Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<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>
Italy's Retail Sector Hits the
Skids 
by <a href="/comment/Brusca.html">Robert
Brusca</a> July 28, 2008


<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>

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 ReportDeclines In House Prices And More Difficulties In Making A Sale

Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725g.jpg" width="353">
The University of Michigan&#39;s July reading of consumer sentiment rose 8.5% from June, an improvement from the read for early July which showed a 0.4% uptick versus the June average. The rise beat Consensus expectations for a reading of 56.3 which would have been unchanged from June. The latest level of sentiment was its highest since April.
During the last ten years there has been a 47% correlation between the level of sentiment and the three month change in real consumer spending.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725h.jpg" width="353">
The expectations component of overall sentiment was much firmer than reported at mid-month. The full-month index rose 8.7% to its highest level since March led by a 9.4% rise (-16.0% y/y) in expectations for personal finances. Expectations for business conditions during the next year also were firm and expectations for conditions during the next five years made up about all of a sharp July decline.
The current conditions index rose 8.1% and recovered all of a decline during June. The rise was due to a sharp increase in the index of whether now is a good time to buy large household goods, to the highest level since March (-26.3% y/y). The view of current personal finances also rose and made about half of the June decline (-36.5% y/y).
The opinion of government policy, which apparently influences economic expectations, gave back about half of its June improvement.
The mean expected rate of inflation during the next twelve months slipped m/m to 6.3% versus an initial expectation for 6.9%. During the next five years the expected inflation rate fell further to 3.5%, the lowest level since April.
The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver&#39;s USECON database, with details in the proprietary UMSCA database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">July</th>
<th scope="col">(Prelim.)</th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">July 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 Sentiment</td>
<td>61.2</td>
<td>56.6</td>
<td>56.4</td>
<td>59.8</td>
<td>-32.3% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>73.1</td>
<td>69.5</td>
<td>67.6</td>
<td>73.3</td>
<td>-30.0%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>53.5</td>
<td>48.3</td>
<td>49.2</td>
<td>51.1</td>
<td>-34.4%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
</body>
</html>

The University of Michigan's July reading of consumer sentiment rose 8.5% from June, an improvement from the read for early July which showed a 0.4% uptick versus the June average. The rise beat Consensus expectations for a reading of [...]

Michigan Consumer Sentiment Better Than Expected in July

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725e.jpg" width="353">
Sales new single-family homes in June dipped 0.6% to 530,000. The fall added to a 1.7% drop during May that was a much shallower decline than initially reported. The level of sales in June was down 61.8% from the July 2005 peak. Nevertheless, the latest level of sales beat expectations for 503,000.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725f.jpg" width="353">
By region sales in the South fell 2.0% and they are down 12.5% since December. In the West sales dipped 0.9% and that resulted in a 15.6% drop so far this year. Though sales in the Northeast recovered the May decline with a 5.3% gain, they remained down 28.6% since December. In the Midwest June sales rose 2.5%. So far this year this has been the star performing region as sales posted a 12.2% increase.
The median price for a new single-family home increased 1.4% to $230,900 after a 6.5% decline during May which was a deeper drop than reported initially. 
The number of new homes for sale fell 5.3% (-21.5% y/y) and reduced the inventory of unsold homes to the lowest level since December of 2004. The decline in the number of unsold homes has been greatest in the West (-23.9% y/y) but declines of similar magnitude have been logged elsewhere in the country.
The month&#39;s supply of new homes for sale again ticked lower m/m to 10.0 but that remained near the cycle&#39;s high. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">US New Homes</th>
<th scope="col">June</th>
<th scope="col">May</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">Total Sales (SAAR, 000s)</td>
<td>530</td>
<td>533</td>
<td>-33.2%</td>
<td>768</td>
<td>1,049</td>
<td>1,279</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>40</td>
<td>38</td>
<td>&nbsp;-37.5</td>
<td>64</td>
<td>64</td>
<td>81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>83</td>
<td>81</td>
<td>-27.2</td>
<td>118</td>
<td>161</td>
<td>203</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>293</td>
<td>299</td>
<td>-33.4</td>
<td>408</td>
<td>559</td>
<td>638</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>114</td>
<td>115</td>
<td>-34.9</td>
<td>178</td>
<td>266</td>
<td>356</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA, $)</td>
<td>230,900</td>
<td>227,700</td>
<td>-2.0</td>
<td>243,742</td>
<td>243,067</td>
<td>234,208</td>
</tr>
</tbody>
</table>
</body>
</html>

Sales new single-family homes in June dipped 0.6% to 530,000. The fall added to a 1.7% drop during May that was a much shallower decline than initially reported. The level of sales in June was down 61.8% from the July 2005 peak. [...]

U.S. New-Home Sales Dipped in June, Decline Stabilizing?

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725d.jpg" align="left" border="0" height="265" width="353">
The German CPI ex-energy inflation rate is still very
well-behaved with inflation on that score below 2% over 12-months and
nearer to 1% over three- and six-months. For the PPI ex energy trends
are worsening, however. Export and import prices excluding the effects
of energy &#8211; just reported - are both up by over 2% over twelve months.
On shorter horizons where they are accelerating sharply, those trends
may be real but since the data are not seasonally adjusted those
calculations are not so reliable. 
 

Still, what is disturbing about those trends is the clear
acceleration in the ex-petrol inflation rates over those less reliable
but shorter horizons. 
 

On balance German inflation does not seem imperiled. But the
ECB caps overall EMU inflation, not German inflation and as one of the
more price-stable countries in the Zone Germany still posts a headline
CPI that is up by 3.3% and an ex-energy result that is up by 1.9%. The
ex-energy number falls below the ECB CPI cap rate, but the ECB does not
have any ceiling except for the full CPI number. Perhaps behind the
closed doors of the meeting room the ECB Council takes some solace in
ex-energy inflation being better behaved, but not in public. 
 

More ominously, the export and import prices for Germany &#8211;
despite ongoing euro strength- suggest that more inflation pressures
may be leaking in apart from energy. All in all this is not a great
result for the month, although the report has its spots for those who
may wish to mount an argument of optimism. I suspect the ECB and the
usual band of inflation adverse German observers will see little good
in this report. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">German
International and Domestic Inflation Trends </th>
</tr>
</thead>
<tbody>
<tr class="grey5">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% m/m</td>
<td colspan="4">% Saar</td>
</tr>
<tr class="grey4">
<td class="firstcol">SA:</td>
<td>Jun-08</td>
<td>May-08</td>
<td>Apr-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr-Ago</td>
</tr>
<tr class="grey1">
<td class="firstcol">Export Prices</td>
<td>0.7%</td>
<td>0.4%</td>
<td>0.1%</td>
<td>4.9%</td>
<td>4.7%</td>
<td>2.7%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Import Prices</td>
<td>2.1%</td>
<td>2.3%</td>
<td>0.4%</td>
<td>20.6%</td>
<td>13.6%</td>
<td>8.8%</td>
<td>1.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">NSA</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="grey1">
<td class="firstcol">Exports excl-Petroleum</td>
<td>0.5%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.4%</td>
<td>4.6%</td>
<td>2.3%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Imports excl-Petroleum</td>
<td>0.5%</td>
<td>0.6%</td>
<td>0.3%</td>
<td>5.5%</td>
<td>6.3%</td>
<td>2.5%</td>
<td>1.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Memo: SA</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey1">
<td class="firstcol">CPI</td>
<td>0.4%</td>
<td>0.5%</td>
<td>0.0%</td>
<td>3.4%</td>
<td>3.1%</td>
<td>3.3%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">CPI excl Energy</td>
<td>0.2%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>0.8%</td>
<td>1.2%</td>
<td>1.9%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">PPI</td>
<td>1.0%</td>
<td>1.1%</td>
<td>0.9%</td>
<td>12.6%</td>
<td>9.4%</td>
<td>6.6%</td>
<td>1.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">PPI excl Energy</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>3.6%</td>
<td>4.2%</td>
<td>2.9%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>
</body></html>

The German CPI ex-energy inflation rate is still very well-behaved with inflation on that score below 2% over 12-months and nearer to 1% over three- and six-months. For the PPI ex energy trends are worsening, however. Export and [...]

Excluding Energy German Export and Import Prices Break Through 2% Mark

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725c.jpg" align="left" border="0" height="265" width="353">
France&#8217;s formerly stable service sector is weakening: The
Insee indicator that was above its mean level just three short months
ago is now falling sharply. The service sector barometer is now in the
37th percentile of its range with the outlook in the 35th percentile of
its range at a reading of -11 compared with an average of -2. 
 

Observed sales are in the 62nd percentile of that series&#8217;
historic range while expected sales are ominously in the 40th
percentile of their range. The future is expected to be worse. Sales
prices are in the high seventies to 8oth percentiles. While employment
observed over the past three-months was in the 80th percentile of this
historic range for the next three-months the reading for expected
employment conditions is in the bottom 20th percentile. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="11" scope="col">France INSEE Services Survey Jan 2000-date </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jul 08</td>
<td>Jun 08</td>
<td>May 08</td>
<td>Apr 08</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr>
<td class="firstcol">Climate Indicator</td>
<td>94</td>
<td>101</td>
<td>102</td>
<td>103</td>
<td>36.7</td>
<td>68</td>
<td>113</td>
<td>83</td>
<td>30</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 3-Mo MAV</td>
<td>99</td>
<td>102</td>
<td>103</td>
<td>104</td>
<td>50.6</td>
<td>55</td>
<td>113</td>
<td>85</td>
<td>28</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 12-Mo MAV</td>
<td>106</td>
<td>108</td>
<td>109</td>
<td>109</td>
<td>79.7</td>
<td>24</td>
<td>110</td>
<td>91</td>
<td>20</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Outlook</td>
<td>-11</td>
<td>-6</td>
<td>-4</td>
<td>-3</td>
<td>35.5</td>
<td>75</td>
<td>9</td>
<td>-22</td>
<td>31</td>
<td>-2</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Sales</td>
</tr>
<tr>
<td class="firstcol">Observed 3-Mos</td>
<td>7</td>
<td>11</td>
<td>11</td>
<td>11</td>
<td>62.1</td>
<td>41</td>
<td>18</td>
<td>-11</td>
<td>29</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">Expected 3-Mos</td>
<td>1</td>
<td>8</td>
<td>10</td>
<td>11</td>
<td>40.7</td>
<td>70</td>
<td>17</td>
<td>-10</td>
<td>27</td>
<td>7</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Sales Price</td>
</tr>
<tr>
<td class="firstcol">Observed over 3-Mos</td>
<td>3</td>
<td>5</td>
<td>5</td>
<td>4</td>
<td>77.8</td>
<td>7</td>
<td>5</td>
<td>-4</td>
<td>9</td>
<td>0</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>3</td>
<td>3</td>
<td>3</td>
<td>3</td>
<td>80.0</td>
<td>4</td>
<td>5</td>
<td>-5</td>
<td>10</td>
<td>0</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Employment</td>
</tr>
<tr>
<td class="firstcol">Observed over 3-Mos</td>
<td>12</td>
<td>11</td>
<td>17</td>
<td>14</td>
<td>82.1</td>
<td>9</td>
<td>17</td>
<td>-11</td>
<td>28</td>
<td>5</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>0</td>
<td>5</td>
<td>12</td>
<td>10</td>
<td>20.8</td>
<td>68</td>
<td>19</td>
<td>-5</td>
<td>24</td>
<td>5</td>
</tr>
</tbody>
</table>
</body></html>

France’s formerly stable service sector is weakening: The Insee indicator that was above its mean level just three short months ago is now falling sharply. The service sector barometer is now in the 37th percentile of its range with [...]

France’s Insee Services Indicator Plunges as Weakness Spreads

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725a.jpg" width="353">
Orders for durable goods rose 0.8% last month and the increase followed a 0.1% uptick during May. Consensus expectations had been for a 0.4% decline during June. The figures of late, however, have been very much influenced by weakness in the transportation sector. Less transportation orders popped 2.0% during June and they have risen 6.2% during the past twelve months.
Lower orders for aircraft &amp; parts dragged the June orders total down with a 20.3% decline (-30.4% y/y). That drop reflected an 8.6% shortfall (+53.6 y/y) in defense orders as well as a 25.1% drop (-45.2% y/y) in nondefense orders.
Orders for nondefense capital goods fell 3.2% last month but this decline also reflected weakness in aircraft orders. Less aircraft, nondefense capital goods orders rose 1.4% during June and these orders have risen 1.6% since yearend. The y/y gain of 5.5% compares to a 2.7% decline during all of last year. During the last ten years there has been an 80% correlation between the y/y gain in nondefense capital goods orders and the rise in equipment &amp; software spending in the GDP accounts. The correlation with capital goods shipments is, as one would expect, a larger 92%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725b.jpg" width="353">
To the upside during June were primary metal orders. They surged 5.1% and are up 10.7% this year, 22.7% y/y. Orders for machinery recovered most of the prior month&#39;s decline with a 2.3% (11.8% y/y) rise during June. Year-to-date machinery orders are, however, only near last year&#39;s rate of gain with a 1.6% rise after last year&#39;s 0.6% uptick.Orders for computers &amp; related products slipped 0.5% but they are up 1.1% so far this year. New orders for communications equipment reversed all of the prior month&#39;s rise with a 4.4% decline and they are down 4.7% so far this year.
Overall shipments of durable goods rose 0.5% and made up about half of the May decline. Less transportation shipments recovered all of the May decline with a 0.2% (2.6% y/y) uptick.
Inventories of durable goods rose 0.5% during June, about as they did during the prior two months. Year-to-date inventories increased 3.6%, about the same as they did last year. Less transportation inventories are up 2.5%, about as they were last year.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a></th>
<th scope="col">June</th>
<th scope="col">May</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">Durable Goods Orders</td>
<td>0.8%</td>
<td>0.1%</td>
<td>-1.1%</td>
<td>1.4%</td>
<td>6.2%</td>
<td>10.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>2.0%</td>
<td>-0.5%</td>
<td>6.2%</td>
<td>-0.3%</td>
<td>9.1%</td>
<td>9.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-3.2%</td>
<td>0.2%</td>
<td>-5.7%</td>
<td>3.5%</td>
<td>9.4%</td>
<td>17.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>1.4%</td>
<td>-0.1%</td>
<td>5.5%</td>
<td>-2.7%</td>
<td>10.7%</td>
<td>11.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Orders for durable goods rose 0.8% last month and the increase followed a 0.1% uptick during May. Consensus expectations had been for a 0.4% decline during June. The figures of late, however, have been very much influenced by weakness [...]

U.S. Durable Goods Orders Rose. Less Transportation Orders Jumped

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725a.jpg" align="left" border="0" height="265" width="353">
Orders for durable goods rose 0.8% last month and the increase
followed a 0.1% uptick during May. Consensus expectations had been for
a 0.4% decline during June. The figures of late, however, have been
very much influenced by weakness in the transportation sector. Less
transportation orders popped 2.0% during June and they have risen 6.2%
during the past twelve months.
Lower orders for aircraft &amp; parts dragged the June
orders total down with a 20.3% decline (-30.4% y/y). That drop
reflected an 8.6% shortfall (+53.6 y/y) in defense orders as well as a
25.1% drop (-45.2% y/y) in nondefense orders.
Orders for nondefense capital goods fell 3.2% last month but
this decline also reflected weakness in aircraft orders. Less aircraft,
nondefense capital goods orders rose 1.4% during June and these orders
have risen 1.6% since yearend. The y/y gain of 5.5% compares to a 2.7%
decline during all of last year. During the last ten years there has
been an 80% correlation between the y/y gain in nondefense capital
goods orders and the rise in equipment &amp; software spending in
the GDP accounts. The correlation with capital goods shipments is, as
one would expect, a larger 92%.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725b.jpg" align="right" border="0" height="265" width="353">
To the upside during June were primary metal orders. They
surged 5.1% and are up 10.7% this year, 22.7% y/y. Orders for machinery
recovered most of the prior month's decline with a 2.3% (11.8% y/y)
rise during June. Year-to-date machinery orders are, however, only near
last year's rate of gain with a 1.6% rise after last year's 0.6%
uptick.Orders for computers &amp; related products slipped 0.5% but
they are up 1.1% so far this year. New orders for communications
equipment reversed all of the prior month's rise with a 4.4% decline
and they are down 4.7% so far this year.
Overall shipments of durable goods rose 0.5% and made up about
half of the May decline. Less transportation shipments recovered all of
the May decline with a 0.2% (2.6% y/y) uptick.
Inventories of durable goods rose 0.5% during June, about as
they did during the prior two months. Year-to-date inventories
increased 3.6%, about the same as they did last year. Less
transportation inventories are up 2.5%, about as they were last year.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS
Classification</a></th>
<th scope="col">June</th>
<th scope="col">May</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">Durable Goods Orders</td>
<td>0.8%</td>
<td>0.1%</td>
<td>-1.1%</td>
<td>1.4%</td>
<td>6.2%</td>
<td>10.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>2.0%</td>
<td>-0.5%</td>
<td>6.2%</td>
<td>-0.3%</td>
<td>9.1%</td>
<td>9.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-3.2%</td>
<td>0.2%</td>
<td>-5.7%</td>
<td>3.5%</td>
<td>9.4%</td>
<td>17.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>1.4%</td>
<td>-0.1%</td>
<td>5.5%</td>
<td>-2.7%</td>
<td>10.7%</td>
<td>11.6%</td>
</tr>
</tbody>
</table>
Michigan Consumer Sentiment Better
Than Expected in July 
by <a href="/comment/Moeller.html">Tom
Moeller</a> July 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725g.jpg" align="left" border="0" height="265" width="353">
The University of Michigan's July reading of consumer
sentiment rose 8.5% from June, an improvement from the read for early
July which showed a 0.4% uptick versus the June average. The rise beat
Consensus expectations for a reading of 56.3 which would have been
unchanged from June. The latest level of sentiment was its highest
since April.
During the last ten years there has been a 47% correlation
between the level of sentiment and the three month change in real
consumer spending.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725h.jpg" align="right" border="0" height="265" width="353">
The expectations component of overall sentiment was much
firmer than reported at mid-month. The full-month index rose 8.7% to
its highest level since March led by a 9.4% rise (-16.0% y/y) in
expectations for personal finances. Expectations for business
conditions during the next year also were firm and expectations for
conditions during the next five years made up about all of a sharp July
decline.
The current conditions index rose 8.1% and recovered all of a
decline during June. The rise was due to a sharp increase in the index
of whether now is a good time to buy large household goods, to the
highest level since March (-26.3% y/y). The view of current personal
finances also rose and made about half of the June decline (-36.5% y/y).
The opinion of government policy, which apparently influences
economic expectations, gave back about half of its June improvement.
The mean expected rate of inflation during the next twelve
months slipped m/m to 6.3% versus an initial expectation for 6.9%.
During the next five years the expected inflation rate fell further to
3.5%, the lowest level since April.
The University of Michigan survey is not seasonally
adjusted.The reading is based on telephone interviews with about 500
households at month-end; the mid-month results are based on about 300
interviews. The summary indexes are in Haver's USECON database,
with details in the proprietary UMSCA database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">July</th>
<th scope="col">(Prelim.)</th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">July 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 Sentiment</td>
<td>61.2</td>
<td>56.6</td>
<td>56.4</td>
<td>59.8</td>
<td>-32.3% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>73.1</td>
<td>69.5</td>
<td>67.6</td>
<td>73.3</td>
<td>-30.0%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>53.5</td>
<td>48.3</td>
<td>49.2</td>
<td>51.1</td>
<td>-34.4%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
U.S. New-Home Sales Dipped in
June, Decline Stabilizing? 
by <a href="/comment/Moeller.html">Tom
Moeller</a> July 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725e.jpg" align="left" border="0" height="265" width="353">
Sales new single-family homes in June dipped 0.6% to 530,000.
The fall added to a 1.7% drop during May that was a much shallower
decline than initially reported. The level of sales in June was down
61.8% from the July 2005 peak. Nevertheless, the latest level of sales
beat expectations for 503,000.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725f.jpg" align="right" border="0" height="265" width="353">
By region sales in the South fell 2.0% and they are down 12.5%
since December. In the West sales dipped 0.9% and that resulted in a
15.6% drop so far this year. Though sales in the Northeast recovered
the May decline with a 5.3% gain, they remained down 28.6% since
December. In the Midwest June sales rose 2.5%. So far this year this
has been the star performing region as sales posted a 12.2% increase.
The median price for a new single-family home increased 1.4%
to $230,900 after a 6.5% decline during May which was a deeper drop
than reported initially. 
 

The number of new homes for sale fell 5.3%
(-21.5% y/y) and reduced the inventory of unsold homes to the lowest
level since December of 2004. The decline in the number of unsold homes
has been greatest in the West (-23.9% y/y) but declines of similar
magnitude have been logged elsewhere in the country.
The month's supply of new homes for sale again ticked lower
m/m to 10.0 but that remained near the cycle's high. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">US
New Homes</th>
<th scope="col">June</th>
<th scope="col">May</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">Total Sales
(SAAR, 000s)</td>
<td>530</td>
<td>533</td>
<td>-33.2%</td>
<td>768</td>
<td>1,049</td>
<td>1,279</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>40</td>
<td>38</td>
<td>&nbsp;-37.5</td>
<td>64</td>
<td>64</td>
<td>81</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>83</td>
<td>81</td>
<td>-27.2</td>
<td>118</td>
<td>161</td>
<td>203</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>293</td>
<td>299</td>
<td>-33.4</td>
<td>408</td>
<td>559</td>
<td>638</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>114</td>
<td>115</td>
<td>-34.9</td>
<td>178</td>
<td>266</td>
<td>356</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>230,900</td>
<td>227,700</td>
<td>-2.0</td>
<td>243,742</td>
<td>243,067</td>
<td>234,208</td>
</tr>
</tbody>
</table>
France&#8217;s Insee Services
IndicatorPlunges as Weakness Spreads 
by <a href="/comment/Brusca.html">Robert
Brusca</a> July 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725c.jpg" align="left" border="0" height="265" width="353">
France&#8217;s formerly stable service sector is weakening: The
Insee indicator that was above its mean level just three short months
ago is now falling sharply. The service sector barometer is now in the
37th percentile of its range with the outlook in the 35th percentile of
its range at a reading of -11 compared with an average of -2. 
 

Observed sales are in the 62nd percentile of that series&#8217;
historic range while expected sales are ominously in the 40th
percentile of their range. The future is expected to be worse. Sales
prices are in the high seventies to 8oth percentiles. While employment
observed over the past three-months was in the 80th percentile of this
historic range for the next three-months the reading for expected
employment conditions is in the bottom 20th percentile. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">France
INSEE Services Survey Jan 2000-date </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jul 
08</td>
<td>Jun 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr>
<td class="firstcol">Climate Indicator</td>
<td>94</td>
<td>101</td>
<td>102</td>
<td>103</td>
<td>36.7</td>
<td>68</td>
<td>113</td>
<td>83</td>
<td>30</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 3-Mo MAV</td>
<td>99</td>
<td>102</td>
<td>103</td>
<td>104</td>
<td>50.6</td>
<td>55</td>
<td>113</td>
<td>85</td>
<td>28</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Climate: 12-Mo MAV</td>
<td>106</td>
<td>108</td>
<td>109</td>
<td>109</td>
<td>79.7</td>
<td>24</td>
<td>110</td>
<td>91</td>
<td>20</td>
<td>102</td>
</tr>
<tr>
<td class="firstcol">Outlook</td>
<td>-11</td>
<td>-6</td>
<td>-4</td>
<td>-3</td>
<td>35.5</td>
<td>75</td>
<td>9</td>
<td>-22</td>
<td>31</td>
<td>-2</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Sales</td>
</tr>
<tr>
<td class="firstcol">Observed 3-Mos</td>
<td>7</td>
<td>11</td>
<td>11</td>
<td>11</td>
<td>62.1</td>
<td>41</td>
<td>18</td>
<td>-11</td>
<td>29</td>
<td>6</td>
</tr>
<tr>
<td class="firstcol">Expected 3-Mos</td>
<td>1</td>
<td>8</td>
<td>10</td>
<td>11</td>
<td>40.7</td>
<td>70</td>
<td>17</td>
<td>-10</td>
<td>27</td>
<td>7</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Sales
Price</td>
</tr>
<tr>
<td class="firstcol">Observed over 3-Mos</td>
<td>3</td>
<td>5</td>
<td>5</td>
<td>4</td>
<td>77.8</td>
<td>7</td>
<td>5</td>
<td>-4</td>
<td>9</td>
<td>0</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>3</td>
<td>3</td>
<td>3</td>
<td>3</td>
<td>80.0</td>
<td>4</td>
<td>5</td>
<td>-5</td>
<td>10</td>
<td>0</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="11">Employment</td>
</tr>
<tr>
<td class="firstcol">Observed over 3-Mos</td>
<td>12</td>
<td>11</td>
<td>17</td>
<td>14</td>
<td>82.1</td>
<td>9</td>
<td>17</td>
<td>-11</td>
<td>28</td>
<td>5</td>
</tr>
<tr>
<td class="firstcol">Expected over 3-Mos</td>
<td>0</td>
<td>5</td>
<td>12</td>
<td>10</td>
<td>20.8</td>
<td>68</td>
<td>19</td>
<td>-5</td>
<td>24</td>
<td>5</td>
</tr>
</tbody>
</table>
Excluding Energy German Export and
Import Prices Break Through 2% Mark 
by <a href="/comment/Brusca.html">Robert
Brusca</a> July 25, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080725d.jpg" align="left" border="0" height="265" width="353">
The German CPI ex-energy inflation rate is still very
well-behaved with inflation on that score below 2% over 12-months and
nearer to 1% over three- and six-months. For the PPI ex energy trends
are worsening, however. Export and import prices excluding the effects
of energy &#8211; just reported - are both up by over 2% over twelve months.
On shorter horizons where they are accelerating sharply, those trends
may be real but since the data are not seasonally adjusted those
calculations are not so reliable. 
 

Still, what is disturbing about those trends is the clear
acceleration in the ex-petrol inflation rates over those less reliable
but shorter horizons. 
 

On balance German inflation does not seem imperiled. But the
ECB caps overall EMU inflation, not German inflation and as one of the
more price-stable countries in the Zone Germany still posts a headline
CPI that is up by 3.3% and an ex-energy result that is up by 1.9%. The
ex-energy number falls below the ECB CPI cap rate, but the ECB does not
have any ceiling except for the full CPI number. Perhaps behind the
closed doors of the meeting room the ECB Council takes some solace in
ex-energy inflation being better behaved, but not in public. 
 

More ominously, the export and import prices for Germany &#8211;
despite ongoing euro strength- suggest that more inflation pressures
may be leaking in apart from energy. All in all this is not a great
result for the month, although the report has its spots for those who
may wish to mount an argument of optimism. I suspect the ECB and the
usual band of inflation adverse German observers will see little good
in this report. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">German
International and Domestic Inflation Trends </th>
</tr>
</thead>
<tbody>
<tr class="grey5">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% m/m</td>
<td colspan="4">% Saar</td>
</tr>
<tr class="grey4">
<td class="firstcol">SA:</td>
<td>Jun-08</td>
<td>May-08</td>
<td>Apr-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr-Ago</td>
</tr>
<tr class="grey1">
<td class="firstcol">Export Prices</td>
<td>0.7%</td>
<td>0.4%</td>
<td>0.1%</td>
<td>4.9%</td>
<td>4.7%</td>
<td>2.7%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Import Prices</td>
<td>2.1%</td>
<td>2.3%</td>
<td>0.4%</td>
<td>20.6%</td>
<td>13.6%</td>
<td>8.8%</td>
<td>1.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">NSA</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="grey1">
<td class="firstcol">Exports excl-Petroleum</td>
<td>0.5%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.4%</td>
<td>4.6%</td>
<td>2.3%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Imports excl-Petroleum</td>
<td>0.5%</td>
<td>0.6%</td>
<td>0.3%</td>
<td>5.5%</td>
<td>6.3%</td>
<td>2.5%</td>
<td>1.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Memo: SA</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey1">
<td class="firstcol">CPI</td>
<td>0.4%</td>
<td>0.5%</td>
<td>0.0%</td>
<td>3.4%</td>
<td>3.1%</td>
<td>3.3%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">CPI excl Energy</td>
<td>0.2%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>0.8%</td>
<td>1.2%</td>
<td>1.9%</td>
<td>2.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">PPI</td>
<td>1.0%</td>
<td>1.1%</td>
<td>0.9%</td>
<td>12.6%</td>
<td>9.4%</td>
<td>6.6%</td>
<td>1.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">PPI excl Energy</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>3.6%</td>
<td>4.2%</td>
<td>2.9%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>
</body></html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080724d.jpg" align="left" border="0" height="265" width="353">
There is little let up in the pace of the drop in the Euro
Area MFG and services PMIs. Indeed their rate of decline has picked up
pace. The services PMI has been in existence for 31 months and it is at
its lowest level since its inception. The MFG is at its lowest level
for that period as well. 
 

The MFG index has been in existence much longer. And for that
longer period back to 1996 it stands in the 26th percentile of its
range - a low reading. 
 

Except for January of this year when the services index fell
very sharply, the past two months represent the fastest six month rate
of decline for the services index. For MFG the July decline is the
fastest six month decline in this cycle. This suggests that the
downward pressure on the Euro Area economies is becoming more intense. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col"> FLASH
Readings</th>
</tr>
<tr class="even">
<th colspan="3" scope="col">Markit
PMIs for the
Euro-Area-13</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Jul-08</td>
<td>47.54</td>
<td>48.26</td>
</tr>
<tr class="grey1">
<td class="firstcol">Jun-08</td>
<td>49.07</td>
<td>49.46</td>
</tr>
<tr>
<td class="firstcol">May-08</td>
<td>50.52</td>
<td>50.59</td>
</tr>
<tr class="grey1">
<td class="firstcol">Apr-08</td>
<td>50.85</td>
<td>51.78</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">Averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>49.04</td>
<td>49.44</td>
</tr>
<tr class="grey1">
<td class="firstcol">6-Mo</td>
<td>50.37</td>
<td>50.67</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>51.56</td>
<td>52.54</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">31-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>57.61</td>
<td>61.21</td>
</tr>
<tr class="grey1">
<td class="firstcol">Low</td>
<td>47.54</td>
<td>48.26</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>0.0%</td>
<td>0.0%</td>
</tr>
</tbody>
</table>
</body></html>

There is little let up in the pace of the drop in the Euro Area MFG and services PMIs. Indeed their rate of decline has picked up pace. The services PMI has been in existence for 31 months and it is at its lowest level since its [...]

The MFG and Services PMIs Simply are Dropping Rapidly

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?

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

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

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

250801A4.jpg

250801D4.jpg

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.

250801C4.jpg

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.

250801X4.jpg

250801F4.jpg

- 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

250801F20.jpg

250801G20.jpg

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.

250801H20.jpg

250801I20.jpg

- 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

250801A.jpg

250801B.jpg

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.

250801C.jpg

250801D.jpg

- 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

250801N40.jpg

250801O40.jpg

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.

250801P40.jpg

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

250801E.jpg

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.

250801.jpg

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

Jump to:

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

Michigan Consumer Sentiment Better Than Expected in July

U.S. New-Home Sales Dipped in June, Decline Stabilizing?

Excluding Energy German Export and Import Prices Break Through 2% Mark

France’s Insee Services Indicator Plunges as Weakness Spreads

U.S. Durable Goods Orders Rose. Less Transportation Orders Jumped

U.S. Durable Goods Orders Rose. Less Transportation Orders Jumped

The MFG and Services PMIs Simply are Dropping Rapidly