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/051117e.jpg" width="353">
Industrial output last month rebounded 0.9% following the effects of Hurricane&#39;s Katrina &amp; Rita which lowered September output by a revised 1.5%. The increase about matched Consensus expectations for a 1.0% gain.
Another sharp decline of 1.9% in utility output (+1.3% y/y) which followed two consecutive months of 0.9% drop held back the gain in total output. Mining output (-0.6%) also fell for the fourth consecutive month (-8.1% y/y). These declines were offset by a 1.5% spurt in factory sector production (3.3% y/y) which more than recovered the prior month&#39;s 0.7% shortfall.
A huge 6.5% (8.5% y/y) gain in output of business equipment led the strength in factory output last month. The strength was paced by a 36.8% rise in transit equipment which was recovering from a 25.5% plunge in September. Output of computers, peripheral equipment &amp; semiconductors also were strong and rose 1.7% (24.8% y/y) led by a 2.8% jump in communications equipment (23.2% y/y). Excluding the high tech sector altogether, factory output gained 1.3% (1.8% y/y).
Output of appliances, furniture &amp; carpeting fell 0.6% (+3.5% y/y) but output of nonenergy, nondurables rose 0.2% (1.6% y/y) led by a 0.6% (0.8% y/y) increase in chemical production. Clothing output fell 2.5% (-2.2% y/y).
Total capacity utilization rose to 79.5% and capacity grew 1.6% y/y. Factory sector utilization rose to 79.0% while capacity rose 2.0% y/y. Figures for both output and capacity were upwardly revised

<table border="0" cellspacing="0" width="100%">

</table>
<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/USECON/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial Production</td>
<td>0.9%</td>
<td>-1.5%</td>
<td>2.0%</td>
<td>4.1%</td>
<td>0.6%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Goods</td>
<td>-0.4%</td>
<td>0.5%</td>
<td>2.0%</td>
<td>2.1%</td>
<td>1.0%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Business Equipment</td>
<td>6.5%</td>
<td>-4.6%</td>
<td>8.5%</td>
<td>9.3%</td>
<td>0.0%</td>
<td>-7.8%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>79.5%</td>
<td>78.9%</td>
<td>79.2% (10/04)</td>
<td>78.6%</td>
<td>75.7%</td>
<td>75.2%</td>
</tr>
</tbody>
</table>
</body>
</html>

Industrial output last month rebounded 0.9% following the effects of Hurricane's Katrina & Rita which lowered September output by a revised 1.5%. The increase about matched Consensus expectations for a 1.0% gain. Another sharp decline [...]

Industrial Output Rebounded in October

<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/051117e.jpg" width="353">
Industrial output last month rebounded 0.9% following the effects of Hurricane&#39;s Katrina &amp; Rita which lowered September output by a revised 1.5%. The increase about matched Consensus expectations for a 1.0% gain.
Another sharp decline of 1.9% in utility output (+1.3% y/y) which followed two consecutive months of 0.9% drop held back the gain in total output. Mining output (-0.6%) also fell for the fourth consecutive month (-8.1% y/y). These declines were offset by a 1.5% spurt in factory sector production (3.3% y/y) which more than recovered the prior month&#39;s 0.7% shortfall.
A huge 6.5% (8.5% y/y) gain in output of business equipment led the strength in factory output last month. The strength was paced by a 36.8% rise in transit equipment which was recovering from a 25.5% plunge in September. Output of computers, peripheral equipment &amp; semiconductors also were strong and rose 1.7% (24.8% y/y) led by a 2.8% jump in communications equipment (23.2% y/y). Excluding the high tech sector altogether, factory output gained 1.3% (1.8% y/y).
Output of appliances, furniture &amp; carpeting fell 0.6% (+3.5% y/y) but output of nonenergy, nondurables rose 0.2% (1.6% y/y) led by a 0.6% (0.8% y/y) increase in chemical production. Clothing output fell 2.5% (-2.2% y/y).
Total capacity utilization rose to 79.5% and capacity grew 1.6% y/y. Factory sector utilization rose to 79.0% while capacity rose 2.0% y/y. Figures for both output and capacity were upwardly revised

<table border="0" cellspacing="0" width="100%">

</table>
<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/USECON/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial Production</td>
<td>0.9%</td>
<td>-1.5%</td>
<td>2.0%</td>
<td>4.1%</td>
<td>0.6%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Goods</td>
<td>-0.4%</td>
<td>0.5%</td>
<td>2.0%</td>
<td>2.1%</td>
<td>1.0%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Business Equipment</td>
<td>6.5%</td>
<td>-4.6%</td>
<td>8.5%</td>
<td>9.3%</td>
<td>0.0%</td>
<td>-7.8%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>79.5%</td>
<td>78.9%</td>
<td>79.2% (10/04)</td>
<td>78.6%</td>
<td>75.7%</td>
<td>75.2%</td>
</tr>
</tbody>
</table>
Housing Starts Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 17, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051117a.jpg" width="353">
Housing starts in October fell 5.6% m/m to 2.014M units following an upwardly revised gain in September.The drop was to the lowest level since March and compared to Consensus expectations for a lesser decline to 2.06M starts.
The 3.7% decline in single-family starts reversed all of an upwardly revised 3.0% increase in September. Single family starts fell hard throughout the country. A 6.7% decline (-7.1% y/y) in the West was accompanied by a 7.2% drop (-6.6% y/y) in the Midwest. In the Northeast, single family starts were notably weak and fell 8.5% (+3.2% y/y) to the lowest level since April. Only an unchanged reading (11.6% y/y) in the South tempered the declines..
Multi family starts cratered 14.8% m/m after a downwardly revised 0.6% increase in September.
Building permits fell a hard 6.7% m/m to the lowest level since April as single family permits fell 4.9% (+4.9% y/y).
China: An Evolving Housing Market from the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/banking/asiafocus/2005/AsiaFocus-Jun05.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<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/USECON/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</a> </th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>2,014</td>
<td>2,134</td>
<td>-2.3%</td>
<td>1,950</td>
<td>1,854</td>
<td>1,7 10</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-family</td>
<td>1,704</td>
<td>1,770</td>
<td>2.3%</td>
<td>1,604</td>
<td>1,505</td>
<td>1,363</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-family</td>
<td>310</td>
<td>364</td>
<td>-21.7%</td>
<td>345</td>
<td>349</td>
<td>347</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>2,071</td>
<td>2,219</td>
<td>-1.1%</td>
<td>2,058</td>
<td>1,8 88</td>
<td>1,749</td>
</tr>
</tbody>
</table>
NAHB Housing Market Index Fell Hard 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 17, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051117b.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) Composite Housing Market Index fell a hard 11.8% in November to 60, the lowest level since May 2003.
During the last twenty years the y/y change in the annual composite index has had an 85% correlation with the change in single family housing starts and there has been a 75% correlation between the current sales index and new single family home sales.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051117d.jpg" width="353">
The m/m drop reflected sharp declines throughout the country.
The index for current sales of single family homes in November fell sharply to the lowest level since May 2003. The index for sales in six months also fell hard the lowest in over two years.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
Visit the <a href="http://www.nahb.org">National Association of Home Builders</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a> </th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Nov &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>60</td>
<td>68</td>
<td>70</td>
<td>68</td>
<td>64</td>
<td>61</td>
</tr>
</tbody>
</table>
Initial Claims for Jobless Insurance Lowest Since April 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 17, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051117c.jpg" width="353">
A 25,000 decline last week in initial claims for unemployment insurance to 303,000 followed a little revised 3,000 increase the prior week and dropped claims to the lowest level since mid-April. Consensus expectations had been for a lesser decline 320,000 claims.
The latest figure covers the survey period for November nonfarm payrolls and claims were down 54,000 (15.1%) from the October period.
The Labor Department indicated that roughly 10,000 new claims last week were related to hurricanes Katrina and Rita, bringing the total since Sept. 3 linked to the Gulf Coast storms to an unadjusted 545,000 claims. Hurricane Wilma, which struck Florida late last month, led to roughly 9,000 claims bringing the total to 16,400 related claims since that storm hit.
The four-week moving average of initial claims fell sharply to 321,500 (-4.2% y/y), the lowest level since early September.
Continuing claims for unemployment insurance rose 3,000 following a downwardly revised 5,000 drop during the prior week.
The insured rate of unemployment remained at 2.2% for the eighth week.
Spendthrift Nation from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-30.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">11/12/05</th>
<th scope="col">11/05/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>303</td>
<td>328</td>
<td>-9.8%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,793</td>
<td>0.3%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
Mexico's GDP Expands 3.3% in Q3: Is This Good or Bad? 
by <a href="/comment/Stone.html">Carol Stone</a> November 17, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051117f.jpg" width="353">
Mexico&#39;s GDP was either strong or weak in Q3, according to who you listen to and which comparisons you make. The data were reported yesterday afternoon by INEGI, Mexico&#39;s statistical agency. The year-on-year gain of 3.3% was less than a government forecast, Reuters explained, but slightly larger than private market forecasts. Seasonally adjusted, the quarter saw a 2.1% increase (quarterly rate) after a basically flat performance in Q1 (+0.2%) and Q2 (-0.3%). It was this pattern that Dow Jones highlighted, with a headline in the Wall Street Journal that read &quot;Mexico Growth Picks Up...&quot;. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051117g.jpg" width="353">
A further divergence of interpretation concerns manufacturing. This important sector has experienced considerable variability in recent years. From Q3 2004, this latest period&#39;s value added rose a mere 0.2%, less than Q2&#39;s 2.6% yearly increase. The retreat was led by metals and metal products. Based on seasonal adjustment of the industry data by Haver Analytics, these, along with &quot;other manufacturing&quot;, showed considerable quarter-to-quarter declines. Some attribute this to weakness in the US motor vehicle industry, although collateral data, such as unit vehicle imports into the US as published by the US Commerce Department, don&#39;t indicate any decline. At the same time, for the entire factory sector, some analysts apparently feared a decrease from a year earlier, so the 0.2% rise, modest as it is, was of some comfort.
Other notable sectors of the Mexican economy contributed to the mixed reading on its health. Agriculture, constituting a relatively small proportion of total GDP, had a substantial increase in Q3, 10.6% year-to-year after outright declines in the first half of 2005. Finance also strengthened, with a 6.2% increase; this industry group has been expanding consistently over the last couple of years. The largest sector of the Mexican economy is domestic trade and tourism, contributing just under 20% of GDP last year. This year, it continues to expand, but more slowly, with a 3.1% yearly increase in Q3, notably less than the 4.9% in 2004. As we face Q4, cross-currents will continue to raise questions for the nation: the storms in October, continuing uncertainty in the big US vehicle market, and volatile energy markets. Stay tuned.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Mexico GDP &amp; Select Industries, &nbsp; % Changes, NSA unless noted</th>
<th scope="col">Q3 2005</th>
<th scope="col">Q2 2005</th>
<th scope="col">Q1 2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real GDP, SA (100%*)</td>
<td>2.1</td>
<td>-0.3</td>
<td>0.2</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Yr/Yr, NSA</td>
<td>3.3</td>
<td>3.1</td>
<td>2.4</td>
<td>4.4</td>
<td>1.4</td>
<td>0.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Agriculture (5.3%*)</td>
<td>10.6</td>
<td>-3.3</td>
<td>-1.5</td>
<td>4.0</td>
<td>3.5</td>
<td>0.1</td>
</tr>
<tr>
<td class="firstcol">Manufacturing (18.2%*)</td>
<td>0.2</td>
<td>2.6</td>
<td>-0.2</td>
<td>3.8</td>
<td>-1.3</td>
<td>-0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Wholesale &amp; Retail Trade/Restaurants &amp; Hotels &nbsp; (19.8%*)</td>
<td>3.1</td>
<td>3.5</td>
<td>3.3</td>
<td>4.9</td>
<td>1.6</td>
<td>0.0</td>
</tr>
<tr>
<td class="firstcol">Finance/Insurance/ Banking &nbsp; (15.9%*)</td>
<td>6.2</td>
<td>5.5</td>
<td>5.1</td>
<td>4.6</td>
<td>3.9</td>
<td>4.2</td>
</tr>
</tbody>
</table>
</body>
</html>

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116e.jpg" width="353">
Foreign investors continued to increase their participation in US securities markets in September, according to the US Treasury&#39;s monthly Treasury International Capital (&quot;TIC&quot;) data reported this morning. For the first time, net purchases of major marketable securities surpassed $100 billion, reaching $101.9 billion. As evident in the table below, just two years ago, monthly average purchases were only about half this amount.
The TIC data, carried in Haver&#39;s USINT database, constitute a sizable body of information about interest in US markets from investors in many countries around the world. Many observers look to these data as a way of gauging the ease with which foreign capital flows &quot;finance&quot; the now enormous US current account deficit. Indeed, as we have pointed out here before, there is a high correlation of these investment flows with the size of that deficit.
However, one aspect that strikes us this month is the variety contained in the transactions. While the volume in US Treasuries look fairly steady in our table, in individual months they have ranged from a net liquidation of $3.2 billion (February 2003) to net purchases in excess of $50 billion (each March and April 2004). Other securities categories show even more variability. Perhaps the only repeated pattern is a consistent liquidation of foreign stocks that trade in US markets.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116f.jpg" width="353">
There is also great variability among the nations represented. A quick glance at a list of the countries and their purchases of various instruments shows much up and down movement in most any combination. Such wide-ranging changes highlight the fact that these transactions are generated by thousands of individual investment decisions. For example, total net purchases of US corporate stocks surged from $3.8 billion in August to $24.6 billion in September. Canadian investors bought about the same amount in each of these months: $6.6 billion in August and $5.4 billion in September. So other investors were obviously net sellers in the former month, but switched to making sizable purchases in the latter. Canadians, in the meantime, had bought $1.7 billion on net of US corporate bonds in August, but reduced their activity in these bonds to nearly zero in September. Thus, multiple investment motivations must be at work among these diverse financial market participants. Further, we&#39;d hazard a guess that any &quot;financing&quot; of the current account is more likely to be reflected in short-term financial instruments, such as flows of bank deposits, commercial paper and trade credit. Some of these data are also contained in the USINT database as &quot;banking liabilities to foreigners&quot; and &quot;nonbanking liabilities to foreigners. Those liabilities, some of which are published only quarterly and available only through Q2, have grown rapidly over the past year, as one might expect, but more examination of these relationships is needed to form firmer conclusions on the origins of these flows.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USINT/@U3/@U3.HTM">Net Foreign Purchases of Securities in US Markets</a> (Billions US$)</th>
<th scope="col">Sept 2005</th>
<th scope="col">Aug 2005 </th>
<th scope="col">July 2005 </th>
<th scope="col">Last 12 Months&#39; Average </th>
Monthly Average
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004 </td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Total </td>
<td>101.9</td>
<td>89.0</td>
<td>87.3</td>
<td>71.5</td>
<td>63.6</td>
<td>55.3</td>
<td>47.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Treasuries </td>
<td>21.8</td>
<td>28.2</td>
<td>28.5</td>
<td>25.7</td>
<td>29.3</td>
<td>22.0</td>
<td>10.0</td>
</tr>
<tr>
<td class="firstcol">Federal Agencies (mostly &quot;GSEs&quot;) </td>
<td>20.6</td>
<td>15.7</td>
<td>37.8</td>
<td>20.8</td>
<td>18.9</td>
<td>13.0</td>
<td>16.3</td>
</tr>
<tr class="odd">
<td class="firstcol">US Corporate Bonds </td>
<td>51.1</td>
<td>40.2</td>
<td>24.7</td>
<td>30.3</td>
<td>25.8</td>
<td>22.1</td>
<td>15.2</td>
</tr>
<tr>
<td class="firstcol">US Corporate Stocks </td>
<td>24.6</td>
<td>3.8</td>
<td>10.0</td>
<td>7.4</td>
<td>2.4</td>
<td>2.9</td>
<td>4.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign Bonds </td>
<td>-9.1</td>
<td>17.1</td>
<td>-5.1</td>
<td>-2.9</td>
<td>-5.7</td>
<td>2.7</td>
<td>2.4</td>
</tr>
<tr>
<td class="firstcol">Foreign Stocks </td>
<td>-7.0</td>
<td>-13.5</td>
<td>-8.7</td>
<td>-9.8</td>
<td>-7.1</td>
<td>-7.4</td>
<td>-0.1</td>
</tr>
</tbody>
</table>
</body>
</html>

Foreign investors continued to increase their participation in US securities markets in September, according to the US Treasury's monthly Treasury International Capital ("TIC") data reported this morning. For the first time, net [...]

Foreign Investors Increase Net Securities Purchases in US Markets Again in September

<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/051116d.jpg" width="353">
The total number of mortgage applications fell 0.6% last week after a 2.3% gain the prior period, according to the Mortgage Bankers Association. The decline left the average level in November 4.4% below October.
Applications to refinance fell sharply for the fourth consecutive week. The 5.4% drop lowered the November average 11.1% versus October&#39;s.
Purchase applications rose 2.6% for the second consecutive weekly gain and the rise lifted applications in November 0.5% above October. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
The effective interest rate on a conventional 30-year mortgage was about stable at 6.59% but that was up versus June low of 5.81%. The effective rate on a 15-year mortgage was 6.18%. The interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
Bubbling (or Just Frothy) House Prices? from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20051101/cover.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">11/11/05</th>
<th scope="col">11/04/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>657.6</td>
<td>661.3</td>
<td>-13.3%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>477.9</td>
<td>465.7</td>
<td>-0.5%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,702.4</td>
<td>1,798.8</td>
<td>-28.3%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

The total number of mortgage applications fell 0.6% last week after a 2.3% gain the prior period, according to the Mortgage Bankers Association. The decline left the average level in November 4.4% below October. Applications to [...]

Mortgage Applications Fell

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116c.jpg" width="353">
Total business inventories in September added 0.5% to the prior month&#39;s 0.4% rise. The gains marked the strongest consecutive monthly increases since February &amp; March yet they failed to reverse the decline in the ratio of inventories-to-sales which fell to a new record low. The I/S ratio fell to 1.25 as business sales increased 0.6% (7.8% y/y).
The 0.9% rise in retail inventories repeated its August increase due to a 2.1% jump in motor vehicle inventories. Excluding autos, inventories rose 0.4% as clothing inventories rose 0.5% (5.7% y/y) and general merchandise increased 0.4% (6.9% y/y). Furniture inventories fell 0.3% (+5.7% y/y) for the third consecutive down month.
Factory sector inventories fell for the second consecutive month.
Wholesale inventories increased 0.6%. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.

<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/USECON/@ED/@ED06/@ED0601/@ED0601.HTM">Business Inventories</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.5%</td>
<td>0.4%</td>
<td>4.3%</td>
<td>7.7%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.9%</td>
<td>0.9%</td>
<td>1.1%</td>
<td>5.7%</td>
<td>3.9%</td>
<td>5.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>0.4%</td>
<td>0.6%</td>
<td>6.0%</td>
<td>5.9%</td>
<td>2.0%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.6%</td>
<td>0.5%</td>
<td>8.0%</td>
<td>10.8%</td>
<td>2.0%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>4.9%</td>
<td>7.7%</td>
<td>-1.1%</td>
<td>-5.4%</td>
</tr>
</tbody>
</table>
</body>
</html>

Total business inventories in September added 0.5% to the prior month's 0.4% rise. The gains marked the strongest consecutive monthly increases since February & March yet they failed to reverse the decline in the ratio of inventories- [...]

U.S. Business Inventories Higher Again

<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/051116b.jpg" width="353">
The 0.2% rise in the consumer price index (CPI-U) last month was stronger than Consensus expectations for no change in prices following the huge 1.2% spurt in September.
Though energy prices declined, the fall was limited to 0.2% due to a 14.0% (45.3% y/y) surge in natural gas prices and a 0.9% (35.9% y/y) gain in fuel oil prices. These gains were offset by gasoline prices which moved lower by 4.5% (+37.0% y/y) and in November have declined roughly another 15% m/m to $2.30 per gallon in the latest week. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116a.jpg" width="353">
Prices less food &amp; energy rose 0.2%, twice the September increase, but the increase matched Consensus expectations. Core goods prices were unchanged as 0.5% increases in prices for medical commodities (2.6% y/y) and new vehicles (0.9% y/y) were offset by m/m declines in prices for appliances (+2.5% y/y), carpets (-3.5% y/y) and other household equipment (-6.5% y/y). Apparel prices also fell for the sixth month this year (-0.4% m/m, -1.1% y/y) and tobacco prices dropped 0.1% (5.6% y/y).
Core services prices rose 0.3% as shelter prices jumped 0.5% (2.3% y/y) and medical care services prices also rose 0.5% (4.6% y/y). Public transportation prices ballooned 1.4% (7.8% y/y) while school tuition costs rose 0.2% (6.2% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases rose 0.3% and less food &amp; energy chain prices rose 0.4%.
Understanding the Inflation Targeting Debate from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/mt/20051201/cover.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/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> </th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.2%</td>
<td>1.2%</td>
<td>4.3%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.0%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.4%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.3%</td>
<td>0.1%</td>
<td>2.7%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-0.2%</td>
<td>12.0%</td>
<td>29.6%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.3%</td>
<td>0.3%</td>
<td>2.2%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<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>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a> </td>
<td>0.3%</td>
<td>0.8%</td>
<td>3.3%</td>
<td>2.3%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.4%</td>
<td>0.2%</td>
<td>1.7%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

The 0.2% rise in the consumer price index (CPI-U) last month was stronger than Consensus expectations for no change in prices following the huge 1.2% spurt in September. Though energy prices declined, the fall was limited to 0.2% due [...]

Home Heating Costs Lifted CPI

<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/051116b.jpg" width="353">
The 0.2% rise in the consumer price index (CPI-U) last month was stronger than Consensus expectations for no change in prices following the huge 1.2% spurt in September.
Though energy prices declined, the fall was limited to 0.2% due to a 14.0% (45.3% y/y) surge in natural gas prices and a 0.9% (35.9% y/y) gain in fuel oil prices. These gains were offset by gasoline prices which moved lower by 4.5% (+37.0% y/y) and in November have declined roughly another 15% m/m to $2.30 per gallon in the latest week. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116a.jpg" width="353">
Prices less food &amp; energy rose 0.2%, twice the September increase, but the increase matched Consensus expectations. Core goods prices were unchanged as 0.5% increases in prices for medical commodities (2.6% y/y) and new vehicles (0.9% y/y) were offset by m/m declines in prices for appliances (+2.5% y/y), carpets (-3.5% y/y) and other household equipment (-6.5% y/y). Apparel prices also fell for the sixth month this year (-0.4% m/m, -1.1% y/y) and tobacco prices dropped 0.1% (5.6% y/y).
Core services prices rose 0.3% as shelter prices jumped 0.5% (2.3% y/y) and medical care services prices also rose 0.5% (4.6% y/y). Public transportation prices ballooned 1.4% (7.8% y/y) while school tuition costs rose 0.2% (6.2% y/y).
The chained CPI which adjusts for shifts in the mix of consumer purchases rose 0.3% and less food &amp; energy chain prices rose 0.4%.
Understanding the Inflation Targeting Debate from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/mt/20051201/cover.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/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> </th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.2%</td>
<td>1.2%</td>
<td>4.3%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.1%</td>
<td>2.0%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.4%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.3%</td>
<td>0.1%</td>
<td>2.7%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-0.2%</td>
<td>12.0%</td>
<td>29.6%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.3%</td>
<td>0.3%</td>
<td>2.2%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<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>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a> </td>
<td>0.3%</td>
<td>0.8%</td>
<td>3.3%</td>
<td>2.3%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.4%</td>
<td>0.2%</td>
<td>1.7%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
U.S. Business Inventories Higher Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116c.jpg" width="353">
Total business inventories in September added 0.5% to the prior month&#39;s 0.4% rise. The gains marked the strongest consecutive monthly increases since February &amp; March yet they failed to reverse the decline in the ratio of inventories-to-sales which fell to a new record low. The I/S ratio fell to 1.25 as business sales increased 0.6% (7.8% y/y).
The 0.9% rise in retail inventories repeated its August increase due to a 2.1% jump in motor vehicle inventories. Excluding autos, inventories rose 0.4% as clothing inventories rose 0.5% (5.7% y/y) and general merchandise increased 0.4% (6.9% y/y). Furniture inventories fell 0.3% (+5.7% y/y) for the third consecutive down month.
Factory sector inventories fell for the second consecutive month.
Wholesale inventories increased 0.6%. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.

<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/USECON/@ED/@ED06/@ED0601/@ED0601.HTM">Business Inventories</a></th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.5%</td>
<td>0.4%</td>
<td>4.3%</td>
<td>7.7%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.9%</td>
<td>0.9%</td>
<td>1.1%</td>
<td>5.7%</td>
<td>3.9%</td>
<td>5.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>0.4%</td>
<td>0.6%</td>
<td>6.0%</td>
<td>5.9%</td>
<td>2.0%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.6%</td>
<td>0.5%</td>
<td>8.0%</td>
<td>10.8%</td>
<td>2.0%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>4.9%</td>
<td>7.7%</td>
<td>-1.1%</td>
<td>-5.4%</td>
</tr>
</tbody>
</table>
Mortgage Applications Fell 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116d.jpg" width="353">
The total number of mortgage applications fell 0.6% last week after a 2.3% gain the prior period, according to the Mortgage Bankers Association. The decline left the average level in November 4.4% below October.
Applications to refinance fell sharply for the fourth consecutive week. The 5.4% drop lowered the November average 11.1% versus October&#39;s.
Purchase applications rose 2.6% for the second consecutive weekly gain and the rise lifted applications in November 0.5% above October. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
The effective interest rate on a conventional 30-year mortgage was about stable at 6.59% but that was up versus June low of 5.81%. The effective rate on a 15-year mortgage was 6.18%. The interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
Bubbling (or Just Frothy) House Prices? from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/net/20051101/cover.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">11/11/05</th>
<th scope="col">11/04/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>657.6</td>
<td>661.3</td>
<td>-13.3%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>477.9</td>
<td>465.7</td>
<td>-0.5%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,702.4</td>
<td>1,798.8</td>
<td>-28.3%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
Foreign Investors Increase Net Securities Purchases in US Markets Again in September 
by <a href="/comment/Stone.html">Carol Stone</a> November 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116e.jpg" width="353">
Foreign investors continued to increase their participation in US securities markets in September, according to the US Treasury&#39;s monthly Treasury International Capital (&quot;TIC&quot;) data reported this morning. For the first time, net purchases of major marketable securities surpassed $100 billion, reaching $101.9 billion. As evident in the table below, just two years ago, monthly average purchases were only about half this amount.
The TIC data, carried in Haver&#39;s USINT database, constitute a sizable body of information about interest in US markets from investors in many countries around the world. Many observers look to these data as a way of gauging the ease with which foreign capital flows &quot;finance&quot; the now enormous US current account deficit. Indeed, as we have pointed out here before, there is a high correlation of these investment flows with the size of that deficit.
However, one aspect that strikes us this month is the variety contained in the transactions. While the volume in US Treasuries look fairly steady in our table, in individual months they have ranged from a net liquidation of $3.2 billion (February 2003) to net purchases in excess of $50 billion (each March and April 2004). Other securities categories show even more variability. Perhaps the only repeated pattern is a consistent liquidation of foreign stocks that trade in US markets.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051116f.jpg" width="353">
There is also great variability among the nations represented. A quick glance at a list of the countries and their purchases of various instruments shows much up and down movement in most any combination. Such wide-ranging changes highlight the fact that these transactions are generated by thousands of individual investment decisions. For example, total net purchases of US corporate stocks surged from $3.8 billion in August to $24.6 billion in September. Canadian investors bought about the same amount in each of these months: $6.6 billion in August and $5.4 billion in September. So other investors were obviously net sellers in the former month, but switched to making sizable purchases in the latter. Canadians, in the meantime, had bought $1.7 billion on net of US corporate bonds in August, but reduced their activity in these bonds to nearly zero in September. Thus, multiple investment motivations must be at work among these diverse financial market participants. Further, we&#39;d hazard a guess that any &quot;financing&quot; of the current account is more likely to be reflected in short-term financial instruments, such as flows of bank deposits, commercial paper and trade credit. Some of these data are also contained in the USINT database as &quot;banking liabilities to foreigners&quot; and &quot;nonbanking liabilities to foreigners. Those liabilities, some of which are published only quarterly and available only through Q2, have grown rapidly over the past year, as one might expect, but more examination of these relationships is needed to form firmer conclusions on the origins of these flows.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USINT/@U3/@U3.HTM">Net Foreign Purchases of Securities in US Markets</a> (Billions US$)</th>
<th scope="col">Sept 2005</th>
<th scope="col">Aug 2005 </th>
<th scope="col">July 2005 </th>
<th scope="col">Last 12 Months&#39; Average </th>
Monthly Average
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004 </td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Total </td>
<td>101.9</td>
<td>89.0</td>
<td>87.3</td>
<td>71.5</td>
<td>63.6</td>
<td>55.3</td>
<td>47.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Treasuries </td>
<td>21.8</td>
<td>28.2</td>
<td>28.5</td>
<td>25.7</td>
<td>29.3</td>
<td>22.0</td>
<td>10.0</td>
</tr>
<tr>
<td class="firstcol">Federal Agencies (mostly &quot;GSEs&quot;) </td>
<td>20.6</td>
<td>15.7</td>
<td>37.8</td>
<td>20.8</td>
<td>18.9</td>
<td>13.0</td>
<td>16.3</td>
</tr>
<tr class="odd">
<td class="firstcol">US Corporate Bonds </td>
<td>51.1</td>
<td>40.2</td>
<td>24.7</td>
<td>30.3</td>
<td>25.8</td>
<td>22.1</td>
<td>15.2</td>
</tr>
<tr>
<td class="firstcol">US Corporate Stocks </td>
<td>24.6</td>
<td>3.8</td>
<td>10.0</td>
<td>7.4</td>
<td>2.4</td>
<td>2.9</td>
<td>4.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign Bonds </td>
<td>-9.1</td>
<td>17.1</td>
<td>-5.1</td>
<td>-2.9</td>
<td>-5.7</td>
<td>2.7</td>
<td>2.4</td>
</tr>
<tr>
<td class="firstcol">Foreign Stocks </td>
<td>-7.0</td>
<td>-13.5</td>
<td>-8.7</td>
<td>-9.8</td>
<td>-7.1</td>
<td>-7.4</td>
<td>-0.1</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

<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/051115a.jpg" width="353">
Preliminary data released today show that Germany&#39;s Real Gross Domestic Product increased 0.6% in the third quarter, compared with revised increases of 0.6% in the first quarter and 0.2% in the second quarter. The unrevised increases for the first and second quarters were 0.8% and 0.0% respectively. For the three quarters of this year, real GDP is only 0.87% above the three corresponding quarters of 2004, suggesting that growth in 2005 is unlikely to exceed 1.0%. Nominal GDP increased 0.38% in the third quarter, less than the real increase, as the deflator declined 0.24%. This was one of the few times, in the past five years, when the deflator declined, as can be seen in the first chart which shows the quarter-to-quarter growth in Real and Nominal GDP.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051115b.jpg" width="353">
Information on the composition of GDP will not be available until November 22 when the more detailed release is scheduled to appear. However, the Federal Statistical Office offered some qualitative comments in the current release. A strong increase in exports and a considerable rise in capital formation had positive impacts on the quarter-to-quarter growth. Net exports were almost the only cause of year-to-year growth; domestic activity having made little contribution.
The ZEW Center for Economic Research released the results of its survey of institutional investors and financial analysts regarding the current economic situation and the outlook six months ahead. This was one of those rare times when the respondents were less pessimistic about the current situation than they were last month but less positive about the situation six months ahead as can be seem in the second chart. The decline in optimism about the future is generally attributed to doubts that the agreed upon economic program of the Grand Coalition scheduled to take office on November 22 may do little to encourage growth. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/GERMANY/@D8/@D8.HTM">Germany</a></th>
<th scope="col">Q3 05&nbsp;</th>
<th scope="col">Q2 05</th>
<th scope="col">Q3 04</th>
<th scope="col">Q/Q&nbsp; %</th>
<th scope="col">Y/Y %</th>
<th scope="col">2004&nbsp;%&nbsp;</th>
<th scope="col">2003 %</th>
<th scope="col">2002 %</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP (Bil. Euros)</td>
<td>561.05</td>
<td>558.90</td>
<td>557.16</td>
<td>0.38</td>
<td>1.61</td>
<td>1.88</td>
<td>0.84</td>
<td>1.55</td>
</tr>
<tr>
<td class="firstcol">GDP (Bil 2000 Chained Euros)&nbsp;</td>
<td>535.02</td>
<td>531.73</td>
<td>527.02</td>
<td>0.62</td>
<td>1.36</td>
<td>1.09</td>
<td>-.019</td>
<td>0.09</td>
</tr>
<tr class="odd">
<td class="firstcol">Deflator (2000 =100)</td>
<td>104.84</td>
<td>105.09</td>
<td>104.59</td>
<td>-0.24</td>
<td>0.24</td>
<td>0.79</td>
<td>1.03</td>
<td>1.45</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">ZEW Survey ( Percent Balance)</td>
<td>Nov 05&nbsp;</td>
<td>Oct 05</td>
<td>Nov 04</td>
<td>M/M&nbsp; Dif</td>
<td>Y/Y Dif</td>
<td>2004&nbsp; </td>
<td>2003&nbsp;</td>
<td>2002&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Current Situation</td>
<td>-55.2</td>
<td>-58.0</td>
<td>-57.8</td>
<td>2.8</td>
<td>2.6</td>
<td>-67.7</td>
<td>92.6</td>
<td>83.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Situation 6 Months Ahead</td>
<td>38.7</td>
<td>39.4</td>
<td>13.9&nbsp;</td>
<td>-0.7&nbsp;</td>
<td>24.8&nbsp;</td>
<td>&nbsp; 44.6&nbsp;</td>
<td>&nbsp;38.4</td>
<td>&nbsp;45.3</td>
</tr>
</tbody>
</table>
</body>
</html>

Preliminary data released today show that Germany's Real Gross Domestic Product increased 0.6% in the third quarter, compared with revised increases of 0.6% in the first quarter and 0.2% in the second quarter. The unrevised increases [...]

German Economic Growth Increases in the Third Quarter but ZEW Survey Raises Doubts About the Outlook

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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

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


Privacy Policy

Disclaimer

Contact us

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

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

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

Charts of the Week: Tariff Truce, Tenuous Trust

250501J5.jpg

250501K5.jpg

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

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

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

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

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

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

250501L5.jpg

250501M5.jpg

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

U.S. ISM Manufacturing Index Indicates Contraction in April

Winnie Tapasanun

250501N.jpg

250501O.jpg

The value of construction put in place unexpectedly fell 0.5% m/m in March after rises of 0.6% in February (+0.7% initially) and 0.1% in January (-0.5% previously), data from the U.S. Census Bureau showed. The March reading was the first m/m fall following five straight m/m gains. A 0.3% m/m March rise had been expected in the Action Economics Forecast Survey. The year-on-year rate of increase decelerated to 2.8% in March, the lowest since May 2019, after registering at 3.4% in February and January. The latest y/y figure was lower than 8.7% in March 2024; thus, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.

Private construction slid 0.6% (+2.3% y/y) in March, down for the first time since September, following increases of 0.7% in February (+0.9% initially) and 0.1% in January (-0.7% previously). Residential private construction fell 0.4% (+2.8% y/y) in March, the first m/m fall in six months, after an unrevised 1.3% gain in February. Home improvement building dropped 1.2% (+13.4% y/y), the first m/m decline since December, following a 2.3% February gain; it was 41.1% of the residential private construction. Single-family building edged up 0.1% (-0.8% y/y), the smallest of seven consecutive m/m increases, after a 0.8% February rise; it was 46.6% of the residential private construction. Meanwhile, multi-family building was essentially unchanged m/m (-12.1% y/y) in March following 15 straight m/m decreases; it was 12.3% of the residential private construction.

Nonresidential private construction fell 0.8% (+1.6% y/y) in March after a 0.1% increase in February (+0.4% initially) and a 0.1% easing in January (-0.2% previously). The March fall reflected m/m drops in the following nonresidential private constructions. These included religious (-2.9%; +16.4% y/y), health care (-2.2%; -5.2% y/y), office (-1.8%; +2.7% y/y), educational (-1.7%; -4.2% y/y), lodging (-1.6%; -1.0% y/y), commercial (-1.0%; -5.8% y/y), manufacturing (-0.4%; +3.6% y/y), communication (-0.3%; +2.2% y/y), and utilities (-0.1%; +7.0% y/y). In contrast, private constructions for amusement & recreation (1.5%; 7.0% y/y) and transportation (0.7%; 10.2% y/y) rose m/m in March.

The value of public construction declined 0.2% (+4.7% y/y) in March after holding steady in February (+0.2% initially), reflecting a 0.2% increase (-1.9% y/y) in residential public construction and a 0.2% easing (+4.8% y/y) in nonresidential public construction. The March decline reflected m/m drops in the following nonresidential public constructions. These included utilities (-4.8%; -12.8% y/y), commercial (-1.6%; +40.3% y/y), amusement & recreation (-1.0%; +19.1% y/y), educational (-0.6%; +7.6% y/y), sewage & waste disposal (-0.6%; +10.6% y/y), and health care (-0.4%; +13.0% y/y). Notably, spending on highways & streets, which made up 28.7% of public construction spending, fell 0.5% (-2.4% y/y) in March, the first m/m fall since October, following a 0.9% increase in February. To the upside, the following public constructions rose m/m in March: office (1.6%; 6.0% y/y), transportation (1.4%; 7.3% y/y), public safety (0.7%; 4.1% y/y), conservation & development (0.6%; 4.7% y/y), and water supply (0.6%; 12.2% y/y).

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

250501P.jpg

250501Q.jpg

- March construction spending -0.5% m/m; +2.8% y/y, the lowest y/y rate since May ’19.
- Residential private construction -0.4% m/m, led by a 1.2% drop in home improvement building.
- Nonresidential private construction -0.8% m/m, down for the second month in three.
- Public sector construction -0.2% m/m, reflecting a 0.2% decline in nonresidential public building.

U.S. Construction Spending Unexpectedly Drops in March, the First M/M Fall Since September

250501A8.jpg

250501B8.jpg

Initial claims for unemployment insurance rose 18,000 in the week ended April 26 to 241,000, seasonally adjusted.  This is higher by 16,000 than the Action Economics Forecast Survey amount of 225,000 and is the largest amount since the week of February 22. The previous week’s actual count was revised up by 1,000 to 223,000, from 222,000 reported initially.

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

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

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

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

250501C8.jpg

250501D8.jpg

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

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

250430N1.jpg

250430O1.jpg

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

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

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

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

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

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

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

250430P1.jpg

250430Q1.jpg

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

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

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

250430R1.jpg

250430S1.jpg

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

Economy in Brief: November 2005

Jump to:

Industrial Output Rebounded in October

Industrial Output Rebounded in October

Foreign Investors Increase Net Securities Purchases in US Markets Again in September

Mortgage Applications Fell

U.S. Business Inventories Higher Again

Home Heating Costs Lifted CPI

Home Heating Costs Lifted CPI

German Economic Growth Increases in the Third Quarter but ZEW Survey Raises Doubts About the Outlook