Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729j.jpg" align="left" border="0" height="265" width="353">
Consumer Confidence indicators were released today for France,
the Netherlands and Slovakia. Business confidence indicators for the
Netherlands and Slovakia were also released today. France's Composite
Business Climate Indicator was released last week. Both consumers
business people in the three countries have become increasingly
pessimistic. Consumers have generally been more pessimistic than
industrialists as can be seen in the three attached Charts which show
consumer and business confidence measures for each country.
Consumer confidence in the Netherlands declined by 12
percentage points in July to -31% from -19% in June. The pessimists in
the Netherlands now outweigh the optimists by 31%/ The optimists still
exceed the pessimists among the producers, but the margin has been
shrinking and now is only 2.4 percentage points.
Consumers are even more pessimistic in France where the
percent balance between pessimists and optimists is 48%, up from 46% in
June. France's Composite (synthetic) Business Confidence Indicator has
fallen below its average level of 100. At 98 it is at the lowest level
since April, 2005.
The percent balance between the pessimists and optimists in
Slovakia has been increasing but the pessimists exceed the optimists by
only 8.8% in contrast to the much bigger differences in France and the
Netherlands. The excess of optimists over pessimist in industry has
practically disappeared. It is only 0.7%, and is 15.6 percentage points
below the excess of optimists in July, 2007.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729i.jpg" border="0" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729h.jpg" border="0" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">CONSUMER
AND BUSINESS CONFIDENCE&nbsp;</th>
<th scope="col">Jul 08</th>
<th scope="col">Jun&nbsp; 08&nbsp;</th>
<th scope="col">Jul 07&nbsp;</th>
<th scope="col">M/M chg&nbsp;</th>
<th scope="col">Y/Y&nbsp; chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol" colspan="9">Netherlands</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer
Confidence (% balance)</td>
<td>-31</td>
<td>-19</td>
<td>14</td>
<td>-12</td>
<td>-45</td>
<td>8</td>
<td>-1</td>
<td>-22</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Producers
Confidence&nbsp; (% balance)</td>
<td>2.4</td>
<td>5.3</td>
<td>7.6</td>
<td>-2.9</td>
<td>-5.2</td>
<td>7.8</td>
<td>6.8</td>
<td>0.6</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="9">France</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Household
Confidence (% balance)</td>
<td>-48</td>
<td>-46</td>
<td>-15</td>
<td>-2</td>
<td>-33</td>
<td>-21</td>
<td>-25</td>
<td>-28</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Composite (synthetic Bus Confidence Indicator (Average=100; Std Dev =
10)&nbsp;</td>
<td>98</td>
<td>101</td>
<td>109</td>
<td>-3.0</td>
<td>-10.1</td>
<td>109</td>
<td>106</td>
<td>100</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="9">Slovakia</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer
Confidence&nbsp;(% balance)</td>
<td>-8.8</td>
<td>-6.4</td>
<td>2.3</td>
<td>-2.4</td>
<td>-11.1</td>
<td>-1.0</td>
<td>-9.1</td>
<td>-14.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Industry
Confidence (% balance)</td>
<td>0.7</td>
<td>2.3</td>
<td>16.3</td>
<td>-1.6</td>
<td>-15.6</td>
<td>12.1</td>
<td>7.6</td>
<td>4.6</td>
</tr>
</tbody>
</table>
</body></html>

Consumer Confidence indicators were released today for France, the Netherlands and Slovakia. Business confidence indicators for the Netherlands and Slovakia were also released today. France's Composite Business Climate Indicator was [...]

Consumer and Business Confidence in The Netherlands, France and Slovakia

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729g.jpg" width="353">
Chain store sales were reported by the International Council of Shopping Centers to have surged last week. The 1.2% w/w jump was the strongest since early June. It lifted the level of sales to a record high and sales for most of this month by 0.5% versus June.
During the last ten years there has been a 45% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
Showing weakness, however, was the leading indicator of chain store sales from ICSC-UBS which fell 0.9% (-4.0% y/y) after a 0.3% decline during the week prior.
The chain store sales figures are available in Haver&#39;s SURVEYW database.
Monetary Policy and Asset Markets: Conference Summary from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2008/el2008-21.pdf"> here</a>.
Research on the Effects of Fiscal Stimulus: Symposium Summary, also from the Federal Reserve Bank of San Francisco, is available <a href="http://www.frbsf.org/publications/economics/letter/2008/el2008-20.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">07/26/08</th>
<th scope="col">07/19/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>499.2</td>
<td>493.4</td>
<td>2.6%</td>
<td>2.8%</td>
<td>3.3%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>


</html>

Chain store sales were reported by the International Council of Shopping Centers to have surged last week. The 1.2% w/w jump was the strongest since early June. It lifted the level of sales to a record high and sales for most of this [...]

U.S. Chain Store Sales Surged To New High

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729e.jpg" align="left" border="0" height="265" width="353">
Consumer confidence, as reported by the Conference Board,
ticked up this month by 1.8% after having dropped a revised 12.2% m/m
during June. The rise contrasted with Consensus expectations for a
moderate decline and it was the first monthly increase this year.
The present conditions index was roughly unchanged from June
and remained near the lowest level since 2003.
A slightly improved 13.1% of respondents saw business
conditions as good but that remained near the lowest since early-2003.
Jobs as plentiful were seen by a new low, since 2003, of 13.5% while
30.3% felt that jobs were hard to get. That was the highest since
early-2004. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729f.jpg" align="right" border="0" height="265" width="353">
The expectations component of the index ticked up 3.9% and
recovered part of the prior month's 12.5% decline.
The percentage of respondents expecting business conditions to
worsen in six months slipped to 32.4% and the percentage expecting
income to decline was roughly unchanged at 16.0%. Just 8.2% of
respondents expected more jobs while 37.1% expected fewer jobs. Only
27.7% of respondents planned to buy a major appliance within six
months. That was the lowest since late last year.
Expectations for the inflation rate slipped last month to 7.6%
but that was near the highest level in the series' 20 year history.
Consumer Confidence Surveys: Can They Help Us
Forecast Consumer Spending in Real Time? is a 2006 article
from the Federal Reserve Bank of Philadelphia. It answers "no" and it
is available <a href="http://www.philadelphiafed.org/files/br/br_q3-2006-1_consumer_confidence.pdf">here</a>.
<div align="left"></div>


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Conference
Board &nbsp;(SA, 1985=100)</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y %</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>51.9</td>
<td>51.0</td>
<td>-53.6</td>
<td>103.4</td>
<td>105.9</td>
<td>100.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>65.3</td>
<td>65.4</td>
<td>-52.8</td>
<td>128.8</td>
<td>130.2</td>
<td>116.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>43.0</td>
<td>41.4</td>
<td>-54.4</td>
<td>86.4</td>
<td>89.7</td>
<td>89.7</td>
</tr>
</tbody>
</table>
</body></html>

Consumer confidence, as reported by the Conference Board, ticked up this month by 1.8% after having dropped a revised 12.2% m/m during June. The rise contrasted with Consensus expectations for a moderate decline and it was the first [...]

Consumer Confidence Ticked Up During July

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729c.jpg" width="353">
The retail price for a gallon of regular gasoline fell ten cents last week to $3.96 per gallon, according to the U.S. Department of Energy survey. That added to a five cent decline during the prior week and reduced prices to their lowest level since late May. For all grades of gasoline the average price fell eleven cents to $4.01 per gallon.
Weekly gasoline prices can be found in Haver&#39;s WEEKLY database, daily prices are in the DAILY database.
According to the U.S. Department of Energy, though the demand for gasoline was unchanged last week from the prior period, gasoline demand during the latest four weeks fell 3.2% from a year earlier. That y/y decline nearly equaled the decline in gasoline demand three years ago when Hurricane Katrina struck and it limited gasoline supplies.
The DOE figures are available in Haver&#39;s OILWKLY database.
The price for a barrel of West Texas Intermediate crude oil also declined last week by nine dollars per barrel to an average $126.14 per barrel, down from $142.46 at the beginning of the month.
Price for natural gas slipped for a second week. Last week&#39;s price averaged $11.26 per mmbtu (76.9% y/y).
Budget of the United States Government: Browse Fiscal Year 2009 <a href="http://www.gpoaccess.gov/usbudget/fy09/browse.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">07/28/08</th>
<th scope="col">07/21/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per Gallon)</td>
<td>3.96</td>
<td>4.06</td>
<td>37.5%</td>
<td>2.80</td>
<td>2.57</td>
<td>2.27</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>126.14</td>
<td>135.34</td>
<td>67.7%</td>
<td>72.25</td>
<td>66.12</td>
<td>56.60</td>
</tr>
</tbody>
</table>
</body>
</html>

The retail price for a gallon of regular gasoline fell ten cents last week to $3.96 per gallon, according to the U.S. Department of Energy survey. That added to a five cent decline during the prior week and reduced prices to their [...]

U.S. Gasoline Prices Down Again With Lower Crude Costs

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729a.jpg" align="left" border="0" height="265" width="353">
During May the S&amp;P/Case-Shiller
Composite 20 home price index fell 1.3% from April. The index was
revised up slightly for April but it has fallen during each month since
July 2006. Since then prices have fallen 18.4% and by 15.8% during the
last twelve months. The series dates back only to 2000.
The Case-Shiller index of 20 U.S. cities and their surrounding
areas is not adjusted for the quality or the size of a home.
The Case-Shiller composite index of homes in 10 metropolitan
areas, which has a longer history and dates back to 1987, fell 1.0% in
May and was down 16.9% year-to-year.
Home prices in Las Vegas, Nevada continued to fall and they
were down 28.4% y/y. Prices in Miami also were off 28.3% and home
prices in Los Angeles fell 24.5%. In San Diego prices fell 23.2% and
they were down 22.9% in San Francisco. Prices in Tampa Florida posted a
20.2% y/y decline.
In New York prices fell a lesser 7.9% and they were down 6.2%
in Boston. In Dallas prices also were off a moderate 3.1% and by only
0.2% in Charlotte, North Carolina.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080729b.jpg" align="right" border="0" height="265" width="353">
The S&amp;P/Case-Shiller home price series can be found in
Haver's USECON database but the city data is in the
REGIONAL database.
The latest press release from Standard &amp; Poor's can be
found <a href="http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_072943.pdf">here</a>.
An overview of the S&amp;P/Case-Shiller home price series
can be found <a href="http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html">here</a>.
Whither Federal Reserve Communications is
yesterday's speech by Governor Frederic S. Mishkin and it can be found <a href="http://www.federalreserve.gov/newsevents/speech/mishkin20080728a.htm">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">S&amp;P/Case-Shiller
Home Price Index (NSA, Jan 00 = 100)</th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">20 City Composite
Index</td>
<td>168.54</td>
<td>170.00</td>
<td>-15.8%</td>
<td>-3.8%</td>
<td>7.6%</td>
<td>15.8%</td>
</tr>
</tbody>
</table>
</body></html>

During May the S&P/Case-Shiller Composite 20 home price index fell 1.3% from April. The index was revised up slightly for April but it has fallen during each month since July 2006. Since then prices have fallen 18.4% and by 15.8% [...]

Case-Shiller Home Price Index Down 15.8%

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080728c.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s retail sector is in a bad way. Consumer sentiment ad
retail spending usually mark one another pretty well. Right now both
series are telling a dismal story about the Italian consumer. The
recent drop-of in spending is severe, with most of the drop coming in
March and with no recovery (small real declines) in April and May. 
 

In the quarter-to-date Italy&#8217;s real retail spending is
dropping at a 4.1% annual rate. This is in keeping with other signs
from the Euro Area that weakness has suddenly intensified. Even so the
Germany ministry is today saying that they are not going to change
their GDP outlook. There is a thin line that separates stoicism from
denial. The Euro Area seems to be sinking deeper into an undesired
economic funk. Meanwhile the ECB still sees inflation as public enemy
number-one. Only in the EMU&#8217;s UK do the monetary authorities seem to
have a grip on the true dual risk of their situation. Still they have
not magic policy plan but are marking time to see which risk blows out
of proportion and will need attention first. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col"> Italy Retail Sales Growth</th>

</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">mo/mo %</td>
<td colspan="4">At annual rates</td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>May-08</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>Q-2-Date</td>
</tr>
<tr>
<td class="firstcol">Retail Trade</td>
<td>0.2%</td>
<td>0.1%</td>
<td>-0.6%</td>
<td>-1.5%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.6%</td>
<td>-0.7%</td>
</tr>
<tr>
<td class="firstcol">Food Beverage &amp; Tobacco</td>
<td>0.3%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-0.7%</td>
<td>1.0%</td>
<td>1.1%</td>
<td>1.0%</td>
<td>0.2%</td>
</tr>
<tr>
<td class="firstcol">Clothing &amp; Furniture</td>
<td>4.8%</td>
<td>-4.1%</td>
<td>-2.8%</td>
<td>-9.1%</td>
<td>-0.2%</td>
<td>-0.2%</td>
<td>0.1%</td>
<td>-14.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Real Retail</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>-1.1%</td>
<td>-5.4%</td>
<td>-3.9%</td>
<td>-3.4%</td>
<td>-1.0%</td>
<td>-4.1%</td>
</tr>
</tbody>
</table>
</body></html>

Italy’s retail sector is in a bad way. Consumer sentiment ad retail spending usually mark one another pretty well. Right now both series are telling a dismal story about the Italian consumer. The recent drop-of in spending is severe, [...]

Italy's Retail Sector Hits the Skids

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080728a.jpg" align="left" border="0" height="265" width="353">
The United Kingdom's Hometrack Survey reports local market
information compiled by real estate agents around England and Wales.
The agents report on house prices, the ratio of the sales price to the
asking price, the number of weeks it takes to make a sale and the
average number of viewings per sale.
According to the July report, released today, the weighted
average price of a house fell 1.2% from 170,500 GBP (Great Britain
Pound) in June to 168,500 GBP in July. (In U. S. dollars, $335,000).
The average price of a house is now 4.4% below the peak reached a year
ago. The selling price of a house has also declined relative to its
asking price. In July, the ratio of sales price to asking price was
90.9, down from 91.6 in June and well below the recent high of 95.7
reached in May, 2007. The average price of a house and the ratio of the
sales price to the asking price are shown in the first chart.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080728b.jpg" align="right" border="0" height="265" width="353">
Indicative of the difficulty of selling houses, the real
estate agents reported that it took 11 weeks to complete a sale in
July, 2008 compared with 10.3 in June and 90% higher than the 5.8 weeks
in May, 2007. The number of viewings before a sale was made was 14.9 in
July up from 14.4 in June and 51% higher than the 9.9 in January, 2007.
The number of weeks it takes to make a sale and the number of viewings
before a sale is made are shown in the second chart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">United
Kingdom</th>
<th scope="col">Jul 08</th>
<th scope="col">Jun&nbsp; 08&nbsp;</th>
<th scope="col">Previous High or Low&nbsp;</th>
<th scope="col">Date</th>
<th scope="col">M/M chg&nbsp;</th>
<th scope="col">&nbsp;Chg&nbsp; from
Previous High or Low</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">House Price (GBP)</td>
<td>168500</td>
<td>170500</td>
<td>176300</td>
<td>Aug 07</td>
<td>-1.2%</td>
<td>-4.4%</td>
<td>174867</td>
<td>165725</td>
</tr>
<tr>
<td class="firstcol">Ratio Sales Price to
Asking Price</td>
<td>90.9</td>
<td>91.6</td>
<td>65.7</td>
<td>May 07</td>
<td>-0.7</td>
<td>-4.8</td>
<td>95.0</td>
<td>94.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Number of Weeks before
a Sale</td>
<td>11.0</td>
<td>10.3</td>
<td>5.8</td>
<td>May 07</td>
<td>6.8%</td>
<td>89.7%</td>
<td>6.7</td>
<td>6.8</td>
</tr>
<tr>
<td class="firstcol">Number of Viewings
before a Sale</td>
<td>14.9</td>
<td>14.4</td>
<td>9.9</td>
<td>Jan 07</td>
<td>3.5%</td>
<td>50.5%</td>
<td>11.0</td>
<td>10.9</td>
</tr>
</tbody>
</table>
</body></html>

The United Kingdom's Hometrack Survey reports local market information compiled by real estate agents around England and Wales. The agents report on house prices, the ratio of the sales price to the asking price, the number of weeks [...]

UK Real Estate Agents Report Declines In House Prices And More Difficulties In Making A Sale

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

Even with expected tariff-induced increases in inflation, BCFF forecasters look for a more aggressive round of monetary easing

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

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Nonfarm payrolls increased 73,000 during July after rising 14,000 in June, revised from 147,000, and 19,000 in May, revised from 144,000. Expectations had been for a 102,000 rise in the Action Economics Forecast Survey. The three-month average change in payrolls of 35,000 compared to 64,000 in June. The Bureau of Labor Statistics indicates that monthly revisions result from additional reports received from businesses and government agencies since the last published estimates.

Average hourly earnings rose an expected 0.3% during July after unrevised gains of 0.2% and 0.4% in June & May. Earnings growth of 3.9% y/y is little changed over twelve months, but has been trending lower from its 5.9% high in March 2022.

The unemployment rate, measured in the household survey, edged up m/m to an expected 4.2% from 4.1% and compared to 4.2% in the previous three months. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, rose to 7.9% last month from 7.7% In June. It was 6.6% in April 2023.

In the **establishment survey**, private-sector employment in July rose 83,000, factory sector jobs declined 11,000, off for the third straight month. Construction sector employment increased 2,000, after rising 3,000 in June. The number of mining & logging industry jobs declined 4,000 after falling in both of the prior two months. 

Private service sector employment increased 96,000 July after improving 16,000 in June. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 79,000 last month, following a 52,000 increase in June. The number of trade, transportation & utilities jobs gained 11,000, following a 22,000 decline and financial activities employment improved 15,000 after a 2,000 drop, while leisure & hospitality employment rose just 5,000 after a 4,000 gain. The number of professional & business services jobs fell 14,000, down for the third straight month.  Information sector employment fell 2,000, after holding steady in June.

Government sector payrolls declined 10,000 last month and revered June’s 11,000 rise. Federal government employment weakened 12,000 and has fallen for six straight months. Local government employment eased 3,000 after rising 10,000 in June while state government payrolls rose 5,000 after increasing 10,000.

Private-sector average hourly earnings rose 0.3% (3.9% y/y) in July. Earnings in the goods-producing sector edged up 0.1% (3.6% y/y). In construction, earnings rose 0.2% (3.7% y/y) following a 0.4% rise, but factory sector earnings eased 0.1% (+3.6% y/y). In the service sector, earnings rose 0.4% (4.0% y/y) in July after increasing 0.2% in June.

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The length of the average workweek rose to 34.3 hours in July from 34.2 hours in June. The workweek in the goods-producing sector lengthened to 39.9 hours from 39.7 hours. The construction sector average workweek rose to 39.1 hours from 38.9 while the factory sector workweek held steady at 40.1 hours. The average workweek in the private service sector edged up to 33.2 hours from 33.1 hours.

In the **household survey**, the unemployment rate increased to 4.2% in July after falling to 4.1% as employment fell 260,000 after rising 93,000 in June and the size of the labor force declined 38,000, off for the third straight month. The labor force participation rate eased to 62.2% last month from 62.3% and remained below the high of 63.3% early in 2020. The rate for teenagers declined to 35.0%, after plunging to 35.1%. For workers aged 20-24, the rate declined to 70.9%. For workers aged 25-54, the participation rate eased to 83.4%. For individuals 55 and over, the rate improved slightly to 38.1% but remained near a 20-year low of 38.0% in June.

The employment/population ratio for all workers slipped to 59.6% last month. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic. For men, the rate fell to 64.7% in July from 64.9% and for women, the rate eased to 54.7% from 54.8% in June.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

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- Recent job growth reduced by fewer factory & government jobs.
- Earnings gain remains steady y/y.
- Jobless rate reverses June decline.

U.S. Employment Report Shows Weakness in July, While Revisions Reduce Earlier Gains; Jobless Rate Picks Up

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U.S. light vehicle sales increased 7.6% (6.0% y/y) to 16.87 million units (SAAR) in July after falling 0.3% to 15.68 million units in June. The gain followed three straight months of decline. The improvement in July vehicle sales accompanied a 1.7% y/y rise in real disposable income through June, which compared to 2.1% growth last year.

Increases in sales were broad-based last month. Light truck sales rose 7.7% (10.0% y/y) in July to 14.02 million units, after easing 0.2% to 13.02 million in June and weakening 8.7% in May to 13.04 million. Purchases of domestically-made light trucks improved 7.1% (12.0% y/y) to 10.79 million units, after falling 1.0% in June to 10.07 million. Sales of imported light trucks rose 9.8% (3.8% y/y) to 3.24 million units, following a 3.9% rise in June.

Trucks’ record 83.1% share of the light vehicle market last month compared to 83.0% in June and 80.1% in July of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales rose 6.4% last month, down 9.8% y/y, to 2.84 million units (SAAR) following a 0.4% June decline. Purchases of domestically-produced cars rebounded 10.1% (-6.4% y/y) last month to 2.18 million units, after declining 2.5% in June. Sales of imported autos fell 2.9% (-20.5% y/y) to 0.66 million units, after a 4.6% June gain.

Imports' 23.1% share of the U.S. light vehicle market edged down from 23.2% in June. These compare to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market fell to 23.2% last month and compared to 26.4% in July of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market rose to 23.1% last month after rising to 22.7% in June.

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

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- Both light truck and auto sales recover.
- Domestic and imports each increase.
- Imports' market share steadies.

U.S. Light Vehicle Sales Rebound in July

Winnie Tapasanun

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The ISM U.S. manufacturing PMI fell to 48.0 in July from 49.0 in June and 48.5 in May, according to the Institute for Supply Management. The July manufacturing PMI, below the 50 expansion-contraction dividing line, indicated that the U.S. manufacturing sector contracted for the fifth consecutive month and to the lowest level since October 2024. The July reading, while slightly higher than a low of 46.9 in October and 47.0 in July of last year, was below its recent high of 50.9 in January and a peak of 63.8 in March 2021. A reading of 49.5 for July had been expected in the Action Economics Forecast Survey.

The production index rose to 51.4 in July after rising to 50.3 in June, suggesting production expanded for the second successive month and to the highest level since January; it was up from its most recent low of 44.0 in April but slightly below a high of 53.7 in March 2024. Twenty percent (NSA) of respondents reported higher production in July while 19.2% reported lower.

The new orders index increased to 47.1 in July after falling to 46.4 in June, indicating new orders contracted for the sixth straight month but at a slightly less severe pace. The Index, while below its recent high of 55.1 in January, was up from a low of 42.7 in January 2023. Nearly nineteen percent (NSA) of respondents reported higher new orders in July while 25.9% reported declines. The inventories index, however, fell to 48.9 in July after rising to 49.2 in June, showing inventories contracted for the third consecutive month. The index was down from its recent high of 53.4 in March and a high of 56.5 in July 2022. Meanwhile, the supplier deliveries index fell to 49.3 in July from 54.2 in June, indicating faster delivery performance following seven straight months in slower territory. An 8.7% (NSA) of respondents reported slower delivery speeds in July while an increased 10.2% reported faster speeds.

On the labor front, the employment index fell to 43.4 in July after falling to 45.0 in June, indicating employment contracted for the sixth straight month and to the lowest level since June 2020. The index was down from its recent high of 50.3 in January and a high of 56.5 in March 2022. A 12.6% (NSA) of respondents reported higher employment in July while an increased 25.0% reported less hiring.

On the pricing front, the prices paid index declined to 64.8 (NSA) in July after rising to 69.7 in June, indicating raw materials prices rose for the 10th straight month but at the slowest rising rate since February. The July index remained well above a low of 39.4 in December 2022 but meaningfully below a high of 87.1 in March 2022 and a peak of 92.1 in June 2021. A decreased 35.4% (NSA) of respondents reported higher prices in July while 5.8% reported price declines.

In other ISM series not included in the composite index, the new export orders index slipped to 46.1 in July after increasing to 46.3 in June, indicating new export orders contracted for the fifth straight month. It was down from its recent high of 52.4 in January and a high of 57.1 in February 2022. The imports index edged up to 47.6 in July after rising to 47.4 in June, remaining at a contraction level for the fourth consecutive month; it was down from its recent high of 52.6 in February and a high of 55.4 in February 2022. The order backlog index increased to 46.8 (NSA) in July after declining to 44.3 in June, indicating falling backlog levels since October 2022. It was up from a low of 37.5 in May 2023 but down from a peak of 70.6 in May 2021.

The ISM figures are based on responses from over 400 purchasing and supply executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These data are diffusion indexes where a reading above 50 indicates expansion; below 50 indicates contraction. The ISM Manufacturing PMI is a composite index based on the diffusion indexes of five of the indexes (seasonally adjusted) with equal weights: New Orders, Production, Employment, Supplier Deliveries, and Inventories. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

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- 48.0 in July vs. 49.0 in June; the fifth consecutive month of contraction.
- Production (51.4) expands to a six-month high.
- New orders (47.1) contract for the sixth successive month.
- Employment (43.4) contracts to the lowest level since June ’20.
- Prices Index (64.8) indicates prices rise for the 10th straight month; exports & imports contracting.

U.S. ISM Manufacturing PMI Contracts in July to a Nine-Month Low

Michael J. Moran

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Total construction activity fell 0.4 percent in June, continuing a soft trend that began in the middle of last year. After peaking in May 2024, total outlays have declined 3.6%. The retreat was modest at first, but the softness began to intensify last fall. Activity has now declined in nine of the past ten months, with the drop over this span totaling 3.1%. The private sector accounts for nearly all of the softness, with both residential and nonresidential contributing; public construction has continued to advance, although gains in recent months have been modest.

Private residential construction fell 0.7% in June, marking the 12th decline in the past 13 months and leaving activity 7.3% below the peak in May 2024. Hints of softness in private residential construction first appeared in mid-2023, when multi-family construction first stalled and then moved notably downward throughout 2024. Following the swoon in 2024, multi-family activity has stabilized in recent months.

However, single family building has taken the lead in pulling activity lower, declining for four consecutive months with pronounced retreats in the past three (average of -1.8%). Prospects for single-family construction do not seem bright, as the ups and downs in single-family housing starts have left little net growth in the past year; the past four months have been especially soft.

Improvements to existing structures contributed to weakness with sharp declines early in the year, but this area has posted small gains in the past three months. Home improvements (i.e. additions and renovations) should not be ignored in assessing residential construction, as they typically represent 35 to 40 percent of private activity.

Private nonresidential construction fell 0.3 percent in June, reinforcing the downward drift that has been in place since the start of 2024. This sector has posted 11 declines in the past 18 months. While activity grew in several months over this span, most of the increases were minuscule. The net effect of the ups and downs was a drop of 6.6% (annual rate of 4.4%). Total nonresidential activity has several components, and some have advanced in the past year or so, but none has posted an impressive performance. Two areas, lodging (hotel, motels, resorts) and commercial (retail and wholesale), have been notably soft.

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The public sector has started to sputter after two years of strong activity. Building was vigorous in 2023, growing 21.8% (December to December), and activity advanced an additional 2.4% in 2024. Growth so far this year has been modest on balance. Most months have registered gains, but they offset declines in the closing months of last year by only a small margin. Activity in June was 0.1% above the reading in October (the high point in 2024). Both state and Local governments and the federal sector have posted similar performances: robust in 2023, moderate in 2024, and hesitating this year.

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

- Private building, both residential and nonresidential, drifting lower.
- Public construction hesitating after two strong years.

U.S. Construction: Sluggish in June

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Manufacturing PMIs in the S&P framework were mixed in July. However, the median reading edged slightly higher rising to 48.6 in July from 48.5 in June. But both of these are significantly weaker than the 49.1 reading in May. Manufacturing continues to post PMI readings that are below 50 indicating sector contraction on a fairly broad basis in July among the 17 reporting countries in the table plus the euro area. Only India and Vietnam reported PMI readings above 50 indicating sector expansion in July. In June, three of these jurisdictions showed readings above 50; in May, only three had readings above 50 as well. It remains a difficult time for manufacturing globally.

The readings for the manufacturing PMIs also show slippage in the medians from 12-months to six-months to three-months. The 12-month median is 49.2, the six-month median at 48.8, and the three-month median at 48.7. The bottom line is that most manufacturing sectors show contraction, and the contractions are generally getting slightly worse.

However, on an individual basis over three months about two-thirds of the reporters showed an improvement. Over six months just under 40% showed improvement and over a year about 44% of them showed improvement compared to the year before. Only the three-month versus six-month comparison shows a majority of reporters indicating better performance in July.

The ranked or queue standings metrics that place these individual readings for July in their queue of data over the last 4 ½ years, show standings above 50% which put the individual readings above their medians for this period. And only six of these eighteen reporting jurisdictions sported readings above 50%. Those were for the euro area, Germany, France, and India. India has a rating well above 50% at its 96th percentile; Malaysia has a reading above 50% and Vietnam has a reading well above 50% at its 74th percentile.

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The global economy has been put through the ringer with shocks from a war in Ukraine, stepped up military action in the Middle East, threats in the Straits of Hormuz, and an aggressive tariff policy from the United States, affecting global trade- a significant factor for manufacturing. These events have wrong-footed manufacturing globally. During this period, the inflation threat has dissipated; however, in most countries, inflation still slightly overshoots its target where central banks have such targets.

The U.S. has a particularly large number of policy changes afoot. Its manufacturing sector is still struggling. And recent employment data there indicate what appears to be a broader slowdown in the economy. Job growth in the U.S. has slowed and U.S. trends now show consumer spending slowing along with weaker and downwardly revised job growth. Put together, these are signals to watch closely.

Economy in Brief: 2008

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Consumer and Business Confidence in The Netherlands, France and Slovakia

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Consumer Confidence Ticked Up During July

Italy's Retail Sector Hits the Skids

UK Real Estate Agents Report Declines In House Prices And More Difficulties In Making A Sale