods and vehicle exports are slowing and rather sharply- likely as a result of U.S. tariffs.

Import side trends, with the same lag, are not as clear cut. Capital goods imports are growing, and motor vehicle imports are improving and accelerating. Consumer goods imports have erratically slowed.

Real exports and imports on sequential lagged data show exports contracting on most horizons while imports generate consistent positive growth in real terms. There is a big difference in these two trends expressed in real terms.

On balance, German trade trends are shifting. The trade balance is gradually eroding. Change is in play.

251107.jpg

Germany

German Trade Surplus Shrinks Despite Strong Exports

Andrew Cates

**The global growth cycle**
The new orders-to-inventory spread in the global manufacturing PMI is often been viewed as one of the most reliable forward-looking indicators of the global economic cycle. When new orders are rising relative to inventories, it typically signals that demand is firming, production pipelines are beginning to refill, and industrial momentum is building. Conversely, when inventories accumulate faster than orders, it often foreshadows a slowdown. As the chart shows, this spread has been holding up relatively well in recent months, suggesting that despite ongoing headwinds—US tariff policies, uneven global demand, and geopolitical uncertainty—the underlying pulse of global manufacturing remains resilient.

251106Z1.jpg

**US credit standards**
The latest Senior Loan Officer Opinion Survey (SLOOS) from the Federal Reserve suggests that credit conditions remain tight but are no longer worsening, marking a tentative stabilization after several quarters of tightening. Banks reported modest easing in standards for some categories of corporate and commercial real estate loans, though mortgage lending remains constrained. Demand for business credit continues to soften, reflecting both higher borrowing costs and a cautious corporate outlook. Historically, periods of widespread tightening—like those seen in 2008 and 2020—have coincided with sharp rises in the private sector savings balance (a proxy for deleveraging), as firms and households retrench simultaneously. The current configuration, shown in the chart, indicates lingering deleveraging pressures, but not a collapse in credit availability.

251106Z2.jpg

**China**
Moving to China, the latest official and Caixin PMI releases for October painted a mixed picture of activity. Both manufacturing indices softened, suggesting that the industrial rebound which underpinned much of China’s recent growth may be losing some traction. The official non-manufacturing PMI, by contrast, edged higher, hinting at continued resilience in construction and public-sector-linked services, while the Caixin services measure—which tends to reflect smaller, private-sector firms—slipped modestly. The divergence underscores China’s two-speed recovery: industrial production and exports have carried the economy, while household spending and smaller enterprises remain subdued. If manufacturing momentum fades in the coming months, the economy could face a renewed loss of balance, with fewer reliable growth engines. Still, overall performance this year has surpassed expectations, and the government’s 5% growth target remains within reach, provided activity holds steady through year-end. Looking ahead, marginal policy support and improved external sentiment—helped by selective tariff relief from the US—could offer limited, though welcome, cushioning.

251106Z3.jpg

**Australia** 
In Australia, the RBA left the cash rate unchanged at its November meeting, maintaining a cautious stance amid a still-complex inflation and growth backdrop. The case for further easing has become less compelling as core inflation (trimmed mean CPI) remains above target and labour market conditions—while gradually softening—continue to show resilience. The unemployment rate has edged higher but remains low by historical standards, consistent with lingering wage and services price pressures. Recent data also hint at a tentative pickup in activity, supported by strong population growth and stabilising commodity exports. Against that backdrop, the RBA has stressed that the path for policy remains finely balanced, with a strong focus on incoming inflation data and global financial conditions. While downside risks persist—particularly from China’s slowdown and weak global trade—the persistence of domestic price pressures means the bar for renewed rate cuts remains relatively high.

251106Z4.jpg

**Argentina**
Turning to Argentina, markets continue to digest the implications of President Milei’s midterm election victory amid deepening economic and financial imbalances. The peso’s broad nominal effective exchange rate has remained under heavy pressure, extending its long-running slide as investors weigh the challenges of implementing fiscal consolidation and monetary reform in a fragile political and social environment. In stark contrast, the Buenos Aires stock index has surged to record highs, reflecting optimism that Milei’s reformist agenda—anchored in deregulation, privatisation, and fiscal restraint—may eventually stabilise the economy and attract renewed capital inflows. The divergence between a falling currency and soaring equity prices highlights the tension between near-term macro risks and longer-term reform hopes. Going forward, investor confidence will hinge on the government’s ability to deliver credible policy execution while managing the inflationary fallout from ongoing peso weakness.

251106Z5.jpg

**Global CO2 emissions**
Shifting focus to more structural issues, the chart underscores how decarbonisation challenges remain deeply concentrated in a few heavy-emitting sectors. Energy production alone accounts for nearly 40% of global CO₂ emissions, with manufacturing, households, and transport together contributing another 50%. This composition highlights the complex trade-offs of the energy transition: the very sectors that underpin modern living standards—power generation, industrial output, mobility, and housing—are also those most difficult to decarbonise. Climate change is therefore not just an environmental issue but a structural economic one, shaping investment, infrastructure, and pricing systems for decades to come. The tension between sustaining growth and cutting emissions will remain a defining challenge for policymakers, particularly as clean technologies face constraints in scaling fast enough to offset rising global demand for energy-intensive goods and services.

251106Z6.jpg

Recent financial market developments have been shaped by a renewed bout of volatility, with heightened concerns about stretched AI valuations triggering a big correction across parts of the tech sector. This comes against a backdrop of lingering uncertainty in Washington, where the US government shutdown has continued to delay the release of several key economic reports, clouding visibility on near-term momentum. Still, the broader macro signals offer a mixed but nuanced picture. Global manufacturing PMIs have continued to hold up, hinting that underlying industrial momentum remains resilient (chart 1). The latest US Senior Loan Officer Survey points to a stabilisation in credit conditions—banks remain cautious, but the most intense phase of tightening may have now passed (chart 2). In China, the October PMIs reflected renewed softness in manufacturing alongside a still-steady services sector, tentatively suggesting that growth may be rebalancing, albeit at a weaker aggregate pace of growth (chart 3). Australia’s inflation and labour market data, meanwhile, have complicated the case for near-term policy easing, with the RBA opting to stay on hold this week as core inflation remain sticky. In Argentina, currency weakness persists even as equity markets rally, highlighting the policy and market tension surrounding President Milei’s reform agenda (chart 5). And finally, at a more structural level, latest global emissions data serve as a reminder that energy, manufacturing, transport, and households remain the principal sources of CO₂—illustrating how the climate and energy transition will continue to shape the macro landscape well beyond the current economic cycle (chart 6).

Charts of the Week: Uneven But Unbroken

251106A8.jpg

251106B8.jpg

Initial claims for unemployment insurance fell 12,643 during the week ended October 25 to 219,520 (+0.6% y/y) and mostly reversed the prior week’s increase to 232,163. The four-week moving average of initial claims eased to 226,766 from 227,953. They have trended higher this year, after weakening late in 2024. The four-week average hit a low of 200,323 in January 2024.

Federal government employees initially filed 9,435 jobless insurance claims last week after 10,062 in the prior week. These figures are increased from 588 at the end of September.

Continuing claims for unemployment insurance rose to 1.957 million (5.5% y/y) in the week ended October 18 from 1.947 million in the prior week. The four-week moving average rose to 1.940 million from 1.931 million. It was the highest level since the last week of August.	

Federal government employees continuing benefits rose to 23,188 in the week ended October 18 from 14,472 in the prior week. These figures are increased from 8,680 at the end of September.

The insured unemployment rate varied greatly across individual states and territories. In the week ended October 18, the highest unemployment rates were in New Jersey (2.14%), Washington (2.03%), California (1.93%), Massachusetts (1.84%), the District of Columbia (1.86%) and Connecticut (1.70%). The lowest were in South Dakota (0.25%), Florida (0.36%), North Carolina & Louisiana (0.41%), Nebraska (0.44%) and Virginia (0.49%). Rates in other notable states include New York (1.51%), Illinois (1.50%), Pennsylvania (1.39%), and Texas (1.11%). 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 **USECON**. Data for individual states are in **REGIONW** back to December 1986.

251106C8.jpg

251106D8.jpg

- Decline in initial claims reverses earlier gain.
- Continuing claims move higher.
- State unemployment rates vary.

Economy in Brief: 2007

Jump to:

U.S. Loan Delinquencies Up Slightly, But Still Low

German GDP Rebound Still Not Supported by the Consumer

Belgian National Bank Index Declines in August

U.S. Initial Unemployment Insurance Claims Fell Slightly

Borrowings at the Federal Reserve Largest in 6 Years; Big Drops in Commercial Paper Outstanding

Japanese Trade Picture Murky: Rising World Commodity Prices Push Imports Higher

Euro Orders are Quite Firm Within the Zone but Extremely Strong for "Exports"

Japanese Trade Picture Murky: Rising World Commodity Prices Push Imports Higher