Tom Moeller

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&bull; Economic worries develop.


&bull; Pricing power weakens.


The National Federation of Independent Business (NFIB)
indicated that its Small Business Optimism Index plummeted 7.8% (-5.3% y/y) to
96.4 during March, the lowest level since October 2016.

Almost all of the readings in the survey declined, some
sharply. The net percentage of firms expecting the economy to improve declined
to 5% from 22%. The net percentage of firms expecting higher real sales fell to
-12%, the lowest level since August 2011. The net percentage reporting that now
was a good time to expand the business also declined significantly.

On the labor front, the net percentage of firms planning to
increase employment fell m/m to a four-year low of 9%, down from 21% in February.
A lessened 47% of businesses found few or no qualified candidates to fill job
openings, versus 54% twelve months earlier.

A lessened net 31% of firms raised worker compensation, down
from the expansion high of 37% reached in September 2018. A greatly reduced 16%
of firms were planning to raise worker earnings, down from the 26% expansion
high reached in November.

Pricing power deteriorated as a net 6% of firms reported
raising prices, down from a 19% high in May 2018. A sharply lower net 12% of
firms planned to raise average selling prices, less than half the percentage
late in 2018.

Credit became slightly harder to get. A net three percent of
firms reported trouble obtaining financing versus one percent in February.
Sixteen percent of firms reported difficulty near the end of the recession in
2009. A net three percent of firms were not satisfied that their borrowing needs
were met in the last three months.

The small business survey inquires about additional issues
facing small business. A lessened 24% reported a problem with the quality of
labor and a greatly reduced 15% indicated that taxes were the largest problem.
Government requirements were worrisome to a steady 13% of respondents. That
remained below the September 2013 high of 24%. A lessened seven percent of firms
reported the cost of labor as the most significant problem, down from the record
11% in September of last year. Insurance cost/availability concerned a lower 10%
of respondents. Competition from large businesses was felt by a steady 10% of
businesses as the biggest problem. Poor sales were significant for nine percent
of businesses, the most in six months but down from 32% in 2009. Financial &amp;
interest rate problems worried just two percent of respondents. Inflation
concerned a slightly higher two percent of respondents as the biggest problem.

Roughly 24 million small businesses exist in the U.S. and
they create 80% of all new jobs. The index is based 1986=100. The typical NFIB
member employs 10 people and reports gross sales of about $500,000 a year.

The NFIB figures can be found in Haver's SURVEYS database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >National Federation of
 Independent Business (SA, Net % of Firms)</th>
 <th scope="col" >Mar</th>
 <th scope="col" >Feb</th>
 <th scope="col" >Jan</th>
 <th scope="col" >Mar'19</th>
 <th scope="col" >2019</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Small Business Optimism Index (1986=100)</td>
 <td>96.4</td>
 <td>104.5</td>
 <td>104.3</td>
 <td>101.8</td>
 <td>103.0</td>
 <td>106.7</td>
 <td>104.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Expecting Economy to Improve</td>
 <td>5</td>
 <td>22</td>
 <td>14</td>
 <td>11</td>
 <td>13</td>
 <td>32</td>
 <td>39</td>
 </tr>
 <tr>
 <td class="firstcol" >Firms Expecting Higher Real Sales</td>
 <td>-12</td>
 <td>19</td>
 <td>23</td>
 <td>19</td>
 <td>18</td>
 <td>26</td>
 <td>23</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Reporting Now Is a Good Time to
 Expand the Business</td>
 <td>13</td>
 <td>26</td>
 <td>28</td>
 <td>23</td>
 <td>25</td>
 <td>30</td>
 <td>23</td>
 </tr>
 <tr>
 <td class="firstcol" >Firms Planning to Increase Employment</td>
 <td>9</td>
 <td>21</td>
 <td>19</td>
 <td>18</td>
 <td>19</td>
 <td>21</td>
 <td>18</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms With Few or No Qualified
 Applicants for Job Openings (%)</td>
 <td>47</td>
 <td>52</td>
 <td>49</td>
 <td>54</td>
 <td>52</td>
 <td>51</td>
 <td>49</td>
 </tr>
 <tr>
 <td class="firstcol" >Firms Expecting to Make Capital Outlays</td>
 <td>21</td>
 <td>26</td>
 <td>28</td>
 <td>27</td>
 <td>28</td>
 <td>29</td>
 <td>28</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Reporting That Credit Was Harder
 to Get</td>
 <td>3</td>
 <td>1</td>
 <td>4</td>
 <td>6</td>
 <td>4</td>
 <td>4</td>
 <td>4</td>
 </tr>
 <tr>
 <td class="firstcol" >Firms Raising Average Selling Prices</td>
 <td>6</td>
 <td>11</td>
 <td>15</td>
 <td>12</td>
 <td>13</td>
 <td>15</td>
 <td>7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Firms Raising Worker Compensation</td>
 <td>31</td>
 <td>36</td>
 <td>36</td>
 <td>33</td>
 <td>31</td>
 <td>33</td>
 <td>27</td>
 </tr>
 </tbody>
 </table>
 
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• Economic worries develop. • Pricing power weakens. The National Federation of Independent Business (NFIB) indicated that its Small Business Optimism Index plummeted 7.8% (-5.3% y/y) to 96.4 during March, the lowest level since [...]

U.S. Small Businesses Become Pessimistic

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&bull; Crude oil prices improved last week, but a sideways trend persists.


&bull; A supply/demand imbalance for petroleum intensifies.


The price of West Texas Intermediate crude oil
increased to $24.40 per barrel last week from an average $21.72 one week earlier.
Despite the improvement, the price remained roughly two-thirds lower y/y.
Yesterday, the price was $22.41. The price of Brent crude oil rose to an
average of $32.25 last week. The price has fallen from a $67.38 high averaged in
the last week of December. Yesterday, the price was $31.82.

Retail gasoline prices declined to $1.85 per gallon (-34.5%
y/y) in the week ended April 13 from $1.92 per gallon in the previous week.
Prices remained below their May 2019 peak of $2.90 per gallon. Haver Analytics
adjusts the gasoline price series for regular seasonal variation. The seasonally
adjusted price fell to $1.79 per gallon from $1.89.

The average price of natural gas rose to $1.77/mmbtu
(-35.1% y/y) last week from $1.62, but remained below the peak of $2.81/mmbtu
early in November. Yesterday, the price was $1.86/mmbtu.

Reduced prices reflect supply outpacing demand. In the four
weeks ending April 3, gasoline inventories rose 12.3% y/y and inventories
of all petroleum products increased 3.8% y/y. Gasoline demand declined
19.3% y/y, while total petroleum product demand fell 10.7% y/y. Crude oil input
to refineries declined 5.9% y/y in the past four weeks.

These data are reported by the U.S. Department of Energy. The
price data can be found in Haver's WEEKLY and DAILY databases.
Greater detail on prices, as well as the demand, production and inventory data,
along with regional breakdowns, are in OILWKLY.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Weekly Energy Prices</th>
 <th>04/13/20</th>
 <th>04/06/20</th>
 <th>03/30/20</th>
 <th>Y/Y %</th>
 <th>2019</th>
 <th>2018</th>
 <th>2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Retail Gasoline ($ per Gallon Regular,
 Monday Price, End of Period)</td>
 <td>1.85</td>
 <td>1.92</td>
 <td>2.00</td>
 <td>-34.5</td>
 <td>2.57</td>
 <td>2.27</td>
 <td>2.47</td>
 </tr>
 <tr>
 <td class="firstcol" >Light Sweet Crude Oil, WTI ($ per bbl,
 Previous Week's Average)</td>
 <td>24.40</td>
 <td>21.72</td>
 <td>20.62</td>
 <td>-61.9</td>
 <td>56.91</td>
 <td>64.95</td>
 <td>50.87</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Natural Gas ($/mmbtu, LA, Previous
 Week's Average)</td>
 <td>1.77</td>
 <td>1.62</td>
 <td>1.73</td>
 <td>-35.1</td>
 <td>2.57</td>
 <td>3.18</td>
 <td>2.99</td>
 </tr>
 </tbody>
 </table>
 
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• Crude oil prices improved last week, but a sideways trend persists. • A supply/demand imbalance for petroleum intensifies. The price of West Texas Intermediate crude oil increased to $24.40 per barrel last week from an average [...]

U.S. Energy Prices Are Mixed

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&bull; Crude oil prices improved last week, but a sideways trend persists.


&bull; A supply/demand imbalance for petroleum intensifies.


The price of West Texas Intermediate crude oil
increased to $24.40 per barrel last week from an average $21.72 one week earlier.
Despite the improvement, the price remained roughly two-thirds lower y/y.
Yesterday, the price was&nbsp; $22.41. The price of Brent crude oil rose to an
average of $32.25 last week. The price has fallen from a $67.38 high averaged in
the last week of December. Yesterday, the price was $31.82.

Retail gasoline prices declined to $1.85 per gallon (-34.5%
y/y) in the week ended April 13 from $1.92 per gallon in the previous week.
Prices remained below their May 2019 peak of $2.90 per gallon. Haver Analytics
adjusts the gasoline price series for regular seasonal variation. The seasonally
adjusted price fell to $1.79 per gallon from $1.89.

The average price of natural gas rose to $1.77/mmbtu
(-35.1% y/y) last week from $1.62, but remained below the peak of $2.81/mmbtu
early in November. Yesterday, the price was $1.86/mmbtu.

Reduced prices reflect supply outpacing demand. In the four
weeks ending April 3, gasoline inventories rose 12.3% y/y and inventories
of all petroleum products increased 3.8% y/y. Gasoline demand declined
19.3% y/y, while total petroleum product demand fell 10.7% y/y. Crude oil input
to refineries declined 5.9% y/y in the past four weeks.

These data are reported by the U.S. Department of Energy. The
price data can be found in Haver's WEEKLY and DAILY databases.
Greater detail on prices, as well as the demand, production and inventory data,
along with regional breakdowns, are in OILWKLY.


 <thead>
 <tr>
 <th class="firstcol" scope="col" width="1046">Weekly Energy Prices</th>
 <th width="117">04/13/20</th>
 <th width="117">04/06/20</th>
 <th width="117">03/30/20</th>
 <th width="117">Y/Y %</th>
 <th width="117">2019</th>
 <th width="118">2018</th>
 <th width="118">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" width="1046">Retail Gasoline ($ per Gallon Regular,
 Monday Price, End of Period)</td>
 <td align="center" width="117">1.85</td>
 <td align="center" width="117">1.92</td>
 <td align="center" width="117">2.00</td>
 <td align="center" width="117">-34.5</td>
 <td align="center" width="117">2.57</td>
 <td align="center" width="118">2.27</td>
 <td align="center" width="118">2.47</td>
 </tr>
 <tr>
 <td class="firstcol" width="1046">Light Sweet Crude Oil, WTI ($ per bbl,
 Previous Week's Average)</td>
 <td align="center" width="117">24.40</td>
 <td align="center" width="117">21.72</td>
 <td align="center" width="117">20.62</td>
 <td align="center" width="117">-61.9</td>
 <td align="center" width="117">56.91</td>
 <td align="center" width="118">64.95</td>
 <td align="center" width="118">50.87</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1046">Natural Gas ($/mmbtu, LA, Previous
 Week's Average)</td>
 <td align="center" width="117">1.77</td>
 <td align="center" width="117">1.62</td>
 <td align="center" width="117">1.73</td>
 <td align="center" width="117">-35.1</td>
 <td align="center" width="117">2.57</td>
 <td align="center" width="118">3.18</td>
 <td align="center" width="118">2.99</td>
 </tr>
 </tbody>


&nbsp;
U.S. Small Business Optimism Improves Slightly 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp;April 15, 2020
• 
• .

The National Federation of Independent Business (NFIB)
indicated that its Small Business Optimism Index improved 0.2% (2.8% y/y) to
104.5 during February and added to its 1.6% January rise. The reading remained
4.0% below the high reached in August 2018.
The net percentage of firms expecting the economy to improve
rose to 22% from 14%, but most other readings in the survey weakened. The net
percentage of firms expecting higher real sales fell to 19% and reversed part of
its January rise. The net percentage reporting that now was a good time to
expand the business also declined modestly.&nbsp;
On the labor front, there was improvement. The net percentage
of firms planning to increase employment rose m/m to 21%, its highest level in
three months. Nevertheless, it remained below the expansion high of 26% in
August 2018. A higher 52% of businesses found few or no qualified candidates to
fill job openings. It was the most in three months but still down from 57% in
August of last year.
A steady net 36% of firms raised worker compensation, just
below the expansion high of 37% reached in September 2018. Working the other
way, a greatly reduced 19% of firms were planning to raise worker earnings last
month, down from the 26% expansion high reached three months earlier.
Current pricing power deteriorated as a net 11% of firms
reported raising prices and that mostly reversed three months of increase. A
sharply lower net 20% of firms planned to raise average selling prices,
increased from 15% in September.
Credit became easier to get. Only a net one percent of firms
reported trouble obtaining financing. Sixteen percent of firms reported
difficulty near the end of the recession in 2009. A lessened net two percent of
firms were not satisfied that their borrowing needs were met in the last three
months.
The small business survey inquires about additional issues
facing small business. A lessened 25% reported a problem with the quality of
labor and a greatly reduced 14% indicated that taxes were the largest problem.
Government requirements were worrisome to a steady 13% of respondents. That
remained below the September 2013 high of 24%. A steady eight percent of firms
reported the cost of labor as the most significant problem, down from the record
11% in September of last year. Insurance cost/availability concerned a greatly
increased 12% of respondents. Competition from large businesses was felt by a
slightly higher 10% of businesses as the biggest problem. Poor sales were
significant for just seven percent of businesses, down from 32% in 2009.
Financial &amp; interest rate problems worried just two percent of respondents.
Inflation concerned a steady one percent of respondents as the biggest problem.
Roughly 24 million small businesses exist in the U.S. and
they create 80% of all new jobs. The index is based 1986=100. The typical NFIB
member employs 10 people and reports gross sales of about $500,000 a year.
The NFIB figures can be found in Haver's SURVEYS
database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="1147">National Federation of
 Independent Business (SA, Net % of Firms)</th>
 <th scope="col" width="102">Mar</th>
 <th scope="col" width="103">Feb</th>
 <th scope="col" width="103">Jan</th>
 <th scope="col" width="103">Mar'19</th>
 <th scope="col" width="103">2019</th>
 <th scope="col" width="103">2018</th>
 <th scope="col" width="103">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="1147">Small Business Optimism Index (1986=100)</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">104.5</td>
 <td align="center" width="103">104.3</td>
 <td align="center" width="103">101.7</td>
 <td align="center" width="103">103.0</td>
 <td align="center" width="103">106.7</td>
 <td align="center" width="103">104.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Expecting Economy to Improve</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">22</td>
 <td align="center" width="103">14</td>
 <td align="center" width="103">11</td>
 <td align="center" width="103">13</td>
 <td align="center" width="103">32</td>
 <td align="center" width="103">39</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Expecting Higher Real Sales</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">23</td>
 <td align="center" width="103">16</td>
 <td align="center" width="103">18</td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">23</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Reporting Now Is a Good Time to
 Expand the Business</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">22</td>
 <td align="center" width="103">25</td>
 <td align="center" width="103">30</td>
 <td align="center" width="103">23</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Planning to Increase Employment</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">21</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">16</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">21</td>
 <td align="center" width="103">18</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms With Few or No Qualified
 Applicants for Job Openings (%)</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">52</td>
 <td align="center" width="103">49</td>
 <td align="center" width="103">49</td>
 <td align="center" width="103">52</td>
 <td align="center" width="103">51</td>
 <td align="center" width="103">49</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Expecting to Make Capital Outlays</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">27</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">29</td>
 <td align="center" width="103">28</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Reporting That Credit Was Harder
 to Get</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">1</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">6</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">4</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Raising Average Selling Prices</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">11</td>
 <td align="center" width="103">15</td>
 <td align="center" width="103">13</td>
 <td align="center" width="103">13</td>
 <td align="center" width="103">15</td>
 <td align="center" width="103">7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Raising Worker Compensation</td>
 <td align="center" width="102"></td>
 <td align="center" width="103">36</td>
 <td align="center" width="103">36</td>
 <td align="center" width="103">31x</td>
 <td align="center" width="103">31</td>
 <td align="center" width="103">33</td>
 <td align="center" width="103">27</td>
 </tr>
 </tbody>
</table>


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• Economic worries develop.
• Pricing power weakens. 

The National Federation of Independent Business (NFIB)
indicated that its Small Business Optimism Index plummeted 7.8% (-5.3% y/y) to
96.4 during March, the lowest level since October 2016.
Almost all of the readings in the survey declined, some
sharply. The net percentage of firms expecting the economy to improve declined
to 5% from 22%. The net percentage of firms expecting higher real sales fell to
-12%, the lowest level since August 2011. The net percentage reporting that now
was a good time to expand the business also declined significantly.&nbsp;
On the labor front, the net percentage of firms planning to
increase employment fell m/m to a four-year low of 9%, down from 21% in February.
A lessened 47% of businesses found few or no qualified candidates to fill job
openings, versus 54% twelve months earlier.
A lessened net 31% of firms raised worker compensation, down
from the expansion high of 37% reached in September 2018. A greatly reduced 16%
of firms were planning to raise worker earnings, down from the 26% expansion
high reached in November.
Pricing power deteriorated as a net 6% of firms reported
raising prices, down from a 19% high in May 2018. A sharply lower net 12% of
firms planned to raise average selling prices, less than half the percentage
late in 2018.
Credit became slightly harder to get. A net three percent of
firms reported trouble obtaining financing versus one percent in February.
Sixteen percent of firms reported difficulty near the end of the recession in
2009. A net three percent of firms were not satisfied that their borrowing needs
were met in the last three months.
The small business survey inquires about additional issues
facing small business. A lessened 24% reported a problem with the quality of
labor and a greatly reduced 15% indicated that taxes were the largest problem.
Government requirements were worrisome to a steady 13% of respondents. That
remained below the September 2013 high of 24%. A lessened seven percent of firms
reported the cost of labor as the most significant problem, down from the record
11% in September of last year. Insurance cost/availability concerned a lower 10%
of respondents. Competition from large businesses was felt by a steady 10% of
businesses as the biggest problem. Poor sales were significant for nine percent
of businesses, the most in six months but down from 32% in 2009. Financial &amp;
interest rate problems worried just two percent of respondents. Inflation
concerned a slightly higher two percent of respondents as the biggest problem.
Roughly 24 million small businesses exist in the U.S. and
they create 80% of all new jobs. The index is based 1986=100. The typical NFIB
member employs 10 people and reports gross sales of about $500,000 a year.
The NFIB figures can be found in Haver's SURVEYS
database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="1147">National Federation of
 Independent Business (SA, Net % of Firms)</th>
 <th scope="col" width="102">Mar</th>
 <th scope="col" width="103">Feb</th>
 <th scope="col" width="103">Jan</th>
 <th scope="col" width="103">Mar'19</th>
 <th scope="col" width="103">2019</th>
 <th scope="col" width="103">2018</th>
 <th scope="col" width="103">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="1147">Small Business Optimism Index (1986=100)</td>
 <td align="center" width="102">96.4</td>
 <td align="center" width="103">104.5</td>
 <td align="center" width="103">104.3</td>
 <td align="center" width="103">101.8</td>
 <td align="center" width="103">103.0</td>
 <td align="center" width="103">106.7</td>
 <td align="center" width="103">104.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Expecting Economy to Improve</td>
 <td align="center" width="102">5</td>
 <td align="center" width="103">22</td>
 <td align="center" width="103">14</td>
 <td align="center" width="103">11</td>
 <td align="center" width="103">13</td>
 <td align="center" width="103">32</td>
 <td align="center" width="103">39</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Expecting Higher Real Sales</td>
 <td align="center" width="102">-12</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">23</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">18</td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">23</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Reporting Now Is a Good Time to
 Expand the Business</td>
 <td align="center" width="102">13</td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">23</td>
 <td align="center" width="103">25</td>
 <td align="center" width="103">30</td>
 <td align="center" width="103">23</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Planning to Increase Employment</td>
 <td align="center" width="102">9</td>
 <td align="center" width="103">21</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">18</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">21</td>
 <td align="center" width="103">18</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms With Few or No Qualified
 Applicants for Job Openings (%)</td>
 <td align="center" width="102">47</td>
 <td align="center" width="103">52</td>
 <td align="center" width="103">49</td>
 <td align="center" width="103">54</td>
 <td align="center" width="103">52</td>
 <td align="center" width="103">51</td>
 <td align="center" width="103">49</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Expecting to Make Capital Outlays</td>
 <td align="center" width="102">21</td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">27</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">29</td>
 <td align="center" width="103">28</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Reporting That Credit Was Harder
 to Get</td>
 <td align="center" width="102">3</td>
 <td align="center" width="103">1</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">6</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">4</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Raising Average Selling Prices</td>
 <td align="center" width="102">6</td>
 <td align="center" width="103">11</td>
 <td align="center" width="103">15</td>
 <td align="center" width="103">12</td>
 <td align="center" width="103">13</td>
 <td align="center" width="103">15</td>
 <td align="center" width="103">7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Raising Worker Compensation</td>
 <td align="center" width="102">31</td>
 <td align="center" width="103">36</td>
 <td align="center" width="103">36</td>
 <td align="center" width="103">33</td>
 <td align="center" width="103">31</td>
 <td align="center" width="103">33</td>
 <td align="center" width="103">27</td>
 </tr>
 </tbody>
</table>


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The National Federation of Independent Business (NFIB) indicated that its Small Business Optimism Index plummeted 7.8% (-5.3% y/y) to 96.4 during March, the lowest level since October 2016. Almost all of the readings in the survey [...]

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• Economic worries develop.
• Pricing power weakens. 

The National Federation of Independent Business (NFIB)
indicated that its Small Business Optimism Index plummeted 7.8% (-5.3% y/y) to
96.4 during March, the lowest level since October 2016.
Almost all of the readings in the survey declined, some
sharply. The net percentage of firms expecting the economy to improve declined
to 5% from 22%. The net percentage of firms expecting higher real sales fell to
-12%, the lowest level since August 2011. The net percentage reporting that now
was a good time to expand the business also declined significantly.&nbsp;
On the labor front, the net percentage of firms planning to
increase employment fell m/m to a four-year low of 9%, down from 21% in February.
A lessened 47% of businesses found few or no qualified candidates to fill job
openings, versus 54% twelve months earlier.
A lessened net 31% of firms raised worker compensation, down
from the expansion high of 37% reached in September 2018. A greatly reduced 16%
of firms were planning to raise worker earnings, down from the 26% expansion
high reached in November.
Pricing power deteriorated as a net 6% of firms reported
raising prices, down from a 19% high in May 2018. A sharply lower net 12% of
firms planned to raise average selling prices, less than half the percentage
late in 2018.
Credit became slightly harder to get. A net three percent of
firms reported trouble obtaining financing versus one percent in February.
Sixteen percent of firms reported difficulty near the end of the recession in
2009. A net three percent of firms were not satisfied that their borrowing needs
were met in the last three months.
The small business survey inquires about additional issues
facing small business. A lessened 24% reported a problem with the quality of
labor and a greatly reduced 15% indicated that taxes were the largest problem.
Government requirements were worrisome to a steady 13% of respondents. That
remained below the September 2013 high of 24%. A lessened seven percent of firms
reported the cost of labor as the most significant problem, down from the record
11% in September of last year. Insurance cost/availability concerned a lower 10%
of respondents. Competition from large businesses was felt by a steady 10% of
businesses as the biggest problem. Poor sales were significant for nine percent
of businesses, the most in six months but down from 32% in 2009. Financial &amp;
interest rate problems worried just two percent of respondents. Inflation
concerned a slightly higher two percent of respondents as the biggest problem.
Roughly 24 million small businesses exist in the U.S. and
they create 80% of all new jobs. The index is based 1986=100. The typical NFIB
member employs 10 people and reports gross sales of about $500,000 a year.
The NFIB figures can be found in Haver's SURVEYS
database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="1147">National Federation of
 Independent Business (SA, Net % of Firms)</th>
 <th scope="col" width="102">Mar</th>
 <th scope="col" width="103">Feb</th>
 <th scope="col" width="103">Jan</th>
 <th scope="col" width="103">Mar'19</th>
 <th scope="col" width="103">2019</th>
 <th scope="col" width="103">2018</th>
 <th scope="col" width="103">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="1147">Small Business Optimism Index (1986=100)</td>
 <td align="center" width="102">96.4</td>
 <td align="center" width="103">104.5</td>
 <td align="center" width="103">104.3</td>
 <td align="center" width="103">101.8</td>
 <td align="center" width="103">103.0</td>
 <td align="center" width="103">106.7</td>
 <td align="center" width="103">104.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Expecting Economy to Improve</td>
 <td align="center" width="102">5</td>
 <td align="center" width="103">22</td>
 <td align="center" width="103">14</td>
 <td align="center" width="103">11</td>
 <td align="center" width="103">13</td>
 <td align="center" width="103">32</td>
 <td align="center" width="103">39</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Expecting Higher Real Sales</td>
 <td align="center" width="102">-12</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">23</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">18</td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">23</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Reporting Now Is a Good Time to
 Expand the Business</td>
 <td align="center" width="102">13</td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">23</td>
 <td align="center" width="103">25</td>
 <td align="center" width="103">30</td>
 <td align="center" width="103">23</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Planning to Increase Employment</td>
 <td align="center" width="102">9</td>
 <td align="center" width="103">21</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">18</td>
 <td align="center" width="103">19</td>
 <td align="center" width="103">21</td>
 <td align="center" width="103">18</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms With Few or No Qualified
 Applicants for Job Openings (%)</td>
 <td align="center" width="102">47</td>
 <td align="center" width="103">52</td>
 <td align="center" width="103">49</td>
 <td align="center" width="103">54</td>
 <td align="center" width="103">52</td>
 <td align="center" width="103">51</td>
 <td align="center" width="103">49</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Expecting to Make Capital Outlays</td>
 <td align="center" width="102">21</td>
 <td align="center" width="103">26</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">27</td>
 <td align="center" width="103">28</td>
 <td align="center" width="103">29</td>
 <td align="center" width="103">28</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Reporting That Credit Was Harder
 to Get</td>
 <td align="center" width="102">3</td>
 <td align="center" width="103">1</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">6</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">4</td>
 <td align="center" width="103">4</td>
 </tr>
 <tr>
 <td class="firstcol" width="1147">Firms Raising Average Selling Prices</td>
 <td align="center" width="102">6</td>
 <td align="center" width="103">11</td>
 <td align="center" width="103">15</td>
 <td align="center" width="103">12</td>
 <td align="center" width="103">13</td>
 <td align="center" width="103">15</td>
 <td align="center" width="103">7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1147">Firms Raising Worker Compensation</td>
 <td align="center" width="102">31</td>
 <td align="center" width="103">36</td>
 <td align="center" width="103">36</td>
 <td align="center" width="103">33</td>
 <td align="center" width="103">31</td>
 <td align="center" width="103">33</td>
 <td align="center" width="103">27</td>
 </tr>
 </tbody>
</table>

&nbsp;
U.S. Import and Export Prices Continue to Decline 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp;April 14, 2020
• Lower oil prices drag costs lower.
• Prices for other goods weaken.

Import prices weakened 2.3% during March after falling 0.7%
in February, revised from -0.5%. A 3.0% decline had been expected in the Action
Economics Forecast Survey. These figures are not seasonally adjusted and do not
include import duties.
A 27.4% decline (-36.0% y/y) in petroleum &amp; petroleum
product prices accounted for virtually all of the total's drop. It followed an
8.8% fall during February. Nonpetroleum import prices eased 0.1% (-0.9%&nbsp;y/y)
after a 0.2% rise.
Lower prices for foods, feeds &amp; beverages weakened the
import price total with a 1.0% decline (+0.1% y/y). Prices of industrial
materials excluding petroleum eased 0.2% (-2.4% y/y). Capital goods prices rose
0.1% (-1.2% y/y) for a fourth straight month as computer, peripheral &amp;
semiconductor costs increased 0.6% (-5.4% y/y). Capital goods prices excluding
these technology products held steady (0.4% y/y). Auto, parts &amp; engine
prices improved 0.4% (0.5% y/y) as nonauto consumer goods prices declined 0.3%
(-0.6% y/y) following two months of stability.
Export prices declined 1.6% last month (-3.6% y/y) after
weakening 1.1% in February. A 1.9% fall had been expected.
The decline reflected a 1.4% drop (-2.2% y/y) in agricultural
product prices. Nonagricultural product prices also weakened by 1.5% (-3.7%
y/y). Prices for foods, feeds &amp; beverages dropped 1.5% (-1.8% y/y)
Industrial materials prices weakened 4.5% (-11.2% y/y) as petroleum product
costs fell 14.6% (-29.8% y/y). Capital goods prices improved 0.2% (0.8% y/y) as
computer, peripheral &amp; semiconductor prices gained 0.8% (-2.6% y/y).
Excluding these products, the cost of capital goods improved 0.1% (1.6% y/y).
Auto &amp; auto product export prices gained 0.1% (-0.3% y/y) for a second month
while nonauto consumer goods prices declined 0.6% (-0.2% y/y).
The import and export price series can be found in Haver's USECON
database. Detailed figures are available in the USINT database. The
expectations figure from the Action Economics Forecast Survey is in the AS1REPNA
database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="856"><a href="http://www.haverselect.com/dlx/USARC04/@E8/@E807/@E807.HTM">Import/Export
 Prices (NSA, %)</a></th>
 <th scope="col" width="144">Mar</th>
 <th scope="col" width="144">Feb</th>
 <th scope="col" width="144">Jan</th>
 <th scope="col" width="144">Mar Y/Y</th>
 <th scope="col" width="145">2019</th>
 <th scope="col" width="145">2018</th>
 <th scope="col" width="145">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="856">Imports - All Commodities</td>
 <td align="center" width="144">-2.3</td>
 <td align="center" width="144">-0.7</td>
 <td align="center" width="144">0.2</td>
 <td align="center" width="144">-4.1</td>
 <td align="center" width="145">-1.3</td>
 <td align="center" width="145">3.1</td>
 <td align="center" width="145">2.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="856">&nbsp;&nbsp;Petroleum &amp; Petroleum
 Products</td>
 <td align="center" width="144">-27.4</td>
 <td align="center" width="144">-8.8</td>
 <td align="center" width="144">0.3</td>
 <td align="center" width="144">-36.0</td>
 <td align="center" width="145">-2.6</td>
 <td align="center" width="145">22.0</td>
 <td align="center" width="145">25.6</td>
 </tr>
 <tr>
 <td class="firstcol" width="856">&nbsp;&nbsp;Nonpetroleum</td>
 <td align="center" width="144">-0.1</td>
 <td align="center" width="144">&nbsp;0.2</td>
 <td align="center" width="144">0.1</td>
 <td align="center" width="144">-0.9</td>
 <td align="center" width="145">-1.1</td>
 <td align="center" width="145">1.3</td>
 <td align="center" width="145">1.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="856">Exports - All Commodities</td>
 <td align="center" width="144">-1.6</td>
 <td align="center" width="144">-1.1</td>
 <td align="center" width="144">0.6</td>
 <td align="center" width="144">-3.6</td>
 <td align="center" width="145">-0.9</td>
 <td align="center" width="145">3.4</td>
 <td align="center" width="145">2.4</td>
 </tr>
 <tr>
 <td class="firstcol" width="856">&nbsp;&nbsp;Agricultural</td>
 <td align="center" width="144">-1.4</td>
 <td align="center" width="144">-2.7</td>
 <td align="center" width="144">2.2</td>
 <td align="center" width="144">-2.2</td>
 <td align="center" width="145">-0.4</td>
 <td align="center" width="145">0.6</td>
 <td align="center" width="145">1.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="856">&nbsp;&nbsp;Nonagricultural</td>
 <td align="center" width="144">-1.5</td>
 <td align="center" width="144">-1.1</td>
 <td align="center" width="144">0.6</td>
 <td align="center" width="144">-3.7</td>
 <td align="center" width="145">-0.9</td>
 <td align="center" width="145">3.7</td>
 <td align="center" width="145">2.5</td>
 </tr>
 </tbody>
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Paul L. Kasriel

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On April 12, 2020, OPEC, Russia, the U.S. and some other oil-producing nations reached an agreement to cut the global production of crude petroleum, which, according to Reuters, reduce the global crude supply by 20%. Immediately after this announcement by OPEC Plus was made, you know who immediately tweeted: "The big Oil Deal with OPEC Plus is done. This will save hundreds of thousands of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office. Great deal for all!"

In the 12 months ended March 2020, oil and gas drilling nonfarm payrolls averaged 153,300 per month. That represents 0.1% of monthly nonfarm payrolls excluding census workers. Oil and gas drilling in the U.S. represented 1.7% of U.S. real GDP in 2019. So, oil and gas drilling is a relatively small portion of the U.S. economy both in terms of employment and real output. Of course, crude oil and its refined products play a large role in the economy. Therefore, a reduction in the supply of and/or an increase in the price of crude oil would have a relatively larger negative impact on employment and real output in nonoil-production sectors.

From 1972 through 2019, the lowest annual average number of oil and gas drilling nonfarm payroll jobs was 120,300 in 2003. Let's say that OPEC et. al. do NOT cut production by now, but rather continue to produce at the current rate. Then let's assume that U.S. oil and gas drilling jobs FALL from their current level of 153,300 back down to their 2003 average level of 120,300 or FALL by 33,000. The average weekly earnings of all employees engaged in mining and logging in the U.S. are $1,581, which works out to $82,212 per year. So, if OPEC Plus maintained its current output of crude oil and this resulted in a loss of 33,000 U.S. oil and gas drilling jobs, this would represent a total wage-bill loss of $2.713 billion in round numbers.

Now, let's assume that U.S. imports of crude oil increase because of the lost U.S. output from these 33,000 laid off oil and gas drilling workers. In 2019, the U.S. imported 2.374 billion barrels of crude oil, the lowest since 1992. Given that demand has fallen in 2020 due to the coronavirus, let's assume that we import the same amount in 2020. How large a tariff would we have to impose on imported crude to make those assumed 33,000 laid off oil and gas drillers whole? About $1.14 per barrel. If U.S. imports of crude oil were to rise because of the shutdown of domestic drilling operations, the tariff per barrel of oil could be even less than $1.14 per barrel to make 33,000 unemployed oil and gas drilling workers whole.

If the goal is to Keep America Great, it is beyond me why the president of the United States would want to suppress the production of oil by OPEC and Russia, a POSITIVE supply shock, whilst the U.S. is experiencing a massive NEGATIVE supply shock from the coronavirus. Impose the $1.14 per barrel tariff and use the proceeds of the tariff to compensate the 33,000 oil and gas drilling workers during their unemployment. Would not this make more sense than sponsoring a plan to punish the vastly larger nonoil part of the economy by a reduction in the supply of crude oil? A few weeks ago President Trump suggested that the federal government should purchase cheap oil in the open market and use it to fill the Federal Strategic Petroleum Reserve. (I wonder if the states would be allowed to use any of this federal oil stockpile if they needed it?) Making unemployed oil and gas drilling workers whole through a small tariff and purchasing oil in the open market to fill the SPR make more sense to me than encouraging OPEC Plus to cut production.

Viewpoint commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
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On April 12, 2020, OPEC, Russia, the U.S. and some other oil-producing nations reached an agreement to cut the global production of crude petroleum, which, according to Reuters, reduce the global crude supply by 20%. Immediately after [...]

Does Encouraging OPEC to Cut Production Help Keep America Great?

Robert Brusca

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<a href="/comment/200413e.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200413e.png" align="left"></a>
Globally the theme is corona, corona, corona. The virus and its progression dominates everything. Economists defer their forecasting to the whims of policymakers led by epidemiologists. But in the end, there remains a steady drumbeat of eco-data to be digested, analyzed and put in perspective. Portugal's March CPI and HICP results show tame inflation. Tame inflation trends. And little to worry about on the inflation front... At least that's for now.

Portuguese inflation trends 
Portugal's chart shows inflation ripping up to 4% back in 2011 in the wake of the Great Recession for a period subsequent to one that showed prices falling. Indeed Portugal's prices fell again in 2014 very briefly and since then they have been in a range. But for a few very brief spikes, inflation has kept below the ECBs overarching 2% ceiling. Since end-2010 despite 2011 being an inflation balloon year, inflation in Portugal has run at a compounded annual rate of 1.2% - quite mild.

Currently, inflation is 0.1% over 12 months for both the HICP and domestic gauge with the core pace as 0.1% over 12 months as well.

Portugal's success 
Portugal is a country once beset with inflation problems that has tamed its inflation beast. The inflation situation globally has settled back as most international reserve currency areas have controlled inflation. Portugal's own trends show inflation as low, steady without acceleration and with widespread trends of moderation. Inflation diffusion gauges are mostly low showing diffusion in the last three months in a range of 33% to 58% or on sequential trends in a range of 41% to 58%. The recent diffusion metrics are low and the one of 12-month inflation diffusion is at 41.7%. The diffusion gauge tells that inflation is decelerating in more categories than it is accelerating. Values below 50% show more deceleration; values above 50 show relatively more acceleration; generally diffusion is above 60% when inflation is on the move.


<img border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200413.png" width="660" height="290">


Eco weakness implies weak prices 
Globally central banks and government programs are trying to stave off the effects of economic weakness that are the result of actions taken to stem the spread of the coronavirus. And in the wake of this weakness, prices have been tame in part because oil prices have collapsed. The oil story is one of a two-way problem: weak and falling demand coupled with the deadly sin of excess supply. Over the weekend, OPEC, the Saudis and Russia struck an agreement for sharp reductions in output. But markets are not reacting to it much because demand remains so weak. Even deep output cuts are having a hard time reassuring markets that oil prices can and will firm. That, of course, keeps inflation and inflation expectations low.

Two-pronged inflation risk 
Inflation is caught in all of this on a strange two-way street. The Fed and the ECB face similar challenges. Over the weekend, we heard Fed Vice Chair Richard Clarida emphasize that the Fed has all the firepower it needed to avoid deflation. Meanwhile, in a release last week, U.S. inflation expectations, that are still quite low, had started to rise. So inflation is in this odd place where there are both fears of near-term deflation and concerns that all this stimulus will bring inflation later.

Of course, no country's current inflation report is going to shed much light on this multidimensional issue. But that does not make it less real or less of a concern. If countries do not find a way to support their economies while fighting off the contagion of the coronavirus, they are going to find that concerns about deflation are real. Regardless of reassuring words from central banks or policymakers if economies implode prices fall.

The virus and growth 
Beyond that everything we think, or think we know, about the economy is speculative. This is because we do not know about the spread of the virus and there is a risk of a second wave if countries opt out of their restrictive modes too soon and if they do not continue to take other steps to contain contagion as they normalize their economies. There was more news overnight from South Korea that has reported another group of people, who had the virus and had recovered, have it again. This is cause for concern because it raises the question of immunity. If you have the virus once, can it reignite spontaneously? Or, if having had it once doesn't cause the creation of antibodies sufficient to protect a person from a second exposure that would be news, too. (and not good news). Because of this new finding in South Korea and because we are still amassing data on who is most at risk, steps to normalize remain risky. But the costs of keeping lockdowns engaged are substantial too. So far, there has been no attempt to bridge the gap between the two and find an equilibrium position between how long to shut down and when to start up. Epidemiologists Rule! And so far, the death rate among the infected is still contained around 1% to 1.3% with the old and persons with certain preexisting conditions most at risk – and other at a very, very, low risk of death. It is possible to flip the switch on growth and still protect at-risk groups. It just does not seem that anyone anywhere has done it. Public policy so far is a blunt instrument of restricting nearly everybody (except essential workers) or nobody. It seems to me that that will have to change.


</html>

Globally the theme is corona, corona, corona. The virus and its progression dominates everything. Economists defer their forecasting to the whims of policymakers led by epidemiologists. But in the end, there remains a steady drumbeat [...]

Portuguese Prices Fall in March; Annually Prices Barely Rise

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&bull; Commodity prices weaken broadly.

&bull; Declines most pronounced in petroleum &amp; oil products group.


The Industrial Materials Price Index from the Foundation for
International Business and Economic Research (FIBER) declined 9.9% during the
last four weeks and 19.2% over the last year. The price index fell to the lowest
level since June 2009.

Prices in the crude oil &amp; benzene group declined
by nearly one-quarter during the last four weeks as WTI crude oil prices
weakened to $25.75 per barrel, down from a high of $61.92 in the first week of
January. Prices of petro-chemical benzene fell by over one-half in the last four
weeks (-53.9% y/y). Excluding crude oil, industrial commodity prices declined
9.2% during the last four weeks and were off 15.7% over the last year.

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Prices in the miscellaneous group declined 9.8% over
the last four weeks as framing lumber costs declined 22.3% over that period.
Plywood prices held steady but were 11.2% lower over the last year. The price of
natural rubber declined 12.0% during the last four weeks. Metals prices
fell 9.8% in four weeks, reflecting a 13.8% decline in aluminum prices, while
steel scrap prices fell 10.7% over four weeks. The cost of copper scrap fell 10.5%.
Zinc prices fell 3.9% in four weeks (-36.3% y/y) and the cost of lead declined
8.5% in four weeks (-14.8% y/y). Textile prices weakened 2.4% in four
weeks led by a 14.8% drop in the cost of cotton to nearly the lowest level since
April 2006. This decline was countered by a 0.9% rise in the cost of burlap,
which improved 1.1% y/y.

The U.S. factory sector has weakened with the onset of the
coronavirus, pushing prices lower. Raw steel production fell 7.9% (SA, -20.4%
y/y) early in April and lumber production fell throughout the month of March.
During the last ten years, there has been a 66% correlation between the y/y
change in industrial commodity prices and the y/y change in factory sector production.

Commodity price data can be found in Haver's DAILY,
WEEKLY, USECON and CMDTY databases. The NABE forecast is in the SURVEYS database.

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <tbody>
 <tr>
 <th class="firstcol" scope="col" >FIBER Industrial Materials
 Price Index (%)</th>
 <th scope="col" >1-Mth</th>
 <th scope="col" >3-Mth</th>
 <th scope="col" >6-Mth</th>
 <th scope="col" >12-Mth</th>
 <th scope="col" >2019</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 </tr>
 </tbody>
 <tbody>
 <tr>
 <td class="firstcol" >All Items</td>
 <td>-9.9</td>
 <td>-15.3</td>
 <td>-12.0</td>
 <td>-19.2</td>
 <td>1.1</td>
 <td>-12.0</td>
 <td>6.7</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" >&nbsp; Excluding Crude Oil</td>
 <td>-9.2</td>
 <td>-11.6</td>
 <td>-8.8</td>
 <td>-15.7</td>
 <td>-0.6</td>
 <td>-11.1</td>
 <td>4.9</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" >&nbsp;Textiles</td>
 <td>-2.4</td>
 <td>-4.2</td>
 <td>-1.8</td>
 <td>-6.3</td>
 <td>-1.6</td>
 <td>-2.8</td>
 <td>3.0</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Cotton (cents per pound)</td>
 <td>-14.8</td>
 <td>-26.9</td>
 <td>-18.6</td>
 <td>-34.1</td>
 <td>-6.6</td>
 <td>-9.2</td>
 <td>9.8</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" >&nbsp;Metals</td>
 <td>-9.8</td>
 <td>-17.1</td>
 <td>-13.4</td>
 <td>-24.6</td>
 <td>-4.3</td>
 <td>-12.2</td>
 <td>18.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Aluminum ($ per metric ton)</td>
 <td>-13.8</td>
 <td>-19.1</td>
 <td>-16.6</td>
 <td>-22.5</td>
 <td>-6.5</td>
 <td>-12.7</td>
 <td>26.0</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Copper Scrap (cents per
 pound)</td>
 <td>-10.5</td>
 <td>-19.2</td>
 <td>-12.4</td>
 <td>-23.2</td>
 <td>3.5</td>
 <td>-16.1</td>
 <td>29.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Steel Scrap ($ per ton)</td>
 <td>-10.7</td>
 <td>-19.2</td>
 <td>1.8</td>
 <td>-22.3</td>
 <td>-0.8</td>
 <td>2.3</td>
 <td>16.8</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" >&nbsp;Crude Oil &amp; Benzene</td>
 <td>-21.4</td>
 <td>-40.2</td>
 <td>-35.9</td>
 <td>-38.8</td>
 <td>20.2</td>
 <td>-20.0</td>
 <td>8.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Crude Oil (WTI, $ per Barrel)</td>
 <td>-20.1</td>
 <td>-58.4</td>
 <td>-51.3</td>
 <td>-59.7</td>
 <td>35.5</td>
 <td>-24.4</td>
 <td>10.9</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" >&nbsp;Miscellaneous</td>
 <td>-9.8</td>
 <td>-7.8</td>
 <td>-5.1</td>
 <td>-12.9</td>
 <td>-0.0</td>
 <td>-14.8</td>
 <td>-0.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Framing Lumber ($ per 1000
 board ft.)</td>
 <td>-22.3</td>
 <td>-27.8</td>
 <td>-21.9</td>
 <td>-20.4</td>
 <td>22.6</td>
 <td>-23.1</td>
 <td>20.0</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Natural Rubber (cents per
 pound)</td>
 <td>-12.0</td>
 <td>-11.8</td>
 <td>0.7</td>
 <td>-16.6</td>
 <td>10.7</td>
 <td>-4.1</td>
 <td>-29.6</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

• Commodity prices weaken broadly. • Declines most pronounced in petroleum & oil products group. The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) declined 9.9% during [...]

FIBER: Industrial Commodity Prices Decline as the Factory Sector Weakens

Next year's inflation forecasts are on the rise and above target

Disrupted global supply chains placing upward pressure on US goods prices

Construction of data centers has overtaken transportation construction in US

Elevated energy prices putting intense upward pressure on input prices around the globe

US is big leader in global surge in private AI investment

Larger-than-usual income tax refunds this year are supporting consumer spending

Sharply rising share of AI-related jobs

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

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260622E.jpg

Danish consumer confidence rose to -14 in June from -19.8 in May, a small pickup for a still-negative net reading. In June, the reading has a standing at its 7.9 percentile on data back to 1995. So, this confidence headline still has a lower 8% reading overall.

On the month, all seven component readings improved compared to May, although the environmental assessments were little changed across four components. As for the environment, the most changed reading is the improved favorability of the time to save, a metric that is not always a positive category.

As for the seven categories, the readings on the financial situation, general economy and the unemployment rate all improved month-to-month, while the inflation metrics both backed down sharply.

These changes show the financial situation and general economy gauges all at rankings in the lower 20th percentiles, with the outlook for the next 12 months having a standing in their lower 10th percentiles and lower for both the financial situation and the general economy.

Consumer prices, despite a strong monthly step-back, have a 90.2 percentile standing for prices over the past 12 months and a 94.3 percentile standing for the CPI over the next 12 months. Despite some let-up in concerns about unemployment, the unemployment gauge has an 85.1 percentile standing, still substantially elevated.

The environmental readings are less negative, starting with the ‘favorability of the time to purchase,’ a bit weaker month-to-month but improved on balance over two months. The June reading is slightly better than its 12-month average but still has a ranking only in its 21st percentile. The favorability of the time to purchase over the next 12 months is a tick weaker month-to-month and about a point worse than its 12-month average. Its June ranking is in its lower 10th percentile of its historic queue. The favorability of the time to save has a stronger ranking, but this is a more equivocal category. It is improved month-to-month and only slightly stronger over two months The June reading is stronger than its 12-month average, with a ranking in its 47.6 percentile—improved compared to previous categories but still worse than its historic median since 1995 (the median occurs at a ranking of 50%). The ‘general financial situation of households now’ ticked lower in June from May but is stronger on balance over two months. The June reading is above its 12-month average and has a 59.2 percentile standing—above its median.

On balance, Denmark shows improving confidence, progressing slowly but on the right path. There is a sharp downward adjustment in inflation, especially over the next 12 months, despite global conditions. Still, the ranking of the confidence metrics are uniformly weak.

260622.jpg

Denmark

Danish Confidence Improves As Inflation Expectations Pull Back Sharply

Andrew Cates

**US Outperformance Holds; Europe and China Continue to Disappoint**
One of the most persistent features of the global macro landscape in 2026 has been the widening divergence between growth outcomes in the United States and those in Europe and China. Citigroup’s global growth surprise indices—which measure the gap between actual economic releases and consensus expectations—capture this divergence with unusual clarity. US data have continued to surprise on the upside, supported by resilient consumer spending, a stronger-than-expected labour market and the ongoing AI-driven capital spending boom. The picture elsewhere is less encouraging. Growth surprises have turned negative across the euro area, reflecting the cumulative toll of elevated energy costs, weak industrial activity and subdued business confidence. And China's growth surprise index has also fallen sharply in recent weeks, with weaker-than-expected retail sales and fixed asset investment data for May this week reinforcing concerns that domestic demand remains fragile and that policy support is yet to gain meaningful traction.

260618Z1.jpg

**The Oil Risk Premium in the UK Has Been Fading**
One of the more notable features of UK markets this year has been the close relationship between oil prices and two-year gilt yields. The link is not mechanical, but in an economy heavily exposed to imported energy, swings in oil prices can materially alter the inflation outlook and, by extension, expectations for Bank of England policy. That relationship was on display again this week. A softer-than-expected UK CPI reading for May—helped in part by easing energy price pressures—led investors to scale back expectations that inflation would remain persistently above target, pushing two-year gilt yields to their lowest level in six weeks. The question now is whether this marks the start of a more sustained easing in inflation pressures or merely a temporary reprieve. Much will depend on whether the recent decline in oil prices following the US-Iran ceasefire agreement proves durable.

260618Z2.jpg

**The AI Investment Boom Is Rewriting the Rule Book for the Chip Industry**
If the divergence in global growth surprises noted above tells a story of a world economy under strain, the semiconductor sales data tell a very different one — of a technology-driven investment cycle that is accelerating almost regardless of the broader macro environment. Global semiconductor sales have surged to record levels over the past twelve months, driven primarily by insatiable demand for the chips that underpin AI infrastructure: graphics processing units, high-bandwidth memory, and advanced logic chips. Data centre capital expenditure from the hyperscalers continues to exceed even the most optimistic forecasts from a year ago, and the investment pipeline shows no sign of moderating. The gains are concentrated in AI-adjacent products; legacy chips for consumer electronics and industrial applications remain relatively soft.

260618Z3.jpg

**Copper Holds Firm As Oil Retreats**
The commodity markets are telling two quite different stories this week, and the contrast is instructive. Oil has moved sharply lower on the US-Iran MoU news as investors trim the conflict risk premium that has been embedded in energy markets since March — a welcome development for inflation and central bank optionality alike. But the three commodities shown in this chart tell a different story. Copper, one of the most reliable proxies for global electricity infrastructure investment, remains near multi-year highs, reflecting the extraordinary volume of data centre construction, grid expansion and electrification spending flowing through the global economy. Aluminium — energy-intensive to produce and increasingly in demand for the structural components of both data centres and electric vehicles — has, until quite recently, held its ground. Lithium hydroxide, the battery-grade refining product that sits at the heart of the energy storage supply chain, has seen some cyclical softness but remains structurally underpinned by the scale of demand being projected for grid-scale storage and electric mobility over the next decade.

260618Z4.jpg

**Is Energy Availability a Binding Constraint on Growth?**
This next chart is a scatter plot that maps electricity generation per capita against GDP growth per capita across a broad sample of countries over the past five years. The positive relationship is striking. Economies with higher electricity generation per capita, including the United States, have generally delivered stronger GDP growth, while those with more constrained electricity systems have tended to lag. The obvious objection is reverse causality: richer economies generate more electricity because they have more to power. That is partly true. But the broader evidence is difficult to dismiss. The US shale revolution delivered an abundance of cheap energy that supported a sustained period of industrial outperformance relative to many advanced economies. Mainstream commentary often attributed this advantage to factors such as labour market flexibility or technological innovation, but energy costs were arguably at least as important.

260618Z5.jpg

**Corporate America Is Investing from a Position of Unusual Financial Strength**
The surge in US corporate investment—particularly in AI infrastructure, data centres and semiconductors—has inevitably drawn comparisons with the late-1990s dot-com boom. Yet the financial balance data suggest an important difference. During the dot-com era, US non-financial corporates moved into a financial deficit approaching 4% of GDP, relying heavily on external financing to fund investment. Today, despite another ambitious investment cycle, the sector remains in surplus, currently around 1.8% of GDP. Corporate America is investing aggressively, but it is still generating more cash than it is spending. The boom is being financed largely through profits rather than debt. Risks remain—not least the growing fiscal burden on the federal government—but the balance-sheet fragilities that turned previous investment booms into systemic crises appear far less pronounced. If a major constraint emerges in the years ahead, it may be energy and resources rather than leverage.

260618Z6.jpg

The signing of a Memorandum of Understanding (MoU) between the United States and Iran earlier this week has offered financial markets their most significant moment of geopolitical relief since the Middle East conflict escalated in early March. Oil prices fell sharply on the news, short-dated bond yields moved lower across several major economies, and risk assets recovered ground. But relief, as investors have learnt repeatedly over the past three months, is arguably not the same as resolution. The MoU sets a framework for negotiations rather than a final settlement, and the history of US-Iran diplomacy is not one that encourages complacency. Meanwhile, the Federal Reserve — concluding its June meeting yesterday under new chair Kevin Warsh — held rates steady but delivered a distinctly hawkish dot plot that shifted the median year-end projection from a cut to a hike, a reminder that the easing cycle the market had been pricing is no longer the base case. Against this backdrop, this week's charts take stock of where the global economy presently stands — and what the underlying data, beneath the geopolitical noise, are telling us. The picture that emerges is one of divergence. The United States continues to outperform consensus growth expectations while Europe and China disappoint (chart 1). UK short-dated yields have tracked oil prices with unusual consistency this year, and today's softer-than-expected CPI print for May — arriving just as the MoU has knocked crude lower — potentially changes the policy calculus for the Bank of England (chart 2). Global semiconductor sales, meanwhile, are storming ahead regardless of the geopolitical noise, powered by AI infrastructure spending that shows no sign of fatigue (chart 3). A cross-section of commodity prices tells two stories simultaneously: the geopolitical risk premium is draining out of oil, but the metals and materials the AI economy actually needs — copper, uranium, critical minerals — are holding firm (chart 4). Meanwhile a cross-country scatter of electricity generation and GDP growth over the past five years raises a question that deserves more attention than it typically gets: is energy availability a constraint on growth, or merely a consequence of it? The evidence, we would argue, points firmly in one direction (chart 5). And finally, for all the comparisons being drawn between the current investment boom and the late 1990s, the financial balance of the US corporate sector tells a rather different story — one that matters for how any correction might unfold (chart 6).

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/7rw2v1Ri8gUVHbFrZfgANL?utm_source=generator&si=75d98727e9524d75" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Between Relief and Reality

Winnie Tapasanun

260618N12.jpg

260618O12.jpg

The current general activity diffusion index rebounded to a slightly stronger-than-expected 10.3 in June following a 27.1-point drop to -0.4 in May, the latest Manufacturing Business Outlook Survey (MBOS) from the Federal Reserve Bank of Philadelphia showed, indicating a return to expansion in manufacturing activity in the Third Federal Reserve District this month. A reading of 10.0 for June had been expected by the Action Economics Forecast Survey. June marked the fifth m/m increase in six months, showing a sharp improvement from -1.4 in June 2025. In June, 32.1% of firms reported increases in current general activity (up from 22.5% in May), while 21.9% reported decreases (down from 22.9%); 45.4% reported no change (down from 54.6%). Survey responses were collected from June 8 to June 15.

Haver Analytics calculates an ISM-adjusted current activity diffusion index from five key components using the methodology along the lines of the national ISM index. The index rose to 53.1 in June after a 4.8-point decline to a contraction-level 49.7 in May, indicating manufacturing activity expanded for the third time in four months; it was slightly above 51.0 in June 2025.

In the latest survey, the new orders index surged to 27.3 in June following a 34.7-point plunge to -1.7 in May, signaling new orders expanded for the sixth time in seven months. The shipments index rebounded to 14.9 this month from 4.9 in May, registering the seventh consecutive expansion. The unfilled orders index advanced to 10.5 from -2.5, indicating expansion for the first time since July 2025 and the highest level since January 2025. In contrast, the inventories index dropped to -8.5 in June from 6.6 in May, showing inventories contracted for the second time in three months and at the lowest level since July 2024. Meanwhile, the delivery times index increased to -2.6 this month from -10.4 in May (the lowest reading since March 2024).

On the labor front, the number of employees index climbed to 7.9 in June from -2.8 in May, indicating employment expanded for the first time in three months and at the highest level since January. In June, a higher 17.0% of respondents reported increases in employment, while 9.2% reported declines; 73.8% reported no change in employment levels. The average employee workweek index fell to -6.5 this month, the first negative reading and lowest since February, from 1.2 in May.

Inflation indicators were mixed in June. The prices paid index rose to 53.2 this month following an 11.4-point drop to 47.9 in May. A higher 53.5% of respondents reported increases in input prices in June, while only 0.4% reported decreases. The prices received index fell to 20.3, a four-month low, after a 7.2-point May decline to 26.3. In June, 20.3% of respondents reported increases in prices received, while 0.0% reported decreases.

The future indexes remained in positive territory, signaling continued overall growth over the next six months, with most future indicators rising. The future general activity diffusion index edged down to 50.2 in June from 53.2 in May, staying positive since February 2024. Future indexes for new orders (60.8 vs. 53.5) and shipments (60.3 vs. 45.7) increased in June (vs. May) and remained positive. Notably, the future capital expenditures index rose to 41.2 this month, the highest level since June 2021, from 30.9 in May. The following future indexes slipped in June (vs. May) but stayed in positive territory: employment (30.8 vs. 31.7), unfilled orders (17.3 vs. 19.2), and inventories (10.0 vs. 11.8). Prices continued to increase, with the future prices paid index easing to a still-elevated 63.2 in June from 70.0 in May and the future prices received index rising to 67.2, the highest level since August 2021, from 60.5.

The Manufacturing Business Outlook Survey (MBOS), conducted by the Federal Reserve Bank of Philadelphia, is a monthly survey of manufacturers in the Third Federal Reserve District. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants. The diffusion indexes in the MBOS represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. The indexes range from -100 to +100 with positive values indicating an increase in activity. The series from the survey dating back to May 1968 can be found in Haver’s **SURVEYS** database. The expectations forecast figures are from the Action Economics Forecast Survey in **AS1REPNA**.

260618P12.jpg

260618Q12.jpg

- Current General Activity Index up 10.7 pts. to 10.3 in June; fifth rise in six months.
- New Orders (27.3), sixth expansion in seven mths.; Shipments (14.9), seventh straight expansion; Unfilled Orders (10.5), first expansion since July ’25.
- Employment (7.9), a five-month high after two mths. of contraction.
- Inflation indicators: Prices Paid up (53.2); Prices Received down (20.3, a four-month low).
- Future General Activity Index down to a still-expansion-level 50.2; most subindexes up and positive; future price indexes remaining above long-run avgs.

U.S. Philadelphia Fed Index Returns to Positive Territory in June

260618E.jpg

Unemployment in the European Monetary Union stayed at 6.3% in April, just a tick above its all-time low. In the more inclusive EU, the unemployment rate hovered at 6%, just two tenths of a percentage point above its all-time low. Unemployment conditions in the monetary union remain low without many signs of acceleration.

The unemployment rate in April fell in Italy, Ireland, Greece, Portugal, and the Netherlands. The unemployment rate increased month-to-month in Finland.

In March, the unemployment rate declined in Austria, Belgium, Germany, Finland, Italy, and the Netherlands. It rose month-to-month in Greece and Luxembourg.

Over three months, the unemployment rate in these 12-early reporting monetary union members fell in five countries: Belgium, Germany, Italy, Ireland, and the Netherlands. In contrast, unemployment rose in five countries: Portugal, Greece, France, Finland, and Austria.

Over six months, unemployment rates fell in six countries: the Netherlands, Portugal, Italy, Germany, Belgium, and Austria. This was against increases in six countries: Greece, Finland, France, Luxembourg, Spain, and Ireland.

Year over year, the degree of inflation progress is much thinner, with the unemployment rates falling in only three countries Italy, Spain, and Portugal with increases in unemployment for all the other countries in the table.

Unemployment rates continue to rank low in the monetary union, with only three monetary union countries having their unemployment rates ranked above 50%, putting them above their respective medians on data back to the year 2000. Those three countries are Luxembourg, Finland, and Austria. For the remaining countries, the rankings of their unemployment rates over this period are not even as high as their 30th percentiles. Italy, at present, is experiencing its lowest unemployment rate of the period.

Unemployment conditions in the monetary union remain solid. The past two weeks were significant for monetary policy and global economics, with the ECB raising rates, Japan raising rates, and the United States keeping rates unchanged but moving away from an easing bias in policy that had been in effect for quite a number of months. Today the Bank of England, after experiencing some significant inflation progress, decided to keep its policy on hold for another session. An agreement between the U.S. and Iran securing an opening of the Strait of Hormuz was signed, paving the way for potentially improved oil flows, lower inflation, and less uncertainty in the period ahead.

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Europe

EMU Unemployment Remains Low

Sandy Batten

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Total retail sales rose a much larger-than-expected 0.9% m/m (6.9%y/y) in May following a slightly downwardly revised 0.4% monthly gain in April (previously 0.5% m/m), according to data released by the U.S. Census Bureau. The Action Economics Forecast Survey looked for a 0.5% m/m gain. Excluding autos, other sales increased 0.8% m/m (7.5% y/y) after an unrevised 0.7% m/m increase in April. Expectations were for a 0.5% monthly rise.

Elevated retail gasoline prices continued to boost the value of gasoline sales in May. Gasoline sales increased 3.4% m/m (26.5% y/y) in May on top of a 2.8% m/m increase in April. However, both monthly increases were slower than the 14.2% monthly jump reported in March. Gasoline sales accounted for 31% of total sales in May. However, sales were solid even without gasoline sales. Total sales excluding gasoline rose 0.7% m/m in April, up from 0.2% m/m in April. Sales excluding both autos and gasoline increased 0.5% m/m in May, the same monthly gain as in April.

The control group of sales (total sales excluding food services, autos, gasoline and building materials that the BEA uses to construct PCE in the national accounts) posted another solid increase in May, rising 0.7% m/m (6.3% y/y) following an unrevised 0.5% monthly increase in April. The strong performance at the end of Q1 followed by solid gains in April and May put the April-May level of control group sales up 8.6% at an annual rate from the Q1 average, pointing to another solid contribution by consumption to overall GDP growth in Q2. Consumer spending remains surprisingly resilient notwithstanding the recent hit to disposable income from the marked increase in energy prices.

Sales generally increased across major sectors in May. Auto sales rebounded, rising 1.2% m/m in May and more than reversing the 0.9% monthly decline in April. This was the third gain in auto sales in the past four months. Furniture sales rose 1.0% m/m but sales at electronics and appliance stores slipped 0.5% m/m. Building material sales gained 1.0% m/m on top of a 1.1% monthly increase in April. Clothing sales rose 0.3% m/m. Sales at general merchandise stores gained 0.4% m/m in May. Miscellaneous sales jumped 2.3% m/m in May, their first monthly gain in three months. Sales by nonstore retailers continued their strong performance, increasing 1.5% m/m in May on top of a 1.1% monthly rise in April. Over the first five months of this year, nonstore retail sales have risen 7.2%, not annualized. By contrast, food sales were unchanged in May from April while sales at restaurants edged down 0.1% m/m in May, their first monthly decline in four months.

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Total sales increased 0.9% m/m in May, nearly twice expectations.
- Auto sales rebounded, rising 1.2% m/m in May, more than reversing a 0.9% monthly decline in April. 
- Gasoline sales rose 3.4% m/m in May.
- Excluding auto and gasoline sales, remaining sales increased by a solid 0.5% m/m in May, the same monthly increase as in April.
- Sales of the retail control group that is used to construct PCE rose 0.7% m/m in May and are 8.6% annualized above the Q1 average.

Economy in Brief

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