Tom Moeller

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416b.jpg" style="width: 312px; height: 265px;">
Improved weather last month helped housing starts rise 1.6%
from February to 626,000 units (AR). Also good news from the housing
sector was that snowstorms didn't depress activity by 5.9% from January
as previously reported but instead February starts rose modestly.
Consensus expectations had been for 610,000 starts in March.
Starts of multi-family housing units accounted for the
increase in March activity. Moreover, the upward revision to February
to a lesser decline from January was behind much of the revision.
Starts of apartments, condominiums &amp; town houses recovered most
of the February decline with an 18.8% increase but they still were down
40.6% from last March. Regardless, the q/q increase in starts was the
first of this cycle.
Despite their 0.9% m/m decline from February, starts of
single-family homes also showed improvement. The decline was from an
upwardly revised February level. It now shows an increase from January
instead of the sharp decline reported earlier. Starts rose 48.7% from
the recession low during February 2009. Single-family starts in the
Northeast rose 5.6% during March and were more-than-double the January
'09 low. In the Midwest, single-family starts fell by one-third from
February (+19.0% y/y) and reversed all of the February gain. Though
starts rose from their January '09 low ,they remained down
three-quarters from the 2005 high. Starts in the South rose 9.9% (47.7%
y/y) and in the West they rose 0.9% (82.8% y/y).
During March, building permits rose 7.5% following a 2.4%
February increase. Permits to build a single-family home rose 5.6% and
were up 58.8% from the low in January '09. Permits to build
multi-family homes rose 15.4% and were 40.6% higher than their low last
July.
The housing starts figures can be found in Haver's USECON
database.
Coordination of Expectations in the Recent
Crisis: Private Actions and Policy Responses from the
Federal Reserve Bank of Kansas City is available <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/10q1CooperWillis.pdf">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416d.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Housing
Starts (000s, SAAR)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>626</td>
<td>616</td>
<td>609</td>
<td>20.2%</td>
<td>553</td>
<td>900</td>
<td>1,342</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>531</td>
<td>536</td>
<td>507</td>
<td>47.1</td>
<td>440</td>
<td>616</td>
<td>1,036</td>
</tr>
<tr>
<td class="firstcol">Multi-Family</td>
<td>95</td>
<td>80</td>
<td>102</td>
<td>-40.6</td>
<td>113</td>
<td>285</td>
<td>306</td>
</tr>
<tr class="odd">
<td class="firstcol">Building Permits</td>
<td>685</td>
<td>637</td>
<td>622</td>
<td>34.1</td>
<td>558</td>
<td>895</td>
<td>1,392</td>
</tr>
</tbody>
</table>
</body></html>

Improved weather last month helped housing starts rise 1.6% from February to 626,000 units (AR). Also good news from the housing sector was that snowstorms didn't depress activity by 5.9% from January as previously reported but [...]

U.S. Housing Starts Improve With Better Weather

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416b.jpg" style="width: 312px; height: 265px;">
Improved weather last month helped housing starts rise 1.6%
from February to 626,000 units (AR). Also good news from the housing
sector was that snowstorms didn't depress activity by 5.9% from January
as previously reported but instead February starts rose modestly.
Consensus expectations had been for 610,000 starts in March.
Starts of multi-family housing units accounted for the
increase in March activity. Moreover, the upward revision to February
to a lesser decline from January was behind much of the revision.
Starts of apartments, condominiums &amp; town houses recovered most
of the February decline with an 18.8% increase but they still were down
40.6% from last March. Regardless, the q/q increase in starts was the
first of this cycle.
Despite their 0.9% m/m decline from February, starts of
single-family homes also showed improvement. The decline was from an
upwardly revised February level. It now shows an increase from January
instead of the sharp decline reported earlier. Starts rose 48.7% from
the recession low during February 2009. Single-family starts in the
Northeast rose 5.6% during March and were more-than-double the January
'09 low. In the Midwest, single-family starts fell by one-third from
February (+19.0% y/y) and reversed all of the February gain. Though
starts rose from their January '09 low ,they remained down
three-quarters from the 2005 high. Starts in the South rose 9.9% (47.7%
y/y) and in the West they rose 0.9% (82.8% y/y).
During March, building permits rose 7.5% following a 2.4%
February increase. Permits to build a single-family home rose 5.6% and
were up 58.8% from the low in January '09. Permits to build
multi-family homes rose 15.4% and were 40.6% higher than their low last
July.
The housing starts figures can be found in Haver's USECON
database.
Coordination of Expectations in the Recent
Crisis: Private Actions and Policy Responses from the
Federal Reserve Bank of Kansas City is available <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/10q1CooperWillis.pdf">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416d.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Housing
Starts (000s, SAAR)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>626</td>
<td>616</td>
<td>609</td>
<td>20.2%</td>
<td>553</td>
<td>900</td>
<td>1,342</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>531</td>
<td>536</td>
<td>507</td>
<td>47.1</td>
<td>440</td>
<td>616</td>
<td>1,036</td>
</tr>
<tr>
<td class="firstcol">Multi-Family</td>
<td>95</td>
<td>80</td>
<td>102</td>
<td>-40.6</td>
<td>113</td>
<td>285</td>
<td>306</td>
</tr>
<tr class="odd">
<td class="firstcol">Building Permits</td>
<td>685</td>
<td>637</td>
<td>622</td>
<td>34.1</td>
<td>558</td>
<td>895</td>
<td>1,392</td>
</tr>
</tbody>
</table>
Empire State Business Conditions
Show Further Gain 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 16, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Forward momentum is building behind business conditions in the
Northeast region of the country. The Federal Reserve Bank of New York
reported that its April Empire State Factory Index of General Business
Conditions rose to its highest level in six months. As a result it was
near the highest since 2004. At 31.86, the diffusion index was up from
its recession low of -32.29 in March 2009. The latest level suggests
positive growth in factory sector activity and it beat Consensus
expectations for a reading of 24.0.
The figure is a diffusion index. Since the series' inception
in 2001, there has been a 74% correlation between its level and the
three-month change in U.S. factory sector production. Like the
Philadelphia Fed Index of General Business Conditions, the Empire State
Business Conditions Index reflects answers to independent survey
questions; it is not a weighted combination of the components. The
series dates back only to 2001.
Amongst the separate survey questions, shipments and
inventories rose strongly. Also strong was the employment index which
rose to 20.25, near its highest since 2004 There has been an 87%
correlation between the employment index and the three-month growth in
factory sector employment as reported by the Labor Department.
The prices paid index rose m/m to 41.77, its highest since
September 2008. Since inception there has been a 76% correlation
between the index of prices paid and the three-month change in the core
intermediate materials PPI.
The Empire State index of expected business
conditions in six months held steady m/m and was near the
highest since early-2004. The capital expenditure and technology
spending series both remained near the highest levels since the
recession began.
The Empire State Manufacturing Survey is a monthly survey of
manufacturers in New York State. Participants from across the state in
a variety of industries respond to a questionnaire and report the
change in indicators from the previous month. Each index is seasonally
adjusted. Respondents also state the likely direction of these same
indicators six months ahead. For more on the Empire State
Manufacturing Survey, including methodologies and the latest report,
click <a href="http://www.newyorkfed.org/survey/empire/empiresurvey_overview.html">here</a>.
The Empire State data is available in Haver's SURVEYS
database.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S511/@S511.HTM">Empire
State
Manufacturing Survey</a></th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">April '09&nbsp;</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">General Business Conditions
(diffusion index, %)&nbsp;&nbsp;</td>
<td>31.86</td>
<td>22.86</td>
<td>24.91</td>
<td>-14.59</td>
<td>-2.76</td>
<td>-9.97</td>
<td>17.22</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; New Orders</td>
<td>29.49</td>
<td>25.43</td>
<td>8.78</td>
<td>-3.99</td>
<td>-2.52</td>
<td>-6.22</td>
<td>15.70</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Inventories</td>
<td>11.39</td>
<td>4.94</td>
<td>0.00</td>
<td>-35.96</td>
<td>-22.89</td>
<td>-7.87</td>
<td>-3.95</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Employment</td>
<td>20.25</td>
<td>12.35</td>
<td>5.56</td>
<td>-28.09</td>
<td>-17.28</td>
<td>-5.36</td>
<td>11.28</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid</td>
<td>41.77</td>
<td>29.63</td>
<td>31.94</td>
<td>-14.61</td>
<td>1.33</td>
<td>46.99</td>
<td>35.64</td>
</tr>
</tbody>
</table>
Michigan Consumer Sentiment
Deteriorates With View Of Gov't Policy 
by <a href="/comment/Moeller.html">Tom
Moeller</a> 


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416h.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Despite the economy's recent improvement, it has yet to
translate into a sustained rise in consumer sentiment. The University
of Michigan reported that its mid-April index of consumer sentiment
fell to 69.5 from 73.6 and was at its lowest level since November. The
figure fell well short of Consensus expectations for a reading of 75.0.
Nevertheless, sentiment remained up considerably from the low late in
2008. During the last ten years there has been a 90% correlation
between the level of sentiment and the y/y change in real consumer
spending.
Respondents' view of government policy, which may influence
economic expectations, fell to its lowest level since January of last
year. Just 11 percent of respondents thought that a good job was being
done by government versus 45% who thought a poor job was being done,
the highest since January '09.
The index of expected economic conditions fell 8.2% m/m to the
lowest level since March of last year. The decline was led by a 9.8%
decline in expectations for business conditions during the next five
years to their lowest since July. Expectations for conditions during
the next year fell 9.0% to their lowest since November. Perhaps more
troubling was the 8.0% m/m decline in expectations for personal
finances to the lowest level since February 2009.
The good news was that sentiment about current economic
conditions fell a lesser 2.1% last month and remained near its cycle
high. The assessment of current personal finances fell 2.6% and also
remained near the cycle high and buying conditions for large household
goods including furniture, refrigerators, stoves &amp; televisions
also fell just moderately.
Expected price inflation during the next year rose further to
3.8% and was up from the December 2008 reading of 1.7%.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416i.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100416j.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">Mid-April</th>
<th scope="col">March</th>
<th scope="col">&nbsp;February</th>
<th scope="col">April y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>69.5</td>
<td>73.6</td>
<td>73.6</td>
<td>6.8%</td>
<td>66.3</td>
<td>63.8</td>
<td>85.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>80.7</td>
<td>82.4</td>
<td>81.8</td>
<td>18.2</td>
<td>69.6</td>
<td>73.7</td>
<td>101.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>62.3</td>
<td>67.9</td>
<td>68.4</td>
<td>-1.3</td>
<td>64.1</td>
<td>57.3</td>
<td>75.6</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Housing Starts Improve WithBetter Weather

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100415k.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
According to the Nationwide Building Society&#8217;s measure, U.K.
consumer confidence fell in March by the most since July 2008 as the
election due within weeks fueled Britons&#8217; doubts about the economy.
Small surprise that is: so much for politicians shoring up a feeling of
hope and security. Increasingly elections are about making the opponent
seem worse than you are. The consumer confidence polls seem to have
picked up on this, with the obvious consequences. The index of
sentiment fell 9 points from February to 72, erasing the gains in
confidence seen so far this year. A gauge measuring expectations for
the economy in the next six months fell 11 points to 105.This fall
disappointed as the market consensus level was a reading of 81.
We contrast this result with the GfK survey above. It seems to
show less of hit from the electioneering effect but it does demonstrate
some backsliding in the assessment of the economy; plenty of raw nerves
here for the politicians to tap into. The household financial situation
eroded in March as did people&#8217;s assessment of their savings. Both lower
and higher income respondents saw a worsening.
Looking ahead, fears of unemployment have been rising. The
general economic situation is seen as poorer and households expect
their financial situation to deteriorate further. There are increased
concerns about savings adequacy and growing concerns about inflation.
With this as a back-drop there is plenty of fodder for
election politicking to push all the consumers&#8217; buttons. This appears
to be in train. Still consumer confidence in the GfK measure is in the
92nd percentile of its two-year range showing considerable progress has
been made, but that compares to a standing of just 60% in its 10_year
range which emphasizes a bit more how far there is to go. Clearly the
UK consumer remains challenged and will find his and her senses
assaulted in this election season. May the least worse man win.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"> GFK
Consumer Survey</th>
</tr>
</thead>
<tbody>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>% of 2Yr 
Range</td>
<td>% of 10Yr 
Range</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Consumer Confidence</td>
<td>-15</td>
<td>-14</td>
<td>-17</td>
<td>-19</td>
<td>92.3%</td>
<td>60.0%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Current</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Household Fin Sit</td>
<td>18</td>
<td>18</td>
<td>17</td>
<td>15</td>
<td>40.0%</td>
<td>36.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Major
Purchases</td>
<td>-17</td>
<td>-16</td>
<td>-16</td>
<td>-16</td>
<td>83.9%</td>
<td>43.3%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Last 12
Months</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Household Fin Sit</td>
<td>-15</td>
<td>-13</td>
<td>-14</td>
<td>-14</td>
<td>22.7%</td>
<td>20.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; General
Econ Sit</td>
<td>-49</td>
<td>-50</td>
<td>-57</td>
<td>-61</td>
<td>71.7%</td>
<td>47.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; CPI</td>
<td>72</td>
<td>63</td>
<td>61</td>
<td>58</td>
<td>26.9%</td>
<td>40.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Savings</td>
<td>-13</td>
<td>-6</td>
<td>-2</td>
<td>-8</td>
<td>21.8%</td>
<td>17.9%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Next
12-Months</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Household Fin Sit</td>
<td>4</td>
<td>6</td>
<td>4</td>
<td>3</td>
<td>88.0%</td>
<td>68.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; General
Econ Sit</td>
<td>0</td>
<td>4</td>
<td>-2</td>
<td>-6</td>
<td>92.9%</td>
<td>92.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Unemployment</td>
<td>36</td>
<td>31</td>
<td>37</td>
<td>45</td>
<td>14.9%</td>
<td>34.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Major
Purchases</td>
<td>-28</td>
<td>-31</td>
<td>-29</td>
<td>-30</td>
<td>57.1%</td>
<td>48.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Savings</td>
<td>5</td>
<td>7</td>
<td>8</td>
<td>4</td>
<td>38.1%</td>
<td>30.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; CPI</td>
<td>63</td>
<td>60</td>
<td>62</td>
<td>60</td>
<td>45.1%</td>
<td>45.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">By Income</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Lower</td>
<td>-21</td>
<td>-18</td>
<td>-26</td>
<td>-26</td>
<td>85.7%</td>
<td>55.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Upper</td>
<td>-5</td>
<td>-3</td>
<td>-5</td>
<td>-7</td>
<td>93.1%</td>
<td>71.1%</td>
</tr>
</tbody>
</table>
</body></html>

According to the Nationwide Building Society’s measure, U.K. consumer confidence fell in March by the most since July 2008 as the election due within weeks fueled Britons’ doubts about the economy. Small surprise that is: so much for [...]

UK Consumer Confidence Is Challenged By Electioneering

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100415h.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
They weren't expected to move up, but they did anyway.
According to the Bureau of Labor Statistics, initial claims for jobless
insurance increased by 24,000 last week to 484,000, the highest level
in seven weeks. The gain followed an 18,000 increase. A decline had
been expected because of volatility associated with the closure of
offices on Good Friday. The good news is that the latest level is down
from the recession peak of 651,000 reached in March of 2009. Last
week's level exceeded Consensus expectations for 440,000 new claims and
the four-week moving average of initial claims rose slightly to
457,750, its highest in one month.
A 73,000 increase in continuing claims for unemployment
insurance during the latest week reversed most of the prior week's
decline. Still, they were down by one-third since the late-June peak.
The overall decline is a function of the improved job market but also
reflects the exhaustion of 26 weeks of unemployment benefits.
Continuing claims provide an indication of workers' ability to find
employment. The four-week average of continuing claims also fell to a
cycle low of 4.639 mil. This series dates back to 1966.
Extended benefits for unemployment insurance fell 99,716 to a
new low of 114,711. The decline more-than reversed the prior week's
increase and they were down by more than three-quarters from a peak of
597,688 reached in November.Each state administers a separate
unemployment insurance program within guidelines established by Federal
law. Benefit amounts and the length of time benefits are received are
determined by state law. For example, in Michigan and New York, an
additional 73 weeks of benefits are available while in California an
additional 79 weeks are available.
The insured unemployment rate nudged up to 3.6%. The rate
reached a high of 4.9% during May. During the last ten years, there has
been a 96% correlation between the level of the insured unemployment
rate and the overall rate of unemployment published by the Bureau of
Labor Statistics.
The highest insured unemployment rates in the week ending
March 27 were in Alaska (6.8 percent), Oregon (6.0), Puerto Rico (5.9),
Pennsylvania (5.6), Wisconsin (5.5), Michigan (5.4), Montana (5.3),
Idaho (5.2), Nevada (5.2), California (4.8), North Carolina (4.8), and
Rhode Island (4.8). The lowest insured unemployment rates were in
Virginia (1.9), Texas (2.2), Georgia (2.8), Florida (3.1), Wyoming
(3.3), Maryland (3.4), Ohio (3.4), New York (3.7) and Maine (4.1).
These data are not seasonally adjusted but the overall insured
unemployment rate is.
The unemployment insurance claims data is available in Haver's
WEEKLY database and the state data is in the REGIONW
database.
The Fed's latest Beige Book covering
regional economic conditions is available <a href="http://www.federalreserve.gov/fomc/beigebook/2010/20100414/default.htm">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100415i.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100415j.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM" style="color: black;">Unemployment Insurance (000s)</a></th>
<th scope="col">04/10/10</th>
<th scope="col">04/03/10</th>
<th scope="col">03/27/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>484</td>
<td>460</td>
<td>442</td>
<td>-20.5%</td>
<td>572</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,639</td>
<td>4,566</td>
<td>-22.6%</td>
<td>5,809</td>
<td>3,340</td>
<td>2,549</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.6</td>
<td>3.5</td>
<td>4.6 (4/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

They weren't expected to move up, but they did anyway. According to the Bureau of Labor Statistics, initial claims for jobless insurance increased by 24,000 last week to 484,000, the highest level in seven weeks. The gain followed an [...]

U.S. Claims For Jobless Insurance Increase, Again

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left" height="265">
Forward momentum is building behind consumer spending. March
retail sales rose 1.6%; triple the upwardly revised readings of the
prior two months and stronger than the 1.2% increase that had been
expected. On a three-month basis sales rose at an 11.0% annual rate.
Nonauto sales rose 0.6% but the February increase also was revised up
to 1.0% after an upwardly revised 0.6% January increase. The latest
gain was near expectations. On a three-month basis the gain in nonauto
sales remained strong at 9.3% (AR). These numbers were, of course,
helped by moderation in gasoline prices. Nonauto retail sales less
gasoline, a better measure of "core" spending, grew 0.7% last month and
at a 10.2% annual rate during the last three, the strongest since
January 2006.
"Core" discretionary spending improved. Apparel store sales
rose 2.3% during March and at a 22.1% annual rate during the last three
months. General merchandise store sales also rose a firm 0.6% and at a
11.9% three-month rate. Sales at furniture, home furnishings &amp;
electronics stores lagged these gains last month. They were unchanged
but were up at a 9.8% annual rate over the last three months. That's
improved from the 9.6% decline during all of last year. Furniture sales
alone have been rising at a 14.5% rate while sales of electronics
&amp; appliances have been rising at a 15.4% rate.
Mirroring the improvement in unit sales, motor vehicle sales
improved considerably by 6.6% last month and at a 19.8% rate during the
last three. Finally, growth in sales at gasoline service stations fell
0.4% and rose at just a 2.7% rate during the last three months.
Earlier strength in internet &amp; catalogue sales
continued to ease. Sales ticked up just 0.2% and the three-month rate
of gain backed off to 7.3%, one third the growth earlier this year.
The retail sales data are available in Haver's USECON
database

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Total Retail Sales &amp; Food
Services</a> (%)</td>
<td>1.6</td>
<td>0.5</td>
<td>0.5</td>
<td>7.6</td>
<td>-6.0</td>
<td>-0.8</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding
Autos</td>
<td>0.6</td>
<td>1.0</td>
<td>0.6</td>
<td>6.4</td>
<td>-4.8</td>
<td>2.4</td>
<td>3.9</td>
</tr>
<tr class="odd">
<td class="firstcol">
Non-Auto Less Gasoline</td>
<td>0.7</td>
<td>1.1</td>
<td>0.6</td>
<td>4.2</td>
<td>-1.9</td>
<td>1.6</td>
<td>3.6</td>
</tr>
</tbody>
</table>
</body></html>

Forward momentum is building behind consumer spending. March retail sales rose 1.6%; triple the upwardly revised readings of the prior two months and stronger than the 1.2% increase that had been expected. On a three-month basis sales [...]

U.S. Retail Sales Strengthen; Core Sales Strongest Since 2006

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Even with that strong-seeming chart and rock solid 0.9% gain
in February, manufacturing IP in the Zone remains some 14% below it
past cycle peak. But eh current progress looks good as growth over
3-and 6-months have average a pace of 19%. The consumer sector
continues to lag with a three-month growth rate of 2.2%.
Among large Euro-Area member countries Spain grew the
strongest in Feb, but it is a volatile report from Spain that fell by
3.4% in January, undercutting the impact of the gain in February. The
UK, an EU member, had the next strongest gain among large European
economies at 1.3% but that was a recoup from a -0.9% result in January.
Italy with a 0.2% rise on the heels of a 1.7% gain has the best
two-month result followed by Germany at 0.2% and 0.6%, in Feb and Jan,
respectively. Still, both Germany and Spain show IP contractions over
three-months. Spain&#8217;s output is still falling over 12-months but over
12-months German IP is up by 7.1%., followed by France at 3.3% Italy at
3% and the UK at 1.5%.
The February gains were on the back of a spike in intermediate
goods output which advanced by 1.5%. Capital goods output rose by 0.9%.
The consumer categories receded. Europe needs to get its consumer in
gear. Europe, like many countries is trying to let its export sector
pull it out of its recessionary hole almost all by itself. This is
imbalanced growth that leans heavily on demand with origins elsewhere.
Europe needs to learn to stand on its own two feet.

<table border="0" cellspacing="0" width="100%">
<colgroup><col></colgroup>
<thead><tr>
<th colspan="111" scope="col"> Euro-Area
MFG IP</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td></td>
</tr>
<tr class="even">
<td class="firstcol">Euro-Area Detail</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;MFG</td>
<td>0.9%</td>
<td>1.3%</td>
<td>0.3%</td>
<td>10.6%</td>
<td>12.6%</td>
<td>10.1%</td>
<td>9.0%</td>
<td>4.2%</td>
<td>0.9%</td>
<td>12.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer</td>
<td>-0.3%</td>
<td>0.5%</td>
<td>0.3%</td>
<td>2.2%</td>
<td>9.1%</td>
<td>1.2%</td>
<td>2.2%</td>
<td>1.1%</td>
<td>-0.1%</td>
<td>5.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">
C-Durables</td>
<td>-0.6%</td>
<td>2.6%</td>
<td>-1.5%</td>
<td>1.4%</td>
<td>12.2%</td>
<td>7.3%</td>
<td>10.5%</td>
<td>-0.3%</td>
<td>-2.5%</td>
<td>&nbsp;&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">
C-Non-durables</td>
<td>-0.2%</td>
<td>0.3%</td>
<td>0.6%</td>
<td>2.8%</td>
<td>7.5%</td>
<td>3.1%</td>
<td>1.3%</td>
<td>1.5%</td>
<td>0.6%</td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate</td>
<td>1.5%</td>
<td>0.8%</td>
<td>-1.1%</td>
<td>4.6%</td>
<td>1.8%</td>
<td>-4.2%</td>
<td>6.2%</td>
<td>6.9%</td>
<td>3.6%</td>
<td>5.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital</td>
<td>0.9%</td>
<td>-1.1%</td>
<td>0.0%</td>
<td>-0.7%</td>
<td>1.5%</td>
<td>4.5%</td>
<td>5.9%</td>
<td>3.1%</td>
<td>-0.8%</td>
<td>-0.7%</td>
</tr>
<tr>
<td colspan="11" class="firstcol">Main
Euro-Area
Countries and UK IP in MFG</td>
</tr>
<tr class="even">
<td class="firstcol"></td>
<td colspan="3">Mo/Mo</td>
<td>Feb10</td>
<td>Jan10</td>
<td>Feb10</td>
<td>Jan10</td>
<td>Feb10</td>
<td>Jan10</td>
<td>&nbsp;</td>
</tr>
<tr class="even">
<td class="firstcol">MFG Only</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q:4 
Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany:</td>
<td>0.2%</td>
<td>0.6%</td>
<td>-1.3%</td>
<td>-2.1%</td>
<td>1.3%</td>
<td>4.5%</td>
<td>8.7%</td>
<td>7.1%</td>
<td>3.2%</td>
<td>-3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">France: 
IPxConstruct'n</td>
<td>0.0%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>3.2%</td>
<td>6.9%</td>
<td>0.7%</td>
<td>5.3%</td>
<td>3.3%</td>
<td>2.6%</td>
<td>4.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>0.2%</td>
<td>1.7%</td>
<td>-0.6%</td>
<td>5.3%</td>
<td>6.8%</td>
<td>7.6%</td>
<td>3.8%</td>
<td>3.0%</td>
<td>-0.6%</td>
<td>5.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>1.6%</td>
<td>-3.4%</td>
<td>-0.6%</td>
<td>-9.3%</td>
<td>-15.4%</td>
<td>-11.9%</td>
<td>-7.3%</td>
<td>-2.1%</td>
<td>-2.0%</td>
<td>-9.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK: EU
member</td>
<td>1.3%</td>
<td>-0.9%</td>
<td>0.9%</td>
<td>5.5%</td>
<td>0.5%</td>
<td>6.3%</td>
<td>-0.7%</td>
<td>1.5%</td>
<td>0.1%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
</body></html>

Even with that strong-seeming chart and rock solid 0.9% gain in February, manufacturing IP in the Zone remains some 14% below it past cycle peak. But eh current progress looks good as growth over 3-and 6-months have average a pace of [...]

IP Rebound Screams Recovery

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Consumer price inflation remain subdued last month, according
to the U.S. Bureau of Labor Statistics. It reported that the CPI during
March rose all of 0.1% after having been unchanged during February.
That was enough to leave the change during the last three months at
0.9% (AR), its lowest since May of last year. The latest figure matched
Consensus expectations.
Core consumer prices also were weak. Goods
&amp; services together were unchanged while a 0.1% increase had
been expected. That pulled the three-month change to negative 0.1%
which was its lowest since January 2009. Core goods prices
fell 0.1% as they did in February. That was enough to pull the
three-month gain to a negative 0.1% versus the high of 5.4% last April.
New &amp; used motor vehicles prices posted a 0.2% increase (5.5%
y/y). Apparel prices began to fall slightly versus last year while
prices for household furnishings &amp; operation fell 2.3% y/y.
Core services prices again inched up 0.1%
(+0.9% y/y). Weakness in the housing market caused a 0.5% y/y decline
in shelter prices while owners equivalent rent of primary residences, a
measure not equivalent to other house price measures, slipped again
m/m. A slight y/y decline in this measure was the weakest reading since
the series' start in 1983. Elsewhere in services, prices have been
relatively strong. Public transportation prices rose 0.5% (6.1% y/y)
and medical care services prices gained another 0.3% (3.8% y/y).
Finally, education costs posted a strong 0.6% increase (4.9% y/y) but
recreation prices slipped for the seventh straight month (-1.1% y/y).
Energy prices slipped slightly again as
they reflected a 0.8% m/m decline in gasoline prices. Gas prices are
up, however, by 41.4% y/y. Fuel oil prices slipped 1.3% (+19.6% y/y)
but natural gas &amp; electricity prices rose a firm 1.4% (-1.8%
y/y).
Food &amp; beverage prices firmed a bit
by 0.2% but the y/y gain of 0.3% followed six months of price
deflation. A 0.4% decline in dairy prices was an improvement from the
10.4% decline last summer. Also showing less deflation were prices for
meats, poultry, fish &amp; eggs (-1.7% y/y) but cereal &amp;
bakery product prices continued weak (-1.1% y/y). Dairy product prices
also showed less deflation (-0.4% y/y) while fruit &amp; bakery
products rose 2.1% y/y. Finally, the cost of eating out rose just 1.2%,
a record low increase, while alcoholic beverage prices also rose just
1.1% y/y, the least since 1995.
The chained CPI, which adjusts for shifts in consumption
patterns improved last month and rose 2.5% year-to-year. Chained prices
less food &amp; energy gained 0.8% y/y.
The consumer price data is available in Haver's USECON
database while detailed figures can be found in the CPIDATA
database.
Has the behavior of inflation and long-term inflation
expectations changed? from the Federal Reserve Bank of
Kansas City can be found <a href="http://www.kansascityfed.org/Publicat/ECONREV/PDF/1q08Clark.pdf">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> 
(%)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.1</td>
<td>0.0</td>
<td>0.2</td>
<td>2.4</td>
<td>-0.3</td>
<td>3.8</td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.0</td>
<td>0.1</td>
<td>-0.1</td>
<td>1.2</td>
<td>1.7</td>
<td>2.3</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>-0.1</td>
<td>-0.1</td>
<td>0.1</td>
<td>2.0</td>
<td>1.3</td>
<td>0.1</td>
<td>-0.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>0.1</td>
<td>0.1</td>
<td>-0.2</td>
<td>0.9</td>
<td>1.9</td>
<td>3.1</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>-0.0</td>
<td>-0.5</td>
<td>2.8</td>
<td>14.9</td>
<td>-18.1</td>
<td>13.7</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.2</td>
<td>0.0</td>
<td>0.2</td>
<td>0.3</td>
<td>1.9</td>
<td>5.4</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM" style="color: black;">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.4</td>
<td>-0.0</td>
<td>0.4</td>
<td>2.5</td>
<td>-0.1</td>
<td>3.7</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>0.2</td>
<td>0.2</td>
<td>-0.0</td>
<td>0.8</td>
<td>1.5</td>
<td>2.0</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

Consumer price inflation remain subdued last month, according to the U.S. Bureau of Labor Statistics. It reported that the CPI during March rose all of 0.1% after having been unchanged during February. That was enough to leave the [...]

U.S. CPI Increase Is Weak; Core Prices Are Unchanged

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Consumer price inflation remain subdued last month, according
to the U.S. Bureau of Labor Statistics. It reported that the CPI during
March rose all of 0.1% after having been unchanged during February.
That was enough to leave the change during the last three months at
0.9% (AR), its lowest since May of last year. The latest figure matched
Consensus expectations.
Core consumer prices also were weak. Goods
&amp; services together were unchanged while a 0.1% increase had
been expected. That pulled the three-month change to negative 0.1%
which was its lowest since January 2009. Core goods prices
fell 0.1% as they did in February. That was enough to pull the
three-month gain to a negative 0.1% versus the high of 5.4% last April.
New &amp; used motor vehicles prices posted a 0.2% increase (5.5%
y/y). Apparel prices began to fall slightly versus last year while
prices for household furnishings &amp; operation fell 2.3% y/y.
Core services prices again inched up 0.1%
(+0.9% y/y). Weakness in the housing market caused a 0.5% y/y decline
in shelter prices while owners equivalent rent of primary residences, a
measure not equivalent to other house price measures, slipped again
m/m. A slight y/y decline in this measure was the weakest reading since
the series' start in 1983. Elsewhere in services, prices have been
relatively strong. Public transportation prices rose 0.5% (6.1% y/y)
and medical care services prices gained another 0.3% (3.8% y/y).
Finally, education costs posted a strong 0.6% increase (4.9% y/y) but
recreation prices slipped for the seventh straight month (-1.1% y/y).
Energy prices slipped slightly again as
they reflected a 0.8% m/m decline in gasoline prices. Gas prices are
up, however, by 41.4% y/y. Fuel oil prices slipped 1.3% (+19.6% y/y)
but natural gas &amp; electricity prices rose a firm 1.4% (-1.8%
y/y).
Food &amp; beverage prices firmed a bit
by 0.2% but the y/y gain of 0.3% followed six months of price
deflation. A 0.4% decline in dairy prices was an improvement from the
10.4% decline last summer. Also showing less deflation were prices for
meats, poultry, fish &amp; eggs (-1.7% y/y) but cereal &amp;
bakery product prices continued weak (-1.1% y/y). Dairy product prices
also showed less deflation (-0.4% y/y) while fruit &amp; bakery
products rose 2.1% y/y. Finally, the cost of eating out rose just 1.2%,
a record low increase, while alcoholic beverage prices also rose just
1.1% y/y, the least since 1995.
The chained CPI, which adjusts for shifts in consumption
patterns improved last month and rose 2.5% year-to-year. Chained prices
less food &amp; energy gained 0.8% y/y.
The consumer price data is available in Haver's USECON
database while detailed figures can be found in the CPIDATA
database.
Has the behavior of inflation and long-term inflation
expectations changed? from the Federal Reserve Bank of
Kansas City can be found <a href="http://www.kansascityfed.org/Publicat/ECONREV/PDF/1q08Clark.pdf">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer
Price Index</a> 
(%)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.1</td>
<td>0.0</td>
<td>0.2</td>
<td>2.4</td>
<td>-0.3</td>
<td>3.8</td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.0</td>
<td>0.1</td>
<td>-0.1</td>
<td>1.2</td>
<td>1.7</td>
<td>2.3</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>-0.1</td>
<td>-0.1</td>
<td>0.1</td>
<td>2.0</td>
<td>1.3</td>
<td>0.1</td>
<td>-0.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>0.1</td>
<td>0.1</td>
<td>-0.2</td>
<td>0.9</td>
<td>1.9</td>
<td>3.1</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>-0.0</td>
<td>-0.5</td>
<td>2.8</td>
<td>14.9</td>
<td>-18.1</td>
<td>13.7</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.2</td>
<td>0.0</td>
<td>0.2</td>
<td>0.3</td>
<td>1.9</td>
<td>5.4</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM" style="color: black;">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.4</td>
<td>-0.0</td>
<td>0.4</td>
<td>2.5</td>
<td>-0.1</td>
<td>3.7</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>0.2</td>
<td>0.2</td>
<td>-0.0</td>
<td>0.8</td>
<td>1.5</td>
<td>2.0</td>
<td>1.9</td>
</tr>
</tbody>
</table>
IP Rebound Screams Recovery 
by <a href="/comment/Brusca.html">Robert
Brusca</a> April 14, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Even with that strong-seeming chart and rock solid 0.9% gain
in February, manufacturing IP in the Zone remains some 14% below it
past cycle peak. But eh current progress looks good as growth over
3-and 6-months have average a pace of 19%. The consumer sector
continues to lag with a three-month growth rate of 2.2%.
Among large Euro-Area member countries Spain grew the
strongest in Feb, but it is a volatile report from Spain that fell by
3.4% in January, undercutting the impact of the gain in February. The
UK, an EU member, had the next strongest gain among large European
economies at 1.3% but that was a recoup from a -0.9% result in January.
Italy with a 0.2% rise on the heels of a 1.7% gain has the best
two-month result followed by Germany at 0.2% and 0.6%, in Feb and Jan,
respectively. Still, both Germany and Spain show IP contractions over
three-months. Spain&#8217;s output is still falling over 12-months but over
12-months German IP is up by 7.1%., followed by France at 3.3% Italy at
3% and the UK at 1.5%.
The February gains were on the back of a spike in intermediate
goods output which advanced by 1.5%. Capital goods output rose by 0.9%.
The consumer categories receded. Europe needs to get its consumer in
gear. Europe, like many countries is trying to let its export sector
pull it out of its recessionary hole almost all by itself. This is
imbalanced growth that leans heavily on demand with origins elsewhere.
Europe needs to learn to stand on its own two feet.

<table border="0" cellspacing="0" width="100%">
<colgroup><col></colgroup>
<thead><tr>
<th colspan="111" scope="col"> Euro-Area
MFG IP</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td></td>
</tr>
<tr class="even">
<td class="firstcol">Euro-Area Detail</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;MFG</td>
<td>0.9%</td>
<td>1.3%</td>
<td>0.3%</td>
<td>10.6%</td>
<td>12.6%</td>
<td>10.1%</td>
<td>9.0%</td>
<td>4.2%</td>
<td>0.9%</td>
<td>12.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer</td>
<td>-0.3%</td>
<td>0.5%</td>
<td>0.3%</td>
<td>2.2%</td>
<td>9.1%</td>
<td>1.2%</td>
<td>2.2%</td>
<td>1.1%</td>
<td>-0.1%</td>
<td>5.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">
C-Durables</td>
<td>-0.6%</td>
<td>2.6%</td>
<td>-1.5%</td>
<td>1.4%</td>
<td>12.2%</td>
<td>7.3%</td>
<td>10.5%</td>
<td>-0.3%</td>
<td>-2.5%</td>
<td>&nbsp;&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">
C-Non-durables</td>
<td>-0.2%</td>
<td>0.3%</td>
<td>0.6%</td>
<td>2.8%</td>
<td>7.5%</td>
<td>3.1%</td>
<td>1.3%</td>
<td>1.5%</td>
<td>0.6%</td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate</td>
<td>1.5%</td>
<td>0.8%</td>
<td>-1.1%</td>
<td>4.6%</td>
<td>1.8%</td>
<td>-4.2%</td>
<td>6.2%</td>
<td>6.9%</td>
<td>3.6%</td>
<td>5.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital</td>
<td>0.9%</td>
<td>-1.1%</td>
<td>0.0%</td>
<td>-0.7%</td>
<td>1.5%</td>
<td>4.5%</td>
<td>5.9%</td>
<td>3.1%</td>
<td>-0.8%</td>
<td>-0.7%</td>
</tr>
<tr>
<td colspan="11" class="firstcol">Main
Euro-Area
Countries and UK IP in MFG</td>
</tr>
<tr class="even">
<td class="firstcol"></td>
<td colspan="3">Mo/Mo</td>
<td>Feb10</td>
<td>Jan10</td>
<td>Feb10</td>
<td>Jan10</td>
<td>Feb10</td>
<td>Jan10</td>
<td>&nbsp;</td>
</tr>
<tr class="even">
<td class="firstcol">MFG Only</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q:4 
Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany:</td>
<td>0.2%</td>
<td>0.6%</td>
<td>-1.3%</td>
<td>-2.1%</td>
<td>1.3%</td>
<td>4.5%</td>
<td>8.7%</td>
<td>7.1%</td>
<td>3.2%</td>
<td>-3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">France: 
IPxConstruct'n</td>
<td>0.0%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>3.2%</td>
<td>6.9%</td>
<td>0.7%</td>
<td>5.3%</td>
<td>3.3%</td>
<td>2.6%</td>
<td>4.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>0.2%</td>
<td>1.7%</td>
<td>-0.6%</td>
<td>5.3%</td>
<td>6.8%</td>
<td>7.6%</td>
<td>3.8%</td>
<td>3.0%</td>
<td>-0.6%</td>
<td>5.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>1.6%</td>
<td>-3.4%</td>
<td>-0.6%</td>
<td>-9.3%</td>
<td>-15.4%</td>
<td>-11.9%</td>
<td>-7.3%</td>
<td>-2.1%</td>
<td>-2.0%</td>
<td>-9.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">UK: EU
member</td>
<td>1.3%</td>
<td>-0.9%</td>
<td>0.9%</td>
<td>5.5%</td>
<td>0.5%</td>
<td>6.3%</td>
<td>-0.7%</td>
<td>1.5%</td>
<td>0.1%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
U.S. Retail Sales Strengthen; Core
Sales Strongest Since 2006 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 14, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left" height="265">
Forward momentum is building behind consumer spending. March
retail sales rose 1.6%; triple the upwardly revised readings of the
prior two months and stronger than the 1.2% increase that had been
expected. On a three-month basis sales rose at an 11.0% annual rate.
Nonauto sales rose 0.6% but the February increase also was revised up
to 1.0% after an upwardly revised 0.6% January increase. The latest
gain was near expectations. On a three-month basis the gain in nonauto
sales remained strong at 9.3% (AR). These numbers were, of course,
helped by moderation in gasoline prices. Nonauto retail sales less
gasoline, a better measure of "core" spending, grew 0.7% last month and
at a 10.2% annual rate during the last three, the strongest since
January 2006.
"Core" discretionary spending improved. Apparel store sales
rose 2.3% during March and at a 22.1% annual rate during the last three
months. General merchandise store sales also rose a firm 0.6% and at a
11.9% three-month rate. Sales at furniture, home furnishings &amp;
electronics stores lagged these gains last month. They were unchanged
but were up at a 9.8% annual rate over the last three months. That's
improved from the 9.6% decline during all of last year. Furniture sales
alone have been rising at a 14.5% rate while sales of electronics
&amp; appliances have been rising at a 15.4% rate.
Mirroring the improvement in unit sales, motor vehicle sales
improved considerably by 6.6% last month and at a 19.8% rate during the
last three. Finally, growth in sales at gasoline service stations fell
0.4% and rose at just a 2.7% rate during the last three months.
Earlier strength in internet &amp; catalogue sales
continued to ease. Sales ticked up just 0.2% and the three-month rate
of gain backed off to 7.3%, one third the growth earlier this year.
The retail sales data are available in Haver's USECON
database

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">March Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Total
Retail Sales &amp; Food
Services</a> (%)</td>
<td>1.6</td>
<td>0.5</td>
<td>0.5</td>
<td>7.6</td>
<td>-6.0</td>
<td>-0.8</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding
Autos</td>
<td>0.6</td>
<td>1.0</td>
<td>0.6</td>
<td>6.4</td>
<td>-4.8</td>
<td>2.4</td>
<td>3.9</td>
</tr>
<tr class="odd">
<td class="firstcol">
Non-Auto Less Gasoline</td>
<td>0.7</td>
<td>1.1</td>
<td>0.6</td>
<td>4.2</td>
<td>-1.9</td>
<td>1.6</td>
<td>3.6</td>
</tr>
</tbody>
</table>
U.S. Business Inventories Resume
Accumulation 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 14,2010 


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414h.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Business inventories have resumed the trend toward modest
accumulation. During February, a 0.5% increase was the strongest of
four in the last five months. The gains follow 9.8% decumulation during
all of 2009 and the recent increases are the first since mid-2008.
Nevertheless, the increases have not kept up with improvement in sales
and the I/S ratio remained at its low of 1.27.
Retail inventories have started to rise. The 0.3% February
gain was third modest increase following sharp declines during 2008
&amp; 2009. That accumulation owes, however, to the auto sector
where inventories have been accumulating since September. Less autos,
the rate of decumulation only has slowed to 4.1% y/y from the peak
decumulation rate of 7.7% last fall. The slowdown has been led by
furniture stores and general merchandise but apparel store inventories
still are falling at near their strongest rate of 10.2% y/y.
Inventory accumulation in the factory sector compares with
sharp decumulation through most of 2009. It has been accompanied by
higher wholesale inventories, but here the improvement has been raised
by higher oil prices. Less oil, wholesale inventories still are being
shed at a 9.5% rate versus the 12.5% decline during all of last year.
The business sales and inventory data are available in Haver's
USECON database.
Inventories, inflation dynamics, and the New
Keynesian Phillips Curve from the Federal Reserve Bank of
Richmond is available <a href="http://www.richmondfed.org/publications/research/working_papers/2010/pdf/wp10-01.pdf">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414i.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100414j.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Business
Inventories (%)</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Feb. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.5</td>
<td>0.2</td>
<td>-0.2</td>
<td>-6.7</td>
<td>-9.8</td>
<td>0.8</td>
<td>4.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.3</td>
<td>0.1</td>
<td>0.2</td>
<td>-7.2</td>
<td>-10.4</td>
<td>-3.3</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Retail excl. Auto</td>
<td>-0.1</td>
<td>-0.2</td>
<td>0.4</td>
<td>-4.1</td>
<td>-4.9</td>
<td>-1.9</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.6</td>
<td>0.1</td>
<td>-0.8</td>
<td>-7.4</td>
<td>-10.5</td>
<td>3.7</td>
<td>6.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.5</td>
<td>0.3</td>
<td>-0.2</td>
<td>-5.6</td>
<td>-8.7</td>
<td>2.2</td>
<td>3.7</td>
</tr>
</tbody>
</table>
</body></html>

U.S. CPI Increase Is Weak; CorePrices Are Unchanged

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.

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**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.

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**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.

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**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.

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**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.

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**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.

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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

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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

Carol Stone, CBE

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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: April 2010

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