Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050217c.jpg" width="353">
The Composite Index of Leading Economic Indicators fell 0.3% in January following two months of 0.3% gain, reported the Conference Board. The six-month growth rate for the leaders remained negative at -1.4%. Six month growth in the leaders deeper than -2.5% preceded past US recessions.
The breadth of one month gain amongst the 10 components of the leading index narrowed to 40% from 60% in December and 70% in November and the six month breadth of gain backpedaled to 50% from 70% the prior period. The largest negative contribution was made in January by lower vendor performance. Stock prices and the yield curve also were negative contributors.
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.
A longer leading indicator, the ratio of the coincident to the lagging indicators which measures actual economic performance relative to excess fell from the record high in December, the first decline since September.
The coincident indicators were unchanged following an upwardly revised 1.1% surge in December. The six-month growth rate dipped slightly to 3.6%. During the last ten years there has been an 84% correlation between the six month growth in the coincident indicators and two quarter growth in real GDP.
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">Jan</th>
<th scope="col">Dec</th>
<th scope="col">6-Month Chg</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">Leading</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>-1.4%</td>
<td>3.0%</td>
<td>1.3%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.0%</td>
<td>1.1%</td>
<td>3.6%</td>
<td>2.5%</td>
<td>0.4%</td>
<td>-0.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>0.3%</td>
<td>-0.7%</td>
<td>0.8%</td>
<td>-2.1%</td>
<td>-1.9%</td>
<td>-2.3%</td>
</tr>
</tbody>
</table>
</body>
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The Composite Index of Leading Economic Indicators fell 0.3% in January following two months of 0.3% gain, reported the Conference Board. The six-month growth rate for the leaders remained negative at -1.4%. Six month growth in the [...]

Leading Indicators Backpedaled

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050217c.jpg" width="353">
The Composite Index of Leading Economic Indicators fell 0.3% in January following two months of 0.3% gain, reported the Conference Board. The six-month growth rate for the leaders remained negative at -1.4%. Six month growth in the leaders deeper than -2.5% preceded past US recessions.
The breadth of one month gain amongst the 10 components of the leading index narrowed to 40% from 60% in December and 70% in November and the six month breadth of gain backpedaled to 50% from 70% the prior period. The largest negative contribution was made in January by lower vendor performance. Stock prices and the yield curve also were negative contributors.
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.
A longer leading indicator, the ratio of the coincident to the lagging indicators which measures actual economic performance relative to excess fell from the record high in December, the first decline since September.
The coincident indicators were unchanged following an upwardly revised 1.1% surge in December. The six-month growth rate dipped slightly to 3.6%. During the last ten years there has been an 84% correlation between the six month growth in the coincident indicators and two quarter growth in real GDP.
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">Jan</th>
<th scope="col">Dec</th>
<th scope="col">6-Month Chg</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">Leading</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>-1.4%</td>
<td>3.0%</td>
<td>1.3%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.0%</td>
<td>1.1%</td>
<td>3.6%</td>
<td>2.5%</td>
<td>0.4%</td>
<td>-0.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>0.3%</td>
<td>-0.7%</td>
<td>0.8%</td>
<td>-2.1%</td>
<td>-1.9%</td>
<td>-2.3%</td>
</tr>
</tbody>
</table>
Import Prices Higher With Petroleum, Non Oil Prices Easier 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 17, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050217b.jpg" width="353">
Import prices rose 0.9% last month due to a surprising 4.6% spurt in petroleum prices. Consensus expectations had been for a 0.6% rise. Nonpetroleum prices, however, rose an easier 0.2% following a downwardly revised gain of 0.4% in December.
During the last ten years there has been a negative 55% correlation between the foreign exchange value of the dollar against major currencies and the y/y change in nonpetroleum import prices. There has been a negative 39% correlation between the broad trade weighted dollar index and prices.
Import pricing strength in January was pronounced for consumer goods less autos, up 0.4% (0.8% y/y). Capital goods prices rose a moderate 0.2% (-0.8% y/y) but that gain was held back by a 1.0% (-6.9% y/y) decline in computer prices. Excluding computers capital goods prices rose 0.8% (2.3% y/y), lifted by a 1.7% rise in prices for civilian aircraft. Motor vehicle and parts prices fell 0.1% (+1.6% y/y) and food &amp; beverage prices fell 0.2% (+6.9% y/y).
Petroleum prices jumped 4.6%. The price of Brent crude oil rose to $43.55 in January and is up roughly another dollar this month.
Export prices rose 0.7% due to a 0.7% surge (5.1% y/y) in nonagricultural export prices.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA)</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</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">Import - All Commodities</td>
<td>0.9%</td>
<td>-1.4%</td>
<td>6.0%</td>
<td>5.6%</td>
<td>2.9%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>4.6%</td>
<td>-11.5%</td>
<td>26.9%</td>
<td>30.4%</td>
<td>21.0%</td>
<td>3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>0.2%</td>
<td>0.4%</td>
<td>3.0%</td>
<td>2.6%</td>
<td>1.1%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>0.7%</td>
<td>0.2%</td>
<td>4.0%</td>
<td>3.9%</td>
<td>1.6%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
Initial Jobless Insurance Claims Held the Low Ground 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 17, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050217a.jpg" width="353">
Initial claims for unemployment insurance inched down another 2,000 to 302,000 last week, the lowest level since late 2000. The prior week&#39;s figure was revised up slightly and Consensus expectations had been for 315,000 claims.
The latest figure covers the February survey period for nonfarm payrolls and initial claims were 16,000 (5.0%) lower than the prior month.
The four week moving average of initial claims fell to 311,750 (-13.5% y/y).
Continuing claims for unemployment insurance fell 14,000 following a downwardly revised gain of 40,000 the prior week.
During the last ten years there has been a (negative) 75% correlation between the level of initial claims for unemployment insurance and the monthly change in payroll employment. There has been a (negative) 66% correlation with the level of continuing claims.
The insured rate of unemployment fell to 2.1%, the lowest since 2001.

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<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">02/12/05</th>
<th scope="col">02/05/05</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>302</td>
<td>304</td>
<td>-13.7%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,717</td>
<td>-15.9%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
Philadelphia Fed Activity Index Improved 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 17, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050217f.jpg" width="353">
The Philadelphia Fed reported that its Index of General Business Conditions in the manufacturing sector improved in February to 23.9 from an unrevised 13.2 the prior month. Consensus expectations had been for a reading of 17.5.
During the last ten years there has been a 69% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 52% correlation with q/q growth in real GDP.
Shipments recovered sharply but orders improved just modestly as the number of employees fell. During the last ten years there has been a 64% correlation between the employment index and the three month growth in factory payrolls.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050217h.jpg" width="353">
The business conditions index reflects a separate survey question, not the sub indexes.
The separate index of expected business conditions in six months also improved but just moderately.
The prices paid index fell to the lowest level in a year. During the last ten years there has been a 75% correlation between the prices paid index and the three month growth in the intermediate goods PPI. The correlation with the finished goods PPI has been 50% and with the CPI it&#39;s been 43%.
The Philadelphia Fed index is based on a survey of 250 regional manufacturing firms, but these firms sell nationally and internationally.
The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found <a href="http://www.phil.frb.org/files/bos/bos0205.html">here</a>.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050217g.jpg" width="353">

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S504/@S504.HTM">Philadelphia Fed Business Outlook</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Feb &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>23.9</td>
<td>13.2</td>
<td>30.1</td>
<td>28.1</td>
<td>10.6</td>
<td>7.7</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>43.5</td>
<td>66.1</td>
<td>43.0</td>
<td>51.3</td>
<td>16.8</td>
<td>12.3</td>
</tr>
</tbody>
</table>
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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/050216e.jpg" width="353">
Japanese GDP, reported for Q4 today in Tokyo, badly disappointed. It fell 0.1% (0.5% annualized), compared with a 0.7% increase expected by market forecasters. Thus, after a 1.4% gain in Q1, GDP has now fallen three consecutive quarters, leading some to say that Japan has once again slumped into recession.
Sluggish household spending was the main culprit, down 0.3% following -0.2% in Q3. Imports also contributed with a sizable 3.1% quarterly increase. In contrast, capital spending advanced 0.5%, with gains in both dwellings and private plant and equipment. Government investment declined, but much less than in Q3. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216f.jpg" width="353">
The shallow declines, while weaker than market expectations, still left GDP well above year-earlier levels. And the growth for the year as a whole, 2.6% over 2003, was the largest since 1996. Yesterday, in discussing the shortfall in European growth, Louise Curley illustrated the constricting forces of strong currency and higher oil prices. These factors also apply in Japan. Further, employment in Japan has been weak for several years, also restraining consumer spending; the number of employed persons did recover somewhat in the first half of 2004, but then fell back, erasing those earlier increases. Thus, the Japanese economy, which had looked promising several months ago, has sagged anew, with prospects clouded for any renewal of more vigorous performance.

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<th scope="col" class="firstcol">% Changes</th>
<th scope="col">Q4 2004*</th>
<th scope="col">Q3 2004*</th>
<th scope="col">Year/Year</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">GDP</td>
<td>-0.1</td>
<td>-0.3</td>
<td>3.4</td>
<td>2.6</td>
<td>1.4</td>
<td>-0.3</td>
</tr>
<tr>
<td class="firstcol">Final Consumption: Households</td>
<td>-0.3</td>
<td>-0.2</td>
<td>0.2</td>
<td>1.5</td>
<td>0.2</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Government</td>
<td>0.4</td>
<td>0.3</td>
<td>2.6</td>
<td>2.6</td>
<td>1.2</td>
<td>2.6</td>
</tr>
<tr>
<td class="firstcol">Gross Fixed Capital Formation</td>
<td>0.5</td>
<td>0.0</td>
<td>-0.6</td>
<td>1.8</td>
<td>0.9</td>
<td>-5.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports</td>
<td>1.3</td>
<td>0.6</td>
<td>3.9</td>
<td>14.3</td>
<td>9.1</td>
<td>7.3</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>3.1</td>
<td>2.4</td>
<td>6.6</td>
<td>9.2</td>
<td>3.8</td>
<td>1.3</td>
</tr>
</tbody>
</table>
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Japanese GDP, reported for Q4 today in Tokyo, badly disappointed. It fell 0.1% (0.5% annualized), compared with a 0.7% increase expected by market forecasters. Thus, after a 1.4% gain in Q1, GDP has now fallen three consecutive [...]

Japan Economy in Renewed Slump as GDP Falls in Q4

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216b.jpg" width="353">
Industrial production was unchanged last month versus Consensus expectations for a 0.3% increase. The shortfall was entirely due to a 3.1% decline in utility output as well as a 0.3% drop in mining output.
The factory sector again performed well and output rose 0.5% (5.3% y/y) following a downwardly revised 0.4% gain in December.
High tech sector output increased 1.5% (18.1% y/y) as output of communications equipment rose 3.0% (13.8% y/y). Semiconductor &amp; related equipment output rose 0.9% (26.5% y/y) and computer &amp; peripheral output also gained 0.9% (6.0% y/y).
Factory output excluding high tech rose 0.4% in December (4.4% y/y). A 1.2% decline in clothing output (-5.0% y/y) was offset by a 1.6% rise (9.5% y/y) in machinery output. Nondurables output also rose as did output of metals. Production of appliances, furniture &amp; carpeting fell 1.1% (-0.4% y/y) as furniture output fell 0.5% (+1.3% y/y).
Motor vehicle output fell 2.0% (+0.2% y/y) in January. Excluding motor vehicles, factory output rose 0.7% (5.7% y/y). Excluding both high tech and motor vehicles factory output rose 0.6% (4.8% y/y).
Total capacity utilization fell slightly to 79.0%. Capacity grew 1.2% y/y.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</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">Industrial Production</td>
<td>0.0%</td>
<td>0.7%</td>
<td>4.0%</td>
<td>4.1%</td>
<td>-0.0%</td>
<td>-0.3%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>79.0%</td>
<td>79.1%</td>
<td>76.9% (01/04)</td>
<td>78.0%</td>
<td>75.5%</td>
<td>75.3%</td>
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</tbody>
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</body>
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Industrial production was unchanged last month versus Consensus expectations for a 0.3% increase. The shortfall was entirely due to a 3.1% decline in utility output as well as a 0.3% drop in mining output. The factory sector again [...]

Warm Weather Left Industrial Production Unchanged

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216d.jpg" width="353">
Mortgage applications dipped modestly last week following two weeks of gain according to the Mortgage Bankers Association (MBA) Survey. The 0.5% w/w decline followed gains of 4.2% and 7.3% during the prior two weeks.
The decline was due to a 4.8% drop in purchase applications. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance rose another 4.1% following two weeks of gain but versus last year still are down 23.3%.
The effective interest rate on a conventional 30-year mortgage ticked higher to 5.75% but remained below the 5.89% averaged last month. The effective rate on a 15-year mortgage also rose to 5.41% last week.
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>.

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<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">02/11/05</th>
<th scope="col">02/04/05</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>732.3</td>
<td>735.9</td>
<td>-12.5%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>423.3</td>
<td>444.6</td>
<td>2.3%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,530.1</td>
<td>2,430.7</td>
<td>-23.3%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Mortgage applications dipped modestly last week following two weeks of gain according to the Mortgage Bankers Association (MBA) Survey. The 0.5% w/w decline followed gains of 4.2% and 7.3% during the prior two weeks. The decline was [...]

Mortgage Applications Dipped

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216c.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) Composite Housing Market Index fell again in February to 68 versus 70 in January.
Only the current sales of new single family homes component fell. The index components of prospective sales and the traffic of prospective buyers were stable.
During the last twenty years, annual changes in the composite index had an 83% correlation with the change in new home sales. There&#39;s been an 86% correlation with the change in single family housing starts.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
Visit the National Association of Home Builders using this <a href="http://www.nahb.org">link</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Feb &#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>68</td>
<td>70</td>
<td>66</td>
<td>68</td>
<td>64</td>
<td>61</td>
</tr>
</tbody>
</table>
</body>
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The National Association of Home Builders' (NAHB) Composite Housing Market Index fell again in February to 68 versus 70 in January. Only the current sales of new single family homes component fell. The index components of prospective [...]

NAHB Housing Market Index Fell Again

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216a.jpg" width="353">
Housing starts unexpectedly rose 4.7% in January to a record high of 2.159M following an upwardly revised 14.4% jump in December.Consensus expectations had been for a decline to 1.93M starts.
Single-family starts rose a moderate 2.7% m/m to a record high of 1.760M. The increase, however, was limited to a 20.0% gain in starts in the South. In other regions of the country single family starts fell.
Multi family starts jumped 14.1% m/m but the gain was just about back to the October level.
Building permits rose 1.7% in January, again mostly reflecting strength in single family permits in the South.
Today&#39;s testimony by Federal Reserve Board Chairman Alan Greenspan is available <a href="http://www.federalreserve.gov/boarddocs/hh/2005/february/testimony.htm"> here</a>.
Wicksell&#39;s Natural Rate from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20050301/cover.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">Jan</th>
<th scope="col">Dec</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>2,159</td>
<td>2,063</td>
<td>11.6%</td>
<td>1,952</td>
<td>1,853</td>
<td>1,710</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-family</td>
<td>1,760</td>
<td>1,713</td>
<td>12.5%</td>
<td>1,605</td>
<td>1,505</td>
<td>1,363</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-family</td>
<td>399</td>
<td>350</td>
<td>8.1%</td>
<td>348</td>
<td>348</td>
<td>347</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>2,105</td>
<td>2,069</td>
<td>6.8%</td>
<td>2,035</td>
<td>1,889</td>
<td>1,749</td>
</tr>
</tbody>
</table>
</body>
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Housing starts unexpectedly rose 4.7% in January to a record high of 2.159M following an upwardly revised 14.4% jump in December.Consensus expectations had been for a decline to 1.93M starts. Single-family starts rose a moderate 2.7% [...]

Housing Starts At A New High in January

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216a.jpg" width="353">
Housing starts unexpectedly rose 4.7% in January to a record high of 2.159M following an upwardly revised 14.4% jump in December.Consensus expectations had been for a decline to 1.93M starts.
Single-family starts rose a moderate 2.7% m/m to a record high of 1.760M. The increase, however, was limited to a 20.0% gain in starts in the South. In other regions of the country single family starts fell.
Multi family starts jumped 14.1% m/m but the gain was just about back to the October level.
Building permits rose 1.7% in January, again mostly reflecting strength in single family permits in the South.
Today&#39;s testimony by Federal Reserve Board Chairman Alan Greenspan is available <a href="http://www.federalreserve.gov/boarddocs/hh/2005/february/testimony.htm"> here</a>.
Wicksell&#39;s Natural Rate from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/mt/20050301/cover.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">Jan</th>
<th scope="col">Dec</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>2,159</td>
<td>2,063</td>
<td>11.6%</td>
<td>1,952</td>
<td>1,853</td>
<td>1,710</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-family</td>
<td>1,760</td>
<td>1,713</td>
<td>12.5%</td>
<td>1,605</td>
<td>1,505</td>
<td>1,363</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-family</td>
<td>399</td>
<td>350</td>
<td>8.1%</td>
<td>348</td>
<td>348</td>
<td>347</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>2,105</td>
<td>2,069</td>
<td>6.8%</td>
<td>2,035</td>
<td>1,889</td>
<td>1,749</td>
</tr>
</tbody>
</table>
NAHB Housing Market Index Fell Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216c.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) Composite Housing Market Index fell again in February to 68 versus 70 in January.
Only the current sales of new single family homes component fell. The index components of prospective sales and the traffic of prospective buyers were stable.
During the last twenty years, annual changes in the composite index had an 83% correlation with the change in new home sales. There&#39;s been an 86% correlation with the change in single family housing starts.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
Visit the National Association of Home Builders using this <a href="http://www.nahb.org">link</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</th>
<th scope="col">Feb &#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>68</td>
<td>70</td>
<td>66</td>
<td>68</td>
<td>64</td>
<td>61</td>
</tr>
</tbody>
</table>
Mortgage Applications Dipped 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216d.jpg" width="353">
Mortgage applications dipped modestly last week following two weeks of gain according to the Mortgage Bankers Association (MBA) Survey. The 0.5% w/w decline followed gains of 4.2% and 7.3% during the prior two weeks.
The decline was due to a 4.8% drop in purchase applications. During the last ten years there has been a 59% correlation between the y/y change in purchase applications and the change in new plus existing home sales.
Applications to refinance rose another 4.1% following two weeks of gain but versus last year still are down 23.3%.
The effective interest rate on a conventional 30-year mortgage ticked higher to 5.75% but remained below the 5.89% averaged last month. The effective rate on a 15-year mortgage also rose to 5.41% last week.
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>.

<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">02/11/05</th>
<th scope="col">02/04/05</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>732.3</td>
<td>735.9</td>
<td>-12.5%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>423.3</td>
<td>444.6</td>
<td>2.3%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,530.1</td>
<td>2,430.7</td>
<td>-23.3%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
Warm Weather Left Industrial Production Unchanged 
by <a href="/comment/Moeller.html">Tom Moeller</a> February 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050216b.jpg" width="353">
Industrial production was unchanged last month versus Consensus expectations for a 0.3% increase. The shortfall was entirely due to a 3.1% decline in utility output as well as a 0.3% drop in mining output.
The factory sector again performed well and output rose 0.5% (5.3% y/y) following a downwardly revised 0.4% gain in December.
High tech sector output increased 1.5% (18.1% y/y) as output of communications equipment rose 3.0% (13.8% y/y). Semiconductor &amp; related equipment output rose 0.9% (26.5% y/y) and computer &amp; peripheral output also gained 0.9% (6.0% y/y).
Factory output excluding high tech rose 0.4% in December (4.4% y/y). A 1.2% decline in clothing output (-5.0% y/y) was offset by a 1.6% rise (9.5% y/y) in machinery output. Nondurables output also rose as did output of metals. Production of appliances, furniture &amp; carpeting fell 1.1% (-0.4% y/y) as furniture output fell 0.5% (+1.3% y/y).
Motor vehicle output fell 2.0% (+0.2% y/y) in January. Excluding motor vehicles, factory output rose 0.7% (5.7% y/y). Excluding both high tech and motor vehicles factory output rose 0.6% (4.8% y/y).
Total capacity utilization fell slightly to 79.0%. Capacity grew 1.2% y/y.

<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">Jan</th>
<th scope="col">Dec</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">Industrial Production</td>
<td>0.0%</td>
<td>0.7%</td>
<td>4.0%</td>
<td>4.1%</td>
<td>-0.0%</td>
<td>-0.3%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>79.0%</td>
<td>79.1%</td>
<td>76.9% (01/04)</td>
<td>78.0%</td>
<td>75.5%</td>
<td>75.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

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.

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Charts of the Week: Tariff Truce, Tenuous Trust

250501F20.jpg

250501G20.jpg

U.S. light vehicle sales dropped 2.9% (+6.5% y/y) to 17.31 million units (SAAR) in April after surging 10.8% to 17.82 million units in March. The retreat in April vehicle sales accompanied a 1.7% y/y rise in real disposable income through March, which compared to 2.0% growth last year.

Sales declines were broad-based last month. Light truck sales fell 1.3% (+9.9% y/y) during April to 14.34 million units (SAAR), after rising 12.4% in March. Purchases of domestically-made light trucks declined 1.2% (+11.9% y/y) to 11.02 million units, after jumping 12.5% in March. Sales of imported light trucks fell 1.8% (+4.4% y/y) to 3.32 million units, following an 11.6% March surge.

Trucks’ record 82.8% share of the light vehicle market last month compared to 81.5% in March and 80.3% in April of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales also declined last month, down 9.5% (-7.5%) to 2.97 million units (SAAR) following a 3.5% March rise. The decline reversed all of the increase over the prior two months. Purchases of domestically-produced cars fell 9.8% (-4.3% y/y) last month to 2.22 million units, after rising 3.8% in March. Sales of imported autos declined 9.6% (-15.7% y/y) to 0.75 million units, following a 2.5% March increase.

Imports' 23.5% share of the U.S. light vehicle market was little changed from 23.6% in March and compared to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market held steady at 25.3% last month and compared to 27.7% in April of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.2% last month after falling to 23.3% in March.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the I**NDUSTRY** database.

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- Light truck sales pull back, while auto sales tumble.
- Both domestic and imported sales decline.
- Imports' market share slips further.

U.S. Light Vehicle Sales Fall in April

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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%.

Economy in Brief: February 2005

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Leading Indicators Backpedaled

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