Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>

	 
 
 
 
 

<a href="/comment/200401e.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401e.png" align="left"></a>
Of the eighteen observations on manufacturing PMIs in Table 1, only two entries China and Taiwan improve month-to-month (India and Mexico are ‘unchanged on the month because we use their data from February to fill out the table since they have not reported fresh data for March).

This month the Asian region weakened overall, but it is not as weak as the EMU where Germany slipped considerably on the month; in Asia China mounted a huge one-month rebound. We take only simple averages in the table of the data and do not weight them for GDP. So China’s impact on the Asia total is small.

What is clear is how breadth has slipped. Over three-month, six-month, and 12-month, Europe skipped along on readings just below 47 with Asia riding a trend of diffusion between 49 and 50, indicating only mild setbacks in manufacturing. In March, Asia has slipped to a reading of 47.4 with the euro area (a weighted statistic) at 44.5. The impact of the coronavirus on output has been spreading.

There are a few surprise statistics this month. For example, Italy and the EMU region both recorded lower rates of unemployment. For the EMU, it is the lowest rate since the Great Recession. However, we know what else is happening there as the virus spreads and that unemployment reading will not stand. Germany also recorded a surprising strong gain in retail sales for the second month in a row. That is another trend that will not stand. The PMI data sketch a clear picture of weakness and weakening with the notable exception of China and Taiwan.

What is not yet clear is how weak conditions are going to get. A month ago, the Chinese PMI was a real eye opener – a shocker- with its manufacturing gauge falling to 40.3 and with the services reading even weaker. But this month, China is back above 50 showing an amazing manufacturing recovery. Part of this is in the nature of PMI data that focus on the breadth of month-to-month changes instead of on strength. In all likelihood, the Chinese data do not indicate that the Chinese economy is really back to where it was before the coronavirus sucker-punched it. PMIs are not the best or most comprehensive economic indicators, but they are telling and often early indicators of the next turn of the economy.

The 12-month to six-month to three-month progression shows France, Japan, China, Brazil, and Vietnam getting progressively weaker on that timeline. Only Turkey is getting progressively stronger.



If we look broadly at the distribution of readings for the 18 countries and the euro area in Table 1, we can see greater weakness over the last year than over the previous 12 months. Conditions are worsening over the last three months and then getting decidedly weaker in March. PMI readings in the 50 to 55 range are relatively normal. They signal mild increases in output. As signals rise above 55 they are showing considerable strength. Readings below 50, of course, signal contraction in manufacturing. The past four years have been ‘difficult’ with 32% of the PMI readings in the 40-to-50 cohort, indicating output declines have been lingering and pervasive for a significant number of reporters. But there have also been about 10% of the reporters with heated up activity above 55. However, that sort of strength has not been seen since January. There are no countries in that cohort for the last two months. The fall-off seems more severe because over the previous 12 months the global economy has heated up. Over the last 12 months it has been slipping and now it is being dragged down by the coronavirus attenuation policies independent of the economic cycles it was previously running. Because of ongoing economic lockdowns and social distancing, we expect conditions globally to get much worse.



Table 1 also gives queue rankings that place this month’s reading in a queue of data back to January 2016. Ranked in this way the current readings are nothing short of abysmal. India has a relatively high ranking, the only ranking above its 50th percentile (50% marks an entry’s median gain for the period). India’s reading is at a very high 94th percentile, but only on a relatively modest diffusion reading of 54.5 (representing actual data from February). The euro area, France, the U.S., Canada, Indonesia, Vietnam and South Korea all are sitting on their respective weakest readings of this entire period. And there is probably a lot more weakness to come.


<a href="/comment/200401x.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401x.png" align="left"></a>
Trade tends are still dead-to-muted 
The global economy is all but coming to a standstill as output pauses when people stay shuttered in their homes and do as little as they can to engage their neighbors. There is also a death toll that has struck more people with re-existing conditions and old people especially those in their 80s. The coronavirus is still rampaging and has yet to turn the corner in the U.S. and other places. China seems relatively corona-free; there have been no new indigenous cases reported in Wuhan; Still, China is watching its boarder closely since travelers are still a risk.

Fewer economists are looking for that fabled ‘V’ shaped recovery once it comes. It is clear that recovery from the virus will not be sudden; it will be stepwise. There will be careful actions taken to ensure there is not backsliding. That sort of re-engagement suggests that growth will get back to trend more deliberately rather than speedily. The timing for getting control of the virus is still uncertain. Health officials are still wary of a second wave or a second rising. That fear has led to the adoption of longer confinement periods (shelter-in-place). There is still a lot unknown. Testing is still ramping up globally. Getting an accurate, quick, diagnosis will be an important way to get control of this nefarious ‘stealth virus that is highly contagious and spreads when people are asymptomatic. Progress is being made, but it is hard to handicap that and that means it is impossible to make any reasonably confident economic forecast. Take care, one and all. If you are in good health and you are young, you are not at much risk. In that case, be careful of your behavior around the old who could die from an exposure that might not even debilitate you.



</html>

Of the eighteen observations on manufacturing PMIs in Table 1, only two entries China and Taiwan improve month-to-month (India and Mexico are ‘unchanged on the month because we use their data from February to fill out the table since [...]

Markit PMIs Fall and Show Weakness in March

Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/200401n.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401n.png"></a>
 <a href="/comment/200401o.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401o.png"></a>

&bull; Broad-based component declines led by fewer new orders.


&bull; Pricing power falls sharply.


&bull; Most readings move below the break-even level of 50.


Activity in the factory sector weakened just slightly last
month despite the onset of the coronavirus. The Institute for Supply Management
(ISM) reported that its composite index of manufacturing sector activity for
March fell to 49.1 after easing to 50.1 in February. A reading of 50.5 had been
expected in the Action Economics Forecast Survey. During the last 15 years,
there has been a 68% correlation between the composite index and the quarterly
change in real GDP.

The new orders index fell to 42.2, its lowest level since
March 2009. The production measure also fell sharply to 47.7, down versus the
cycle high of 64.2 in January 2018.

Also declining to its lowest point since May 2009 was the
employment measure to 43.8. Just nine percent (NSA) of respondents reported
higher payrolls while 21% reported a decline. During the last 15 years, there
has been 80% correlation between the employment index and the m/m change in
factory sector payrolls.

The supplier delivery measure surged to 65.0 from 57.3,
indicating the slowest product delivery speeds since June 2018. Holding fairly
steady m/m at 46.9 was the inventory index, but that was down from 53.9 in
August 2018.

The prices paid index declined sharply to 37.4 (NSA), its
lowest point since January 2016. Only 12% of respondents reported higher prices
while 37% reported a decline.

Other series in the ISM report indicated weakness. The export
order measure fell to 46.6, the lowest point in six months and down from a high
of 62.8 in February 2018. The import series fell to an expansion low of 42.1 and
the order backlog measure fell to 45.9 from 50.4 twelve months earlier.

The ISM figures are diffusion indexes where a reading above
50 indicates expansion. 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.

<a href="/comment/200401p.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401p.png"></a>
 <a href="/comment/200401q.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401q.png"></a>

<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" >ISM Mfg (SA)</th>
 <th>Mar</th>
 <th>Feb</th>
 <th>Jan</th>
 <th>Mar'19</th>
 <th>2019</th>
 <th>2018</th>
 <th>2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Composite Index</td>
 <td>49.1</td>
 <td>50.1</td>
 <td>50.9</td>
 <td>54.6</td>
 <td>51.2</td>
 <td>58.9</td>
 <td>57.4</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;New Orders</td>
 <td>42.2</td>
 <td>49.8</td>
 <td>52.0</td>
 <td>55.5</td>
 <td>51.1</td>
 <td>61.6</td>
 <td>62.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Production</td>
 <td>47.7</td>
 <td>50.3</td>
 <td>54.3</td>
 <td>55.1</td>
 <td>51.2</td>
 <td>60.9</td>
 <td>60.9</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Employment</td>
 <td>43.8</td>
 <td>46.9</td>
 <td>46.6</td>
 <td>57.1</td>
 <td>50.9</td>
 <td>56.9</td>
 <td>56.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Supplier Deliveries</td>
 <td>65.0</td>
 <td>57.3</td>
 <td>52.9</td>
 <td>54.9</td>
 <td>52.9</td>
 <td>62.0</td>
 <td>56.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Inventories</td>
 <td>46.9</td>
 <td>46.5</td>
 <td>48.8</td>
 <td>50.6</td>
 <td>49.8</td>
 <td>52.9</td>
 <td>50.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Prices Paid Index (NSA)</td>
 <td>37.4</td>
 <td>45.9</td>
 <td>53.3</td>
 <td>54.3</td>
 <td>49.1</td>
 <td>71.7</td>
 <td>65.0</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

• Broad-based component declines led by fewer new orders. • Pricing power falls sharply. • Most readings move below the break-even level of 50. Activity in the factory sector weakened just slightly last month despite the onset of the [...]

ISM Manufacturing Index Weakens in March

Gerald D. Cohen

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/200401f.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401f.png"></a>
 <a href="/comment/200401g.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401g.png"></a>

&bull; Construction spending fell 1.3% higher in February after jumping 2.8% in January.


&bull; A return to more somewhat more seasonal weather in February after a very warm January likely played a role.



The value of construction put-in-place dropped 1.3% in February (+6.0% year-on-year). Both January and December were revised higher to 2.8% and 0.4% respectively from 1.8% and 0.2%. The Action Economics Forecast Survey expected a 0.6% rise in February. U.S. population-weighted heating was 66 degree-days below normal in February, which is still warmer than normal, but much more seasonable than January's -176 degree day reading. The only warmer January by this measure occurred in 2006.

Based on the revisions to December data, the construction spending portion of fourth quarter GDP is likely to be revised slightly higher. In the fourth quarter GDP report released last week private construction spending (nonresidential + residential) had a negligible impact, adding 0.03 percentage point to GDP growth.

Private construction fell 1.2% (+5.6% y/y) in February while public dropped 1.5% (+7.4% y/y). The declined in private construction was led by a 2.0% contraction in nonresidential construction (-0.7% y/y) with the four largest sectors -- power, commercial, manufacturing, and office all down in February.

Residential construction decreased 0.6% (+11.3% y/y) with gains in single and multi-family (3.9% and 0.1% respectively; 16.1% and -5.7% y/y) offset by a 7.2% drop in home improvement (+10.0% y/y).

Nonresidential public construction, which makes up 98% of public construction, fell 1.5% in February (+7.2% y/y), with both school spending and road building on the decline.

The construction spending figures, some of which date back to 1946, as well as and US Population-Weighted Heating and Cooling Days can be found in
Haver's USECON database. The expectations reading can be found in the AS1REPNA database.


<a href="/comment/200401h.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401h.png"></a>
 <a href="/comment/200401i.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401i.png"></a>

<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" >Construction Put in Place (SA, %)</th>
<th>Feb</th>
<th>Jan</th>
<th>Dec</th>
<th>Feb Y/Y</th>
<th>2019</th>
<th>2018</th>
<th>2017</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol" >Total</td>
<td >-1.3</td>
<td >2.8</td>
<td >0.4</td>
<td >6.0</td>
<td >-0.3</td>
<td >3.3</td>
<td >4.5</td>
</tr>
<tr>
<td class="firstcol" >&nbsp; Private</td>
<td >-1.2</td>
<td >2.5</td>
<td >0.6</td>
<td >5.6</td>
<td >-2.5</td>
<td >3.2</td>
<td >6.0</td>
</tr>
<tr class="odd">
<td class="firstcol" >&nbsp;&nbsp;&nbsp; Residential</td>
<td >-0.6</td>
<td >3.8</td>
<td >2.0</td>
<td >11.3</td>
<td >-4.7</td>
<td >2.8</td>
<td >12.4</td>
</tr>
<tr>
<td class="firstcol" >&nbsp;&nbsp;&nbsp; Nonresidential</td>
<td >-2.0</td>
<td >1.0</td>
<td >-1.0</td>
<td >-0.7</td>
<td >0.0</td>
<td >3.7</td>
<td >-0.7</td>
</tr>
<tr class="odd">
<td class="firstcol" >&nbsp; Public</td>
<td >-1.5</td>
<td >3.5</td>
<td >-0.4</td>
<td >7.4</td>
<td >7.1</td>
<td >3.6</td>
<td >-0.1</td>
</tr>
 </tbody>
 </table>
 
 </body></html>

• Construction spending fell 1.3% higher in February after jumping 2.8% in January. • A return to more somewhat more seasonal weather in February after a very warm January likely played a role. The value of construction put-in-place [...]

Weather-Driven Drop in U.S. Construction Spending in February

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/200401j.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401j.png"></a>
 <a href="/comment/200401k.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401k.png"></a>

&bull; Labor market weakness gets underway in March.


&bull; Service-sector employment declines, particularly in small businesses.


The ADP National Employment Report
indicated that nonfarm private payrolls during March fell 27,000 (+1.3% y/y)
following a 179,000 February increase, revised from 183,000. ADP conducts its
monthly survey during the week that includes the 12th of the month, so it
preceded the stronger layoff activity in recent weeks. The latest figure
compared to a 200,000 decline expected in the Action Economics Forecast Survey.

Small payrolls declined 90,000 (-0.3% y/y) following a fairly
steady 21,000 February gain. Medium-sized payrolls rose 7,000 (1.1% y/y) after a
27,000 rise, which was half the January rise. Large-sized payrolls improved 56,000
(2.2% y/y) after a fairly steady steady131,000 rise.

Within industry sectors, employment at goods-producing firms
eased 9,000 (+0.2% y/y) last month after a 12,000 rise, which also was half the
upwardly revised January increase. Construction sector payrolls fell 16,000 last
month (+1.3% y/y), the first decline in nine months. Factory sector employment
improved 6,000 (-0.3% y/y), the first increase in four months. Employment in the
natural resource &amp; mining sector edged 1,000 higher (-2.0% y/y), but was
down versus March 2019.

Employment growth in the private service sector declined 18,000
(+1.5% y/y) after a 167,000 February strengthening. Education &amp; health
services jobs improved a steady 48,000 (2.4% y/y). Financial activities payrolls
held steady (1.3% y/y). These figures were offset by a collapse of 37,000 (+0.7%
y/y) in trade, transportation &amp; utilities, the largest decline in ten years.
Leisure &amp; hospitality employment fell 11,000 (+2.1% y/y) after two monthly
increases of roughly 45,000. Employment in professional &amp; business services
weakened 3,000 (+1.8% y/y). Information sector payrolls declined 7,000 (-0.5% y/y).

The Automatic Data Processing Research Institute survey is
based on ADP's business payroll transaction system covering 411,000 companies
and nearly 24 million employees. The data are processed by Moody's Analytics
Inc., then calibrated and aligned with the BLS establishment survey data. The
ADP data cover private sector employment only.

The ADP National Employment Report data can be found in
Haver's USECON database. Historical figures date back to 2001 for private
employment and the industry breakdown, and 2005 for the business size breakout.
The expectation figure is available in Haver's AS1REPNA database.

<a href="/comment/200401l.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401l.png"></a>
 <a href="/comment/200401m.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401m.png"></a>

 <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" >ADP/Moody's National
 Employment Report</th>
 <th scope="col" >Mar</th>
 <th scope="col" >Feb</th>
 <th scope="col" >Jan</th>
 <th scope="col" >Mar Y/Y</th>
 <th scope="col" >2019</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Nonfarm Private Payroll Employment (m/m
 chg, 000s)</td>
 <td >-27</td>
 <td >179</td>
 <td >205</td>
 <td >1.3%</td>
 <td >1.5%</td>
 <td >1.8%</td>
 <td >1.7%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Small Payroll (1-49)</td>
 <td >-90</td>
 <td >21</td>
 <td >22</td>
 <td >-0.2</td>
 <td >0.2</td>
 <td >0.6</td>
 <td >1.1</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Medium Payroll (50-499)</td>
 <td >7</td>
 <td >27</td>
 <td >54</td>
 <td >1.1</td>
 <td >2.0</td>
 <td >2.0</td>
 <td >1.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Large Payroll (&gt;500)</td>
 <td >56</td>
 <td >131</td>
 <td >130</td>
 <td >2.2</td>
 <td >1.9</td>
 <td >2.3</td>
 <td >2.0</td>
 </tr>
 <tr>
 <td class="firstcol" >Goods-Producing</td>
 <td >-9</td>
 <td >12</td>
 <td >24</td>
 <td >0.2</td>
 <td >1.6</td>
 <td >2.9</td>
 <td >1.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Construction</td>
 <td >-16</td>
 <td >19</td>
 <td >33</td>
 <td >1.3</td>
 <td >2.7</td>
 <td >4.1</td>
 <td >3.7</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Manufacturing</td>
 <td >6</td>
 <td >-4</td>
 <td >-5</td>
 <td >-0.3</td>
 <td >1.0</td>
 <td >1.9</td>
 <td >0.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Service-Producing</td>
 <td >-18</td>
 <td >167</td>
 <td >181</td>
 <td >1.5</td>
 <td >1.5</td>
 <td >1.6</td>
 <td >1.7</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

• Labor market weakness gets underway in March. • Service-sector employment declines, particularly in small businesses. The ADP National Employment Report indicated that nonfarm private payrolls during March fell 27,000 (+1.3% y/y) [...]

U.S. ADP Private Payrolls Decline as Coronavirus Effects Begin

Sandy Batten

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/200401a.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401a.png"></a>
 <a href="/comment/200401b.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401b.png"></a>

Led by a sharp increase in refinancing applications, the Mortgage Bankers Association's Mortgage Loan Application Index rebounded in the week ended March 27, rising 15.3% w/w (73.7% y/y) after having fallen 29.4% w/w in the previous week and 8.4% w/w in the week ended March 13. Purchase applications remained weak (-10.8% w/w and -23.5% y/y) as the first signs of the devastating hit to employment from the spreading coronavirus likely caused potential homebuyers to pull back. In contrast, with mortgage interest rates falling to series lows for some rates, applications for refinancing jumped up 25.5% w/w (167.7% y/y) after having declined 40.7% in the previous two weeks. The refinance share of mortgage activity increased to 75.9% of total applications from 69.3% the previous week. The adjustable-rate mortgage share of activity decreased to 3.2% of total applications.

The effective interest rate on a 15-year fixed-rate mortgage fell markedly to 3.12% in the week ended March 27 from 3.38% the previous week. The effective interest rate on the 30-year fixed-rate mortgage slumped to 3.57%, the lowest rate in the history of the series, from 3.93%. In contrast, the effective rate on a 30-year Jumbo mortgage only edged down 2 basis points to 3.93% after having risen 31 basis points in the previous two weeks. The rate on the 5-year adjustable rate mortgage fell to 3.34% from 3.48%.

The average mortgage loan size fell to $323,700 in the week ended March 27 from $337,000 the previous week. The average loan size of refinancings declined to $322,800 from $337,500. The average loan size for purchases fell to $326,500 from $336,000.

Applications for fixed-rate loans were up 85.8% y/y, while applications for adjustable rate loans fell 41.9% y/y.

The survey covers over 75% of all U.S. retail residential mortgage applications and
has been conducted weekly since 1990. Respondents include mortgage bankers, commercial
banks and thrifts. The base period and value for each index is March 16, 1990=100.
The figures for weekly mortgage applications and interest rates are available in
Haver's SURVEYW database.

<a href="/comment/200401c.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401c.png"></a>
 <a href="/comment/200401d.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200401d.png"></a>

<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" >MBA Mortgage Applications (%,
 SA)</th>
 <th>03/27/20</th>
 <th>03/20/20</th>
 <th>03/13/20</th>
 <th>Y/Y</th>
 <th>2019</th>
 <th>2018</th>
 <th>2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Total Market Index</td>
<td >15.3</td>
<td >-29.4</td>
<td >-8.4</td>
<td >73.7</td>
<td >32.4</td>
<td >-10.4</td>
<td >-17.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Purchase</td>
<td >-10.8</td>
<td >-14.6</td>
<td >-0.9</td>
<td >-23.5</td>
<td >6.6</td>
<td >2.1</td>
<td >5.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Refinancing</td>
<td >25.5</td>
<td >-33.8</td>
<td >-10.4</td>
<td >167.7</td>
<td >71.1</td>
<td >-24.3</td>
<td >-34.0</td>
 </tr>
 <tr>
 <td class="firstcol" >15-Year Effective Mortgage Interest Rate
 (%)</td>
<td >3.12</td>
<td >3.38</td>
<td >3.20</td>
<td >3.88</td>
<td >3.71</td>
<td >4.35</td>
<td >3.59</td>
 </tr>
 <tr>
 <td class="firstcol" >30-Year Effective Mortgage Interest Rate
 (%)</td>
<td >3.57</td>
<td >3.93</td>
<td >3.85</td>
<td >4.49</td>
<td >4.34</td>
<td >4.94</td>
<td >4.32</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Led by a sharp increase in refinancing applications, the Mortgage Bankers Association's Mortgage Loan Application Index rebounded in the week ended March 27, rising 15.3% w/w (73.7% y/y) after having fallen 29.4% w/w in the previous [...]

U.S. Mortgage Applications Rebound, Led by Refinancing

<html>

<head>
<meta http-equiv="Content-Type" content="text/html; charset=windows-1252">
<meta name="GENERATOR" content="Microsoft FrontPage 4.0">
<meta name="ProgId" content="FrontPage.Editor.Document">
<title>Texas Factory Activity Improvement Led by Production by Tom Moeller&nbsp;
March 30</title>
</head>



 
April 1, 2020
• Labor market weakness gets underway in March.
• Service-sector employment declines, particularly in
small businesses.
The ADP National Employment Report
indicated that nonfarm private payrolls during March fell 27,000 (+1.3% y/y)
following a 179,000 February increase, revised from 183,000. ADP conducts its
monthly survey during the week that includes the 12th of the month, so it
preceded the stronger layoff activity in recent weeks. The latest figure
compared to a 200,000 decline expected in the Action Economics Forecast Survey. 
Small payrolls declined 90,000 (-0.3% y/y) following a fairly
steady 21,000 February gain. Medium-sized payrolls rose 7,000 (1.1% y/y) after a
27,000 rise, which was half the January rise. Large-sized payrolls improved 56,000
(2.2% y/y) after a fairly steady steady131,000 rise.
Within industry sectors, employment at goods-producing firms
eased 9,000 (+0.2% y/y) last month after a 12,000 rise, which also was half the
upwardly revised January increase. Construction sector payrolls fell 16,000 last
month (+1.3% y/y), the first decline in nine months. Factory sector employment
improved 6,000 (-0.3% y/y), the first increase in four months. Employment in the
natural resource &amp; mining sector edged 1,000 higher (-2.0% y/y), but was
down versus March 2019.
Employment growth in the private service sector declined 18,000
(+1.5% y/y) after a 167,000 February strengthening. Education &amp; health
services jobs improved a steady 48,000 (2.4% y/y). Financial activities payrolls
held steady (1.3% y/y). These figures were offset by a collapse of 37,000 (+0.7%
y/y) in trade, transportation &amp; utilities, the largest decline in ten years.
Leisure &amp; hospitality employment fell 11,000 (+2.1% y/y) after two monthly
increases of roughly 45,000. Employment in professional &amp; business services
weakened 3,000 (+1.8% y/y). Information sector payrolls declined 7,000 (-0.5%
y/y).
The Automatic Data Processing Research Institute survey is
based on ADP's business payroll transaction system covering 411,000 companies
and nearly 24 million employees. The data are processed by Moody's Analytics
Inc., then calibrated and aligned with the BLS establishment survey data. The
ADP data cover private sector employment only.
The ADP National Employment Report data can be found in
Haver's USECON database. Historical figures date back to 2001 for private
employment and the industry breakdown, and 2005 for the business size breakout.
The expectation figure is available in Haver's AS1REPNA database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="1068">ADP/Moody's National
 Employment Report</th>
 <th scope="col" width="114">Mar</th>
 <th scope="col" width="114">Feb</th>
 <th scope="col" width="114">Jan</th>
 <th scope="col" width="114">Mar Y/Y</th>
 <th scope="col" width="114">2019</th>
 <th scope="col" width="114">2018</th>
 <th scope="col" width="115">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="1068">Nonfarm Private Payroll Employment (m/m
 chg, 000s)</td>
 <td align="center" width="114">-27</td>
 <td align="center" width="114">179</td>
 <td align="center" width="114">205</td>
 <td align="center" width="114">1.3%</td>
 <td align="center" width="114">1.5%</td>
 <td align="center" width="114">1.8%</td>
 <td align="center" width="115">1.7%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1068">&nbsp;Small Payroll (1-49)</td>
 <td align="center" width="114">-90</td>
 <td align="center" width="114">21</td>
 <td align="center" width="114">22</td>
 <td align="center" width="114">-0.2</td>
 <td align="center" width="114">0.2</td>
 <td align="center" width="114">0.6</td>
 <td align="center" width="115">1.1</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">&nbsp;Medium Payroll (50-499)</td>
 <td align="center" width="114">7</td>
 <td align="center" width="114">27</td>
 <td align="center" width="114">54</td>
 <td align="center" width="114">1.1</td>
 <td align="center" width="114">2.0</td>
 <td align="center" width="114">2.0</td>
 <td align="center" width="115">1.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1068">&nbsp;Large Payroll (&gt;500)</td>
 <td align="center" width="114">56</td>
 <td align="center" width="114">131</td>
 <td align="center" width="114">130</td>
 <td align="center" width="114">2.2</td>
 <td align="center" width="114">1.9</td>
 <td align="center" width="114">2.3</td>
 <td align="center" width="115">2.0</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">Goods-Producing</td>
 <td align="center" width="114">-9</td>
 <td align="center" width="114">12</td>
 <td align="center" width="114">24</td>
 <td align="center" width="114">0.2</td>
 <td align="center" width="114">1.6</td>
 <td align="center" width="114">2.9</td>
 <td align="center" width="115">1.8</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">&nbsp; Construction</td>
 <td align="center" width="114">-16</td>
 <td align="center" width="114">19</td>
 <td align="center" width="114">33</td>
 <td align="center" width="114">1.3</td>
 <td align="center" width="114">2.7</td>
 <td align="center" width="114">4.1</td>
 <td align="center" width="115">3.7</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">&nbsp; Manufacturing</td>
 <td align="center" width="114">6</td>
 <td align="center" width="114">-4</td>
 <td align="center" width="114">-5</td>
 <td align="center" width="114">-0.3</td>
 <td align="center" width="114">1.0</td>
 <td align="center" width="114">1.9</td>
 <td align="center" width="115">0.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1068">Service-Producing</td>
 <td align="center" width="114">-18</td>
 <td align="center" width="114">167</td>
 <td align="center" width="114">181</td>
 <td align="center" width="114">1.5</td>
 <td align="center" width="114">1.5</td>
 <td align="center" width="114">1.6</td>
 <td align="center" width="115">1.7</td>
 </tr>
 </tbody>
</table>

&nbsp;
ISM Manufacturing Index Weakens Slightly; Prices Decline 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp;April 1, 2020
• Production &amp; new orders weakness offset by slower
product delivery speeds.
• Pricing power eases.
Activity in the factory slowed last month. The Institute for
Supply Management (ISM) reported that its composite index of manufacturing
sector activity for February declined to 50.1 after rising to 50.9 in January.
These figures nevertheless remained above the dividing line between expansion
and contraction in the manufacturing sector. A reading of 50.5 had been expected
in the Action Economics Forecast Survey. During the last 15 years, there has
been a 68% correlation between the composite index and the quarterly change in
real GDP.
The easing in the composite index reflected declines in the
new orders and production components, although at 50.3 the production series
remained significantly improved from 44.8 in December. The jump in the supplier
deliveries reading to 57.3 from 52.9 suggested the slowest speed of product
deliveries since November 2018. The inventories component fell to the low end of
its recent range.
The slight rise in the employment figure to 46.9,
nevertheless, continued to reflect a decline in factory sector payrolls. Twelve
percent (NSA) of factory sector payrolls increased while 19% declined. During
the last 15 years, there has been an 80% correlation between the index and the
m/m change in factory sector payrolls.
The prices paid series fell sharply to 45.9, its lowest level
since October. Seventeen percent (NSA) of survey respondents reported higher
prices while 25% reported declines.
Amongst other series in the survey, the imports figure
plummeted to an expansion low. The export reading slipped to 51.2 (NSA), but
remained up from 47.3 in December. The order backlog index surged to 50.3, its
highest level since last March.
The ISM figures are diffusion indexes where a reading above
50 indicates expansion. 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.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="724">ISM Mfg (SA)</th>
 <th width="163">Mar</th>
 <th width="163">Feb</th>
 <th width="163">Jan</th>
 <th width="163">Mar'19</th>
 <th width="163">2019</th>
 <th width="164">2018</th>
 <th width="164">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" width="724">Headline Index</td>
 <td align="center" width="163"></td>
 <td align="center" width="163">50.1</td>
 <td align="center" width="163">50.9</td>
 <td align="center" width="163">54.1</td>
 <td align="center" width="163">51.2</td>
 <td align="center" width="164">58.9</td>
 <td align="center" width="164">57.4</td>
 </tr>
 <tr>
 <td class="firstcol" width="724">&nbsp;New Orders</td>
 <td align="center" width="163"></td>
 <td align="center" width="163">49.8</td>
 <td align="center" width="163">52.0</td>
 <td align="center" width="163">54.9</td>
 <td align="center" width="163">51.1</td>
 <td align="center" width="164">61.6</td>
 <td align="center" width="164">62.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="724">&nbsp;Production</td>
 <td align="center" width="163"></td>
 <td align="center" width="163">50.3</td>
 <td align="center" width="163">54.3</td>
 <td align="center" width="163">55.4</td>
 <td align="center" width="163">51.2</td>
 <td align="center" width="164">60.9</td>
 <td align="center" width="164">60.9</td>
 </tr>
 <tr>
 <td class="firstcol" width="724">&nbsp;Employment</td>
 <td align="center" width="163"></td>
 <td align="center" width="163">46.9</td>
 <td align="center" width="163">46.6</td>
 <td align="center" width="163">53.2</td>
 <td align="center" width="163">50.9</td>
 <td align="center" width="164">56.9</td>
 <td align="center" width="164">56.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="724">&nbsp;Supplier Deliveries</td>
 <td align="center" width="163"></td>
 <td align="center" width="163">57.3</td>
 <td align="center" width="163">52.9</td>
 <td align="center" width="163">55.3</td>
 <td align="center" width="163">52.9</td>
 <td align="center" width="164">62.0</td>
 <td align="center" width="164">56.8</td>
 </tr>
 <tr>
 <td class="firstcol" width="724">&nbsp;Inventories</td>
 <td align="center" width="163"></td>
 <td align="center" width="163">46.5</td>
 <td align="center" width="163">48.8</td>
 <td align="center" width="163">51.6</td>
 <td align="center" width="163">49.8</td>
 <td align="center" width="164">52.9</td>
 <td align="center" width="164">50.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="724">Prices Paid Index (NSA)</td>
 <td align="center" width="163"></td>
 <td align="center" width="163">45.9</td>
 <td align="center" width="163">53.3</td>
 <td align="center" width="163">49.4</td>
 <td align="center" width="163">49.1</td>
 <td align="center" width="164">71.7</td>
 <td align="center" width="164">65.0</td>
 </tr>
 </tbody>
</table>

&nbsp;
U.S. Light Vehicle Sales Hold Steady in February 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp;April 1, 2020
The Autodata Corporation reported that sales of light
vehicles during February eased 0.2% (+2.0% y/y) to 17.04 million (SAAR) from
17.07 million in January, revised from 17.05 million. During the last three
months, sales averaged 17.00 million units. Sales have been easing since the
2016 sales peak of 17.55 million units.
Sales of light trucks were off 0.1% (+6.6% y/y) at 12.56
million units. Purchases of domestically-made light trucks fell 0.8% (+7.2% y/y)
to 9.92 million units following January's 4.4% rise. Sales of imported light
trucks improved 2.7% (4.3% y/y) to 2.64 million units after January's 0.4%
improvement.
Trucks' share of the U.S. light vehicle market reached a
record 73.7%, up from a low of 48.8% during all of 2012.
Auto sales weakened 0.2% (-8.9% y/y) to 4.48 million units.
That remained below a peak level of 7.71 million unit sales during all of 2014.
Purchases of domestically-produced cars fell 3.3% (-12.7% y/y) to 3.22 million
units and added to January's decline. Sales of imported cars strengthened 7.7%
(2.4% y/y) to 1.26 million units after rising 0.9% in January.
Imports' share of the U.S. vehicle market rose last month to
22.9% and has been moving sideways for two years. Imports' share of the
passenger car market jumped to 28.1%, its highest level in four months. Imports
share of the light truck market edged higher to 21.0% and remained up from the
12.0% low in January 2015.
U.S. vehicle sales figures can be found in Haver's USECON
database. Additional detail by manufacturer is in the INDUSTRY database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="974">Light Weight Vehicle Sales
 (SAAR, Million Units)</th>
 <th width="127">Mar</th>
 <th width="127">Feb</th>
 <th width="127">Jan</th>
 <th width="128">Mar Y/Y %</th>
 <th width="128">2019</th>
 <th width="128">2018</th>
 <th width="128">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" width="974">Total</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">17.04</td>
 <td align="center" width="127">17.07</td>
 <td align="center" width="128">2.0</td>
 <td align="center" width="128">16.99</td>
 <td align="center" width="128">17.27</td>
 <td align="center" width="128">17.23</td>
 </tr>
 <tr>
 <td class="firstcol" width="974">&nbsp;Autos</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">4.48</td>
 <td align="center" width="127">4.49</td>
 <td align="center" width="128">-8.9</td>
 <td align="center" width="128">4.80</td>
 <td align="center" width="128">5.36</td>
 <td align="center" width="128">6.16</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="974">&nbsp;&nbsp;Domestic</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">3.22</td>
 <td align="center" width="127">3.33</td>
 <td align="center" width="128">-12.7</td>
 <td align="center" width="128">3.52</td>
 <td align="center" width="128">4.00</td>
 <td align="center" width="128">4.58</td>
 </tr>
 <tr>
 <td class="firstcol" width="974">&nbsp;&nbsp;Imported</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">1.26</td>
 <td align="center" width="127">1.17</td>
 <td align="center" width="128">2.4</td>
 <td align="center" width="128">1.28</td>
 <td align="center" width="128">1.36</td>
 <td align="center" width="128">1.59</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="974">&nbsp;Light Trucks</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">12.56</td>
 <td align="center" width="127">12.57</td>
 <td align="center" width="128">6.6</td>
 <td align="center" width="128">12.18</td>
 <td align="center" width="128">11.92</td>
 <td align="center" width="128">11.07</td>
 </tr>
 <tr>
 <td class="firstcol" width="974">&nbsp;&nbsp;Domestic</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">9.92</td>
 <td align="center" width="127">10.00</td>
 <td align="center" width="128">7.2</td>
 <td align="center" width="128">9.65</td>
 <td align="center" width="128">9.44</td>
 <td align="center" width="128">9.00</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="974">&nbsp;&nbsp;Imported</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">2.64</td>
 <td align="center" width="127">2.57</td>
 <td align="center" width="128">4.3</td>
 <td align="center" width="128">2.53</td>
 <td align="center" width="128">2.48</td>
 <td align="center" width="128">2.07</td>
 </tr>
 </tbody>
</table>





</html>

• Labor market weakness gets underway in March. • Service-sector employment declines, particularly in small businesses

<html>

<head>
<meta http-equiv="Content-Type" content="text/html; charset=windows-1252">
<meta name="GENERATOR" content="Microsoft FrontPage 4.0">
<meta name="ProgId" content="FrontPage.Editor.Document">
<title>Texas Factory Activity Improvement Led by Production by Tom Moeller&nbsp;
March 30</title>
</head>



 
April 1, 2020
• Labor market weakness gets underway in March.
• Service-sector employment declines, particularly in
small businesses.
The ADP National Employment Report
indicated that nonfarm private payrolls during March fell 27,000 (+1.3% y/y)
following a 179,000 February increase, revised from 183,000. ADP conducts its
monthly survey during the week that includes the 12th of the month, so it
preceded the stronger layoff activity in recent weeks. The latest figure
compared to a 200,000 decline expected in the Action Economics Forecast Survey. 
Small payrolls declined 90,000 (-0.3% y/y) following a fairly
steady 21,000 February gain. Medium-sized payrolls rose 7,000 (1.1% y/y) after a
27,000 rise, which was half the January rise. Large-sized payrolls improved 56,000
(2.2% y/y) after a fairly steady steady131,000 rise.
Within industry sectors, employment at goods-producing firms
eased 9,000 (+0.2% y/y) last month after a 12,000 rise, which also was half the
upwardly revised January increase. Construction sector payrolls fell 16,000 last
month (+1.3% y/y), the first decline in nine months. Factory sector employment
improved 6,000 (-0.3% y/y), the first increase in four months. Employment in the
natural resource &amp; mining sector edged 1,000 higher (-2.0% y/y), but was
down versus March 2019.
Employment growth in the private service sector declined 18,000
(+1.5% y/y) after a 167,000 February strengthening. Education &amp; health
services jobs improved a steady 48,000 (2.4% y/y). Financial activities payrolls
held steady (1.3% y/y). These figures were offset by a collapse of 37,000 (+0.7%
y/y) in trade, transportation &amp; utilities, the largest decline in ten years.
Leisure &amp; hospitality employment fell 11,000 (+2.1% y/y) after two monthly
increases of roughly 45,000. Employment in professional &amp; business services
weakened 3,000 (+1.8% y/y). Information sector payrolls declined 7,000 (-0.5%
y/y).
The Automatic Data Processing Research Institute survey is
based on ADP's business payroll transaction system covering 411,000 companies
and nearly 24 million employees. The data are processed by Moody's Analytics
Inc., then calibrated and aligned with the BLS establishment survey data. The
ADP data cover private sector employment only.
The ADP National Employment Report data can be found in
Haver's USECON database. Historical figures date back to 2001 for private
employment and the industry breakdown, and 2005 for the business size breakout.
The expectation figure is available in Haver's AS1REPNA database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="1068">ADP/Moody's National
 Employment Report</th>
 <th scope="col" width="114">Mar</th>
 <th scope="col" width="114">Feb</th>
 <th scope="col" width="114">Jan</th>
 <th scope="col" width="114">Mar Y/Y</th>
 <th scope="col" width="114">2019</th>
 <th scope="col" width="114">2018</th>
 <th scope="col" width="115">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="1068">Nonfarm Private Payroll Employment (m/m
 chg, 000s)</td>
 <td align="center" width="114">-27</td>
 <td align="center" width="114">179</td>
 <td align="center" width="114">205</td>
 <td align="center" width="114">1.3%</td>
 <td align="center" width="114">1.5%</td>
 <td align="center" width="114">1.8%</td>
 <td align="center" width="115">1.7%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1068">&nbsp;Small Payroll (1-49)</td>
 <td align="center" width="114">-90</td>
 <td align="center" width="114">21</td>
 <td align="center" width="114">22</td>
 <td align="center" width="114">-0.2</td>
 <td align="center" width="114">0.2</td>
 <td align="center" width="114">0.6</td>
 <td align="center" width="115">1.1</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">&nbsp;Medium Payroll (50-499)</td>
 <td align="center" width="114">7</td>
 <td align="center" width="114">27</td>
 <td align="center" width="114">54</td>
 <td align="center" width="114">1.1</td>
 <td align="center" width="114">2.0</td>
 <td align="center" width="114">2.0</td>
 <td align="center" width="115">1.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1068">&nbsp;Large Payroll (&gt;500)</td>
 <td align="center" width="114">56</td>
 <td align="center" width="114">131</td>
 <td align="center" width="114">130</td>
 <td align="center" width="114">2.2</td>
 <td align="center" width="114">1.9</td>
 <td align="center" width="114">2.3</td>
 <td align="center" width="115">2.0</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">Goods-Producing</td>
 <td align="center" width="114">-9</td>
 <td align="center" width="114">12</td>
 <td align="center" width="114">24</td>
 <td align="center" width="114">0.2</td>
 <td align="center" width="114">1.6</td>
 <td align="center" width="114">2.9</td>
 <td align="center" width="115">1.8</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">&nbsp; Construction</td>
 <td align="center" width="114">-16</td>
 <td align="center" width="114">19</td>
 <td align="center" width="114">33</td>
 <td align="center" width="114">1.3</td>
 <td align="center" width="114">2.7</td>
 <td align="center" width="114">4.1</td>
 <td align="center" width="115">3.7</td>
 </tr>
 <tr>
 <td class="firstcol" width="1068">&nbsp; Manufacturing</td>
 <td align="center" width="114">6</td>
 <td align="center" width="114">-4</td>
 <td align="center" width="114">-5</td>
 <td align="center" width="114">-0.3</td>
 <td align="center" width="114">1.0</td>
 <td align="center" width="114">1.9</td>
 <td align="center" width="115">0.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1068">Service-Producing</td>
 <td align="center" width="114">-18</td>
 <td align="center" width="114">167</td>
 <td align="center" width="114">181</td>
 <td align="center" width="114">1.5</td>
 <td align="center" width="114">1.5</td>
 <td align="center" width="114">1.6</td>
 <td align="center" width="115">1.7</td>
 </tr>
 </tbody>
</table>

&nbsp;
ISM Manufacturing Index Weakens in March 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp;April 1, 2020
• Broad-based component declines led by fewer new orders.
• Pricing power falls sharply.
• Most readings move below the break-even level of 50.
Activity in the factory sector weakened just slightly last
month despite the onset of the coronavirus. The Institute for Supply Management
(ISM) reported that its composite index of manufacturing sector activity for
March fell to 49.1 after easing to 50.1 in February. A reading of 50.5 had been
expected in the Action Economics Forecast Survey. During the last 15 years,
there has been a 68% correlation between the composite index and the quarterly
change in real GDP.
The new orders index fell to 42.2, its lowest level since
March 2009. The production measure also fell sharply to 47.7, down versus the
cycle high of 64.2 in January 2018. 
Also declining to its lowest point since May 2009 was the
employment measure to 43.8. Just nine percent (NSA) of respondents reported
higher payrolls while 21% reported a decline. During the last 15 years, there
has been 80% correlation between the employment index and the m/m change in
factory sector payrolls.
The supplier delivery measure surged to 65.0 from 57.3,
indicating the slowest product delivery speeds since June 2018. Holding fairly
steady m/m at 46.9 was the inventory index, but that was down from 53.9 in
August 2018.
The prices paid index declined sharply to 37.4 (NSA), its
lowest point since January 2016. Only 12% of respondents reported higher prices
while 37% reported a decline.&nbsp; 
Other series in the ISM report indicated weakness. The export
order measure fell to 46.6, the lowest point in six months and down from a high
of 62.8 in February 2018. The import series fell to an expansion low of 42.1 and
the order backlog measure fell to 45.9 from 50.4 twelve months
earlier.&nbsp;&nbsp; 
The ISM figures are diffusion indexes where a reading above
50 indicates expansion. 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.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="724">ISM Mfg (SA)</th>
 <th width="163">Mar</th>
 <th width="163">Feb</th>
 <th width="163">Jan</th>
 <th width="163">Mar'19</th>
 <th width="163">2019</th>
 <th width="164">2018</th>
 <th width="164">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" width="724">Composite Index</td>
 <td align="center" width="163">49.1</td>
 <td align="center" width="163">50.1</td>
 <td align="center" width="163">50.9</td>
 <td align="center" width="163">54.6</td>
 <td align="center" width="163">51.2</td>
 <td align="center" width="164">58.9</td>
 <td align="center" width="164">57.4</td>
 </tr>
 <tr>
 <td class="firstcol" width="724">&nbsp;New Orders</td>
 <td align="center" width="163">42.2</td>
 <td align="center" width="163">49.8</td>
 <td align="center" width="163">52.0</td>
 <td align="center" width="163">55.5</td>
 <td align="center" width="163">51.1</td>
 <td align="center" width="164">61.6</td>
 <td align="center" width="164">62.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="724">&nbsp;Production</td>
 <td align="center" width="163">47.7</td>
 <td align="center" width="163">50.3</td>
 <td align="center" width="163">54.3</td>
 <td align="center" width="163">55.1</td>
 <td align="center" width="163">51.2</td>
 <td align="center" width="164">60.9</td>
 <td align="center" width="164">60.9</td>
 </tr>
 <tr>
 <td class="firstcol" width="724">&nbsp;Employment</td>
 <td align="center" width="163">43.8</td>
 <td align="center" width="163">46.9</td>
 <td align="center" width="163">&nbsp;46.6</td>
 <td align="center" width="163">57.1</td>
 <td align="center" width="163">50.9</td>
 <td align="center" width="164">56.9</td>
 <td align="center" width="164">56.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="724">&nbsp;Supplier Deliveries</td>
 <td align="center" width="163">65.0</td>
 <td align="center" width="163">57.3</td>
 <td align="center" width="163">52.9</td>
 <td align="center" width="163">54.9</td>
 <td align="center" width="163">52.9</td>
 <td align="center" width="164">62.0</td>
 <td align="center" width="164">56.8</td>
 </tr>
 <tr>
 <td class="firstcol" width="724">&nbsp;Inventories</td>
 <td align="center" width="163">46.9</td>
 <td align="center" width="163">46.5</td>
 <td align="center" width="163">48.8</td>
 <td align="center" width="163">50.6</td>
 <td align="center" width="163">49.8</td>
 <td align="center" width="164">52.9</td>
 <td align="center" width="164">50.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="724">Prices Paid Index (NSA)</td>
 <td align="center" width="163">37.4</td>
 <td align="center" width="163">45.9</td>
 <td align="center" width="163">53.3</td>
 <td align="center" width="163">54.3</td>
 <td align="center" width="163">49.1</td>
 <td align="center" width="164">71.7</td>
 <td align="center" width="164">65.0</td>
 </tr>
 </tbody>
</table>

&nbsp;
U.S. Light Vehicle Sales Hold Steady in February 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp;April 1, 2020
The Autodata Corporation reported that sales of light
vehicles during February eased 0.2% (+2.0% y/y) to 17.04 million (SAAR) from
17.07 million in January, revised from 17.05 million. During the last three
months, sales averaged 17.00 million units. Sales have been easing since the
2016 sales peak of 17.55 million units.
Sales of light trucks were off 0.1% (+6.6% y/y) at 12.56
million units. Purchases of domestically-made light trucks fell 0.8% (+7.2% y/y)
to 9.92 million units following January's 4.4% rise. Sales of imported light
trucks improved 2.7% (4.3% y/y) to 2.64 million units after January's 0.4%
improvement.
Trucks' share of the U.S. light vehicle market reached a
record 73.7%, up from a low of 48.8% during all of 2012.
Auto sales weakened 0.2% (-8.9% y/y) to 4.48 million units.
That remained below a peak level of 7.71 million unit sales during all of 2014.
Purchases of domestically-produced cars fell 3.3% (-12.7% y/y) to 3.22 million
units and added to January's decline. Sales of imported cars strengthened 7.7%
(2.4% y/y) to 1.26 million units after rising 0.9% in January.
Imports' share of the U.S. vehicle market rose last month to
22.9% and has been moving sideways for two years. Imports' share of the
passenger car market jumped to 28.1%, its highest level in four months. Imports
share of the light truck market edged higher to 21.0% and remained up from the
12.0% low in January 2015.
U.S. vehicle sales figures can be found in Haver's USECON
database. Additional detail by manufacturer is in the INDUSTRY database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="974">Light Weight Vehicle Sales
 (SAAR, Million Units)</th>
 <th width="127">Mar</th>
 <th width="127">Feb</th>
 <th width="127">Jan</th>
 <th width="128">Mar Y/Y %</th>
 <th width="128">2019</th>
 <th width="128">2018</th>
 <th width="128">2017</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" width="974">Total</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">17.04</td>
 <td align="center" width="127">17.07</td>
 <td align="center" width="128">2.0</td>
 <td align="center" width="128">16.99</td>
 <td align="center" width="128">17.27</td>
 <td align="center" width="128">17.23</td>
 </tr>
 <tr>
 <td class="firstcol" width="974">&nbsp;Autos</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">4.48</td>
 <td align="center" width="127">4.49</td>
 <td align="center" width="128">-8.9</td>
 <td align="center" width="128">4.80</td>
 <td align="center" width="128">5.36</td>
 <td align="center" width="128">6.16</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="974">&nbsp;&nbsp;Domestic</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">3.22</td>
 <td align="center" width="127">3.33</td>
 <td align="center" width="128">-12.7</td>
 <td align="center" width="128">3.52</td>
 <td align="center" width="128">4.00</td>
 <td align="center" width="128">4.58</td>
 </tr>
 <tr>
 <td class="firstcol" width="974">&nbsp;&nbsp;Imported</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">1.26</td>
 <td align="center" width="127">1.17</td>
 <td align="center" width="128">2.4</td>
 <td align="center" width="128">1.28</td>
 <td align="center" width="128">1.36</td>
 <td align="center" width="128">1.59</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="974">&nbsp;Light Trucks</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">12.56</td>
 <td align="center" width="127">12.57</td>
 <td align="center" width="128">6.6</td>
 <td align="center" width="128">12.18</td>
 <td align="center" width="128">11.92</td>
 <td align="center" width="128">11.07</td>
 </tr>
 <tr>
 <td class="firstcol" width="974">&nbsp;&nbsp;Domestic</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">9.92</td>
 <td align="center" width="127">10.00</td>
 <td align="center" width="128">7.2</td>
 <td align="center" width="128">9.65</td>
 <td align="center" width="128">9.44</td>
 <td align="center" width="128">9.00</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="974">&nbsp;&nbsp;Imported</td>
 <td align="center" width="127"></td>
 <td align="center" width="127">2.64</td>
 <td align="center" width="127">2.57</td>
 <td align="center" width="128">4.3</td>
 <td align="center" width="128">2.53</td>
 <td align="center" width="128">2.48</td>
 <td align="center" width="128">2.07</td>
 </tr>
 </tbody>
</table>





</html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/200331a.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200331a.png"></a>
 <a href="/comment/200331b.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200331b.png"></a>

&bull;

&bull;

&bull;


The Chicago Purchasing Managers Business Barometer rebounded to 49.0 in February..................





The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago.
The survey covers a sample of over 200 purchasing professionals in the Chicago
area with a monthly response rate of about 50%. Summary data are contained in
Haver's USECON database, with detail including the ISM-style index in the SURVEYS database.
The Action Economics Forecast Survey is available in AS1REPNA.

<a href="/comment/200331c.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200331c.png"></a>
 <a href="/comment/200331d.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/200331d.png"></a>

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" >Chicago Purchasing Managers Index (%,
 SA)</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" >General Business Barometer</td>
<td >49.0</td>
<td >42.9</td>
<td >48.2</td>
<td >61.6</td>
<td >51.3</td>
<td >62.4</td>
<td >60.8</td>
 </tr>
 <tr>
 <td class="firstcol" >ISM-Adjusted General Business Barometer</td>
<td >50.8</td>
<td >44.9</td>
<td >48.6</td>
<td >58.2</td>
<td >51.4</td>
<td >60.8</td>
<td >59.0</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp; Production</td>
<td >51.0</td>
<td >42.7</td>
<td >46.5</td>
<td >62.8</td>
<td >51.2</td>
<td >64.5</td>
<td >64.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp; New Orders</td>
<td >49.1</td>
<td >41.5</td>
<td >47.6</td>
<td >64.6</td>
<td >52.0</td>
<td >63.8</td>
<td >63.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp; Order Backlogs</td>
<td >38.2</td>
<td >34.6</td>
<td >44.8</td>
<td >60.5</td>
<td >46.9</td>
<td >58.0</td>
<td >55.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp; Inventories</td>
<td >48.1</td>
<td >40.2</td>
<td >46.1</td>
<td >49.0</td>
<td >48.7</td>
<td >55.4</td>
<td >54.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp; Employment</td>
<td >44.5</td>
<td >47.0</td>
<td >47.2</td>
<td >54.3</td>
<td >49.6</td>
<td >55.3</td>
<td >52.9</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp; Supplier Deliveries</td>
<td >61.3</td>
<td >53.3</td>
<td >55.4</td>
<td >60.1</td>
<td >55.6</td>
<td >64.8</td>
<td >59.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp; Prices Paid</td>
<td >52.9</td>
<td >56.1</td>
<td >58.1</td>
<td >68.3</td>
<td >58.5</td>
<td >73.9</td>
<td >64.0</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

• • • The Chicago Purchasing Managers Business Barometer rebounded to 49.0 in February.................. The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing [...]

U.S. Chicago Business Barometer Fell in March

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

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

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


Privacy Policy

Disclaimer

Contact us

Service Health

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

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

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.

260618.jpg

Europe

EMU Unemployment Remains Low

260617V1.jpg

260617W1.jpg

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**.

260617X1.jpg

260617Y1.jpg

- 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

Jump to:

Markit PMIs Fall and Show Weakness in March

ISM Manufacturing Index Weakens in March

Weather-Driven Drop in U.S. Construction Spending in February

U.S. ADP Private Payrolls Decline as Coronavirus Effects Begin

U.S. Mortgage Applications Rebound, Led by Refinancing

U.S. ADP Private Payrolls Decline as Coronavirus Effects Begin

U.S. ADP Private Payrolls Decline as Coronavirus Effects Begin

U.S. Chicago Business Barometer Fell in March