Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121e.jpg" width="353">
Chain store sales last week improved 1.2% and recovered all of the prior week&#39;s 0.8% decline, according to the International Council of Shopping Centers (ICSC)-UBS. The increase lifted sales in November 0.3% from the October average which fell 0.7% from September.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The leading indicator of chain store sales from ICSC-UBS added 0.5% (0.8% y/y) to the prior week&#39;s 0.8% jump.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">11/18/06</th>
<th scope="col">11/11/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>468.2</td>
<td>462.9</td>
<td>2.2%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>


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Chain store sales last week improved 1.2% and recovered all of the prior week's 0.8% decline, according to the International Council of Shopping Centers (ICSC)-UBS. The increase lifted sales in November 0.3% from the October average [...]

Chain Store Sales Rose

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121d.jpg" width="353">
The National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago remained negative in October at -0.31, negative for the fifth month in the last six. The three-month moving average of the CFNAI dropped to -0.19, its lowest level since Hurricane Katrina depressed activity last year.
A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth and during the last twenty years there has been a 68% correlation between the level of the CFNAI and q/q growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production and income, the labor market, personal consumption and housing, manufacturing and trade sales, and inventories &amp; orders.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_November2006.pdf">here</a>.
The latest Survey of Professional Forecasters from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/files/spf/survq406.html"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago Fed</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">October &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-0.31</td>
<td>-0.38</td>
<td>1.03</td>
<td>0.20</td>
<td>0.35</td>
<td>-0.15</td>
</tr>
</tbody>
</table>
</body>
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The National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago remained negative in October at -0.31, negative for the fifth month in the last six. The three-month moving average of the CFNAI dropped to -0.19, its lowest [...]

Chicago Fed Nat'l Activity Index Remained Negative

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121d.jpg" width="353">
The National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago remained negative in October at -0.31, negative for the fifth month in the last six. The three-month moving average of the CFNAI dropped to -0.19, its lowest level since Hurricane Katrina depressed activity last year.
A zero value of the CFNAI indicates that the economy is expanding at its historical trend rate of growth and during the last twenty years there has been a 68% correlation between the level of the CFNAI and q/q growth in real GDP.
The CFNAI is a weighted average of 85 indicators of economic activity. The indicators reflect activity in the following categories: production and income, the labor market, personal consumption and housing, manufacturing and trade sales, and inventories &amp; orders.
The complete CFNAI report is available <a href="http://www.chicagofed.org/economic_research_and_data/files/cfnai_November2006.pdf">here</a>.
The latest Survey of Professional Forecasters from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/files/spf/survq406.html"> here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM">Chicago Fed</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">October &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">CFNAI</td>
<td>-0.31</td>
<td>-0.38</td>
<td>1.03</td>
<td>0.20</td>
<td>0.35</td>
<td>-0.15</td>
</tr>
</tbody>
</table>
Chain Store Sales Rose 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 21, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121e.jpg" width="353">
Chain store sales last week improved 1.2% and recovered all of the prior week&#39;s 0.8% decline, according to the International Council of Shopping Centers (ICSC)-UBS. The increase lifted sales in November 0.3% from the October average which fell 0.7% from September.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
The leading indicator of chain store sales from ICSC-UBS added 0.5% (0.8% y/y) to the prior week&#39;s 0.8% jump.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">11/18/06</th>
<th scope="col">11/11/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
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<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>468.2</td>
<td>462.9</td>
<td>2.2%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Gasoline Prices Up A Bit 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 21, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121a.jpg" width="353">
 Regular unleaded gasoline prices at the pump rose a penny last week to an average $2.24 per gallon. It was the third increase in the last four weeks since the low of $2.21. Average gas prices this month nevertheless remained down three cents from the October average of $2.25 per gallon.
This week, the spot market (NY harbor) price for a gallon of regular gasoline has risen to an average $1.60 from $1.57 last week. Fuel oil prices similarly have shown little decline ahead of the heating season. Yesterday&#39;s spot price of $1.62 per gallon compared to $1.65 during October.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121b.jpg" width="353">
Crude oil prices, however, have moved lower. WTI crude yesterday traded for $56.46 (-1.3% y/y) per barrel versus an average $58.88 during October and $63.86 in September.
The heating season also has given some lift to natural gas prices. At $7.35 per mmbtu (-28.5% y/y) yesterday, the Henry Hub price was up from an average of $5.77 in October and $4.90 during September. <img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121c.jpg" width="353">
The Department of Energy reported that gasoline demand during the latest four weeks rose 2.6% from the year earlier period. That increase, however, continued to understate the demand for gasoline according to estimated figures from the Oil &amp; Gas Journal which showed a 7.1% rise. These figures are available in the Haver OILWKLY database.
The latest Short-Term Energy Outlook from the U.S. Energy Information Administration is available <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.html">here</a>.
Financial Markets and the Federal Reserve are remarks by Fed Governor Kevin M. Warsh at the New York Stock Exchange and they are available <a href="http://www.federalreserve.gov/boarddocs/speeches/2006/20061121/default.htm">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">Weekly Energy Prices</a></th>
<th scope="col">11/20/06</th>
<th scope="col">11/13/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">US Retail Gasoline Price, Regular</td>
<td>$2.24</td>
<td>$2.23</td>
<td>1.7%</td>
<td>$2.27</td>
<td>$1.85</td>
<td>$1.56</td>
</tr>
</tbody>
</table>
Migration and the New Zealand Economy 
by <a href="/comment/Curley.html">Louise Curley</a> November 21, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121j.jpg" width="353">
As a small country with a population of only 4.2 million, migration in and out of New Zealand tends to amplify economic trends that would not be noticed in a larger country. The peripatetic New Zealanders frequently go to and from Australia and the UK staying a year or more. In recent years there has been an influx of students from Asia who also tend to stay for a period of years completing their education and then returning home. New Zealand tracks these movements and publishes monthly data on net permanent and long term migration. (Total net migration and net migration by country can be found in the Haver data base, ANZ.)<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121k.jpg" width="353">
Net permanent and long-term migration is derived by subtracting permanent and long-term departures from permanent and long-term arrivals. Permanent and long- term arrivals include overseas migrants intending to stay for a period of twelve months or more or permanently, plus New Zealand residents returning after an absence of 12 months or more. Permanent and long-term departures include New Zealand residents intending to stay abroad for 12 months or more or permanently plus overseas visitors departing after a stay of 12 months or more.
As the first chart shows, year to year differences in net migration are largely responsible for the unusual ups and downs in the total population. The large influx of immigrants in 2001 and 2002 had a notable effect on the housing market as can be seen in the second chart that shows the year to year changes in housing prices and net migration. The decline in net migration has, in part, been a factor in the deceleration of GDP growth that has taken place since the end of 2004 as can be seen in the third chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061121l.jpg" width="353">
Net migration varies from quarter to quarter but the downward trend started in late 2002 seems to have abated. In the third quarter of this year, net migration was 4,965, the highest quarterly figure since the first quarter of 2004. To the extent that migration matters, economic developments in New Zealand may be looking up.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol">NEW ZEALAND&nbsp;</th>
<th scope="col">Oct 06</th>
<th scope="col">Q3 06&nbsp;</th>
<th scope="col">Q2 06&nbsp;</th>
<th scope="col">Q 1 06&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
<th scope="col">2001</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Net Migration (persons)</td>
<td>2352</td>
<td>4965</td>
<td>-1201</td>
<td>4772</td>
<td>6971</td>
<td>15108</td>
<td>34906</td>
<td>38198</td>
<td>9726</td>
</tr>
<tr>
<td class="firstcol">Population (000)</td>
<td></td>
<td>4152</td>
<td>4140</td>
<td>4134</td>
<td>4105</td>
<td>4065</td>
<td>4018</td>
<td>3950</td>
<td>3891</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;</td>
<td></td>
<td>Q3 06&nbsp;</td>
<td>Q2 06&nbsp;</td>
<td>Q 1 06&nbsp;</td>
<td>2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
<td>2001</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Real GDP (SAAR)</td>
<td></td>
<td></td>
<td>1.69</td>
<td>2.59</td>
<td>2.12</td>
<td>4.16</td>
<td>3.64</td>
<td>4.23</td>
<td>2.51</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; House Prices (% Chg)</td>
<td></td>
<td></td>
<td>3.69</td>
<td>10.31</td>
<td>14.51</td>
<td>17.97</td>
<td>19.41</td>
<td>9.51</td>
<td>1.83</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120j.jpg" width="353">
Seasonally unadjusted GDP data are available for the third quarter for Taiwan and Singapore. The year-over-year increase in real Taiwanese GDP in the third quarter was 4.4% while the nominal increase was 3.5% implying a decline in the deflator. While most other countries in the Asian Pacific region--even Japan--have seen a reversal of price trends from declines to modest increases, Taiwan is still experiencing declines. The year-over-year change in the deflator for Taiwan is compared with that of Singapore in the first chart. While both countries show considerable variation in the year-over-year changes in the deflators, there is a clear downward trend in the Taiwan data and a slight upward trend in the Singapore data.
Real growth in Taiwan increased 4.4% in the third quarter. So far this year growth has been steady at around the 4 plus percent level. Growth in Singapore, on the other hand, has declined over the year from 10.7% in the first quarter to 8.2% in the second and 7.2% in the third. The year-over-year growth in real GDP for the two countries is shown in the second chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120k.jpg" width="353">
Taiwan and, particularly, Singapore are two of the smaller nations of the Pacific Rim. In dollar terms, the GDP of Taiwan is currently about $88 billion and Singapore, $33 billion, compared to Japan&#39;s $1.1 trillion. They have been, however, among the faster growing nations in the East.

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<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Q3 06 Y/Y %</th>
<th scope="col">Q2 06 Y/Y %</th>
<th scope="col">Q 1 06 Y/Y %</th>
<th scope="col">2005&nbsp; &nbsp;%</th>
<th scope="col">2004&nbsp; %</th>
<th scope="col">2003&nbsp; %</th>
<th scope="col">2002&nbsp; %</th>
<th scope="col">2001&nbsp; %</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">TAIWAN GDP</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current NT$ (NSA)</td>
<td>3.37</td>
<td>3.35</td>
<td>3.47</td>
<td>3.49</td>
<td>4.38</td>
<td>1.22</td>
<td>3.37</td>
<td>-1.69</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Real 2001 NT$ (NSA)</td>
<td>4.92</td>
<td>4.57</td>
<td>4.39</td>
<td>4.03</td>
<td>6.07</td>
<td>3.43</td>
<td>4.25</td>
<td>-2.17</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">SINGAPORE</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current S$ (NSA)</td>
<td>9.78</td>
<td>6.76</td>
<td>8.15</td>
<td>6.96</td>
<td>12.48</td>
<td>1.98</td>
<td>3.27</td>
<td>-4.03</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Real 2001 S$ (NSA)</td>
<td>10.66</td>
<td>8.17</td>
<td>7.21</td>
<td>6.35</td>
<td>8.72</td>
<td>2.93</td>
<td>4.04</td>
<td>-2.28</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
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Seasonally unadjusted GDP data are available for the third quarter for Taiwan and Singapore. The year-over-year increase in real Taiwanese GDP in the third quarter was 4.4% while the nominal increase was 3.5% implying a decline in the [...]

Taiwan and Singapore Report 3rd Quarter Gross Domestic Product

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120a.jpg" width="353">
The composite index of leading economic indicators rose 0.2% last month after an upwardly revised 0.4% gain during September, according to the Conference Board. The back to back increases were the first since January and followed several monthly declines during 2006 but the October increase fell short of Consensus expectations for a 0.3% rise.
During the last ten years there has been a 59% correlation between the y/y change in the leading indicators and the lagged change in real GDP.
The breadth of one month gain amongst the 10 components of the leading index improved to 60%, the best since June.
Higher stock prices, improved consumer sentiment, and especially a higher money supply offset lower building permits and weaker vendor performance to generate the leader&#39;s increase last month.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120b.jpg" width="353">
The method of calculating the contribution to the leading index from the spread between 10 year Treasury securities and the Fed funds rate has been revised. A negative contribution will now occur only when the spread inverts rather than when declining as in the past. More details can be found <a href="http://www.conference-board.org/pdf_free/economics/bci/lei0705.pdf">here</a>.
The leading index is based on eight previously reported economic data series. Two series, orders for consumer goods and orders for capital goods, are estimated.
The coincident indicators increased 0.1% after an upwardly revised 0.2% increase during September. Over the last ten years there has been a 91% correlation between the y/y change in the coincident indicators and real GDP growth.
The lagging indicators increased 0.2% for the second month as the average duration of unemployment lengthened. The ratio of coincident to lagging indicators, which is a measure of actual economic performance versus excess, fell after three consecutive months of increase.
Visit the Conference Board&#39;s <a href="http://www.conference-board.org">site</a> for coverage of leading indicator series from around the world.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/BCI/BCI.HTM">Business Cycle Indicators</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Leading</td>
<td>0.2%</td>
<td>0.4%</td>
<td>1.0%</td>
<td>2.3%</td>
<td>7.4%</td>
<td>5.0%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.1%</td>
<td>0.2%</td>
<td>2.7%</td>
<td>2.2%</td>
<td>2.5%</td>
<td>0.4%</td>
</tr>
</tbody>
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The composite index of leading economic indicators rose 0.2% last month after an upwardly revised 0.4% gain during September, according to the Conference Board. The back to back increases were the first since January and followed [...]

U.S. Leading Economic Indicators Better

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120a.jpg" width="353">
The composite index of leading economic indicators rose 0.2% last month after an upwardly revised 0.4% gain during September, according to the Conference Board. The back to back increases were the first since January and followed several monthly declines during 2006 but the October increase fell short of Consensus expectations for a 0.3% rise.
During the last ten years there has been a 59% correlation between the y/y change in the leading indicators and the lagged change in real GDP.
The breadth of one month gain amongst the 10 components of the leading index improved to 60%, the best since June.
Higher stock prices, improved consumer sentiment, and especially a higher money supply offset lower building permits and weaker vendor performance to generate the leader&#39;s increase last month.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120b.jpg" width="353">
The method of calculating the contribution to the leading index from the spread between 10 year Treasury securities and the Fed funds rate has been revised. A negative contribution will now occur only when the spread inverts rather than when declining as in the past. More details can be found <a href="http://www.conference-board.org/pdf_free/economics/bci/lei0705.pdf">here</a>.
The leading index is based on eight previously reported economic data series. Two series, orders for consumer goods and orders for capital goods, are estimated.
The coincident indicators increased 0.1% after an upwardly revised 0.2% increase during September. Over the last ten years there has been a 91% correlation between the y/y change in the coincident indicators and real GDP growth.
The lagging indicators increased 0.2% for the second month as the average duration of unemployment lengthened. The ratio of coincident to lagging indicators, which is a measure of actual economic performance versus excess, fell after three consecutive months of increase.
Visit the Conference Board&#39;s <a href="http://www.conference-board.org">site</a> for coverage of leading indicator series from around the world.

<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/BCI/BCI.HTM">Business Cycle Indicators</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Leading</td>
<td>0.2%</td>
<td>0.4%</td>
<td>1.0%</td>
<td>2.3%</td>
<td>7.4%</td>
<td>5.0%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.1%</td>
<td>0.2%</td>
<td>2.7%</td>
<td>2.2%</td>
<td>2.5%</td>
<td>0.4%</td>
</tr>
</tbody>
</table>
Taiwan and Singapore Report 3rd Quarter Gross Domestic Product 
by <a href="/comment/Curley.html">Louise Curley</a> November 20, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120j.jpg" width="353">
Seasonally unadjusted GDP data are available for the third quarter for Taiwan and Singapore. The year-over-year increase in real Taiwanese GDP in the third quarter was 4.4% while the nominal increase was 3.5% implying a decline in the deflator. While most other countries in the Asian Pacific region--even Japan--have seen a reversal of price trends from declines to modest increases, Taiwan is still experiencing declines. The year-over-year change in the deflator for Taiwan is compared with that of Singapore in the first chart. While both countries show considerable variation in the year-over-year changes in the deflators, there is a clear downward trend in the Taiwan data and a slight upward trend in the Singapore data.
Real growth in Taiwan increased 4.4% in the third quarter. So far this year growth has been steady at around the 4 plus percent level. Growth in Singapore, on the other hand, has declined over the year from 10.7% in the first quarter to 8.2% in the second and 7.2% in the third. The year-over-year growth in real GDP for the two countries is shown in the second chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061120k.jpg" width="353">
Taiwan and, particularly, Singapore are two of the smaller nations of the Pacific Rim. In dollar terms, the GDP of Taiwan is currently about $88 billion and Singapore, $33 billion, compared to Japan&#39;s $1.1 trillion. They have been, however, among the faster growing nations in the East.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Q3 06 Y/Y %</th>
<th scope="col">Q2 06 Y/Y %</th>
<th scope="col">Q 1 06 Y/Y %</th>
<th scope="col">2005&nbsp; &nbsp;%</th>
<th scope="col">2004&nbsp; %</th>
<th scope="col">2003&nbsp; %</th>
<th scope="col">2002&nbsp; %</th>
<th scope="col">2001&nbsp; %</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">TAIWAN GDP</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current NT$ (NSA)</td>
<td>3.37</td>
<td>3.35</td>
<td>3.47</td>
<td>3.49</td>
<td>4.38</td>
<td>1.22</td>
<td>3.37</td>
<td>-1.69</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Real 2001 NT$ (NSA)</td>
<td>4.92</td>
<td>4.57</td>
<td>4.39</td>
<td>4.03</td>
<td>6.07</td>
<td>3.43</td>
<td>4.25</td>
<td>-2.17</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">SINGAPORE</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current S$ (NSA)</td>
<td>9.78</td>
<td>6.76</td>
<td>8.15</td>
<td>6.96</td>
<td>12.48</td>
<td>1.98</td>
<td>3.27</td>
<td>-4.03</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Real 2001 S$ (NSA)</td>
<td>10.66</td>
<td>8.17</td>
<td>7.21</td>
<td>6.35</td>
<td>8.72</td>
<td>2.93</td>
<td>4.04</td>
<td>-2.28</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
</body>
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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061117j.jpg" width="353">
Mexico&#39;s GDP is enjoying its best run of growth since before dot.com bust in 2001. In Q3, the year-on-year gain was 4.6%, following 5.5% and 4.7% in Q1 and Q2, respectively. The quarterly growth in Q3 was 1.0% from Q2, led by construction and transportation. Manufacturing edged up a mere 0.1% and didn&#39;t grow at all in Q2, but it had surged 2.9% in Q1 and is ahead 5.1% year-on-year. These data were reported yesterday afternoon, November 16, by INEGI, the Mexican government statistics institute.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061117k.jpg" width="353">
Government officials, speaking prior to the G-20 Conference in Melbourne, Australia, indicated that this pattern was in line with their hopes. Their aim is to diminish the Mexican economy&#39;s dependency on demand from the US. So they are emphasizing local construction and services industries. The financial sector and other business services are up 4.6% year-on-year for Q3, the same as total GDP, but they have been expanding more rapidly than the total for most of the last five years. Finance Minister Gil Diaz highlighted the growth in construction, fueled in part by expansion of mortgage lending. Indeed, during the first half of this year, mortgage lending at banks was running more than 40% ahead of last year. Gross value added in construction is up 7.7% in Q3 from a year ago and 2.6% Q3/Q2 alone. Another strong sector is transportation, storage and communication, up 9.4% year-on-year. Mexico&#39;s output of oil is slowing, but its production of natural gas is growing rapidly, and we would surmise that pipeline usage is one part of the gain in the transportation sector.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Mexico</th>
<th scope="col">Bil. New 1993 Pesos</th>
<th scope="col">Q3 2006</th>
<th scope="col">Q2 2006</th>
<th scope="col">Q1 2006</th>
<th scope="col">Year Ago</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real GDP</td>
<td>1854.1</td>
<td>0.9</td>
<td>0.8</td>
<td>1.9</td>
<td>4.6</td>
<td>3.0</td>
<td>4.2</td>
<td>1.3</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>330.0</td>
<td>0.1</td>
<td>-0.0</td>
<td>2.9</td>
<td>5.1</td>
<td>1.2</td>
<td>4.0</td>
<td>-1.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>73.8</td>
<td>2.6</td>
<td>-0.1</td>
<td>2.1</td>
<td>7.7</td>
<td>3.3</td>
<td>6.1</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">Transportation, Etc.</td>
<td>236.4</td>
<td>1.8</td>
<td>1.5</td>
<td>4.1</td>
<td>9.4</td>
<td>7.1</td>
<td>9.2</td>
<td>5.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Finance, Other Business Services</td>
<td>301.3</td>
<td>0.5</td>
<td>1.4</td>
<td>1.2</td>
<td>4.6</td>
<td>5.8</td>
<td>3.9</td>
<td>3.9</td>
</tr>
</tbody>
</table>
</body>
</html>

Mexico's GDP is enjoying its best run of growth since before dot.com bust in 2001. In Q3, the year-on-year gain was 4.6%, following 5.5% and 4.7% in Q1 and Q2, respectively. The quarterly growth in Q3 was 1.0% from Q2, led by [...]

Mexico GDP Up 4.6% Yr/Yr in Q3, With Good Gains in Construction and Services

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061117a.jpg" width="353">
In October, housing starts more than retraced the downwardly revised 4.9% September gain and fell 14.6% to the lowest level since July 2000. The latest result fell well short of Consensus expectations for 1.68M starts.
At 1.486M units, the October figure pulled the year-to-date average to 1.863 starts and 10.2% below the first ten months of 2005.
Single-family starts in October fell 15.9% to 1.177M, also the lowest level since July 2000. The year-to-date average level of single family starts fell 11.5% from 2005. Multi family starts in addition were down by 9.1% m/m.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/061117b.jpg" width="353">
By region, single family housing starts were weakest down South and fell 24.8% (-32.4% y/y). Starts also fell 9.1% (-32.9% y/y) out West, were 7.3% (-33.1% y/y) lower in the Midwest but in the Northeast single family starts rose 10.9% (-22.2% y/y).
Building permits fell 6.3% after a revised 5.2% September drop. The ninth monthly decline this year was to the lowest level since 1997. Permits to start single family homes fell 3.8% (-31.7% y/y), the lowest since 2000.
What Do Financial Asset Prices Say About the Housing Market? from the Board of Governors of the Federal Reserve System can be found <a href="http://www.federalreserve.gov/pubs/feds/2006/200632/200632abs.html"> 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">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>1,486</td>
<td>1,740</td>
<td>-27.4%</td>
<td>2,073</td>
<td>1,950</td>
<td>1,854</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-family</td>
<td>1,177</td>
<td>1,400</td>
<td>-31.8%</td>
<td>1,719</td>
<td>1,604</td>
<td>1,505</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-family</td>
<td>309</td>
<td>340</td>
<td>-3.4%</td>
<td>354</td>
<td>345</td>
<td>349</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>1,535</td>
<td>1,638</td>
<td>-28.0%</td>
<td>2,159</td>
<td>2,058</td>
<td>1,888</td>
</tr>
</tbody>
</table>
</body>
</html>

In October, housing starts more than retraced the downwardly revised 4.9% September gain and fell 14.6% to the lowest level since July 2000. The latest result fell well short of Consensus expectations for 1.68M starts. At 1.486M [...]

Housing Starts Plumb Six Year Low

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

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

Charts of the Week: Tariff Truce, Tenuous Trust

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.

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- 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

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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**.

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- 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

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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.

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- 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

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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.

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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**.

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- 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 2006

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