Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718a.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) reported that its July Composite Housing Market Index fell to 16 from 18 in June. The latest level was the lowest in the series&#39; history which extends back to 1984 and it was more than two-thirds lower than the high during 2004.
During the last twenty years there has been a 76% correlation between the y/y change in the Composite Index and the change in single family housing starts.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718b.jpg" width="353">
The index for single-family detached homes also fell to a new series&#39; low while builders&#39; view of single-family home sales during the next six months fell to the series&#39; low.
Except for a modest uptick in the Northeast, the builders&#39; index in the country&#39;s regions continued to decline.
Traffic of prospective home buyers declined and hit a new low for the series.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions good than poor.
Visit the <a href="http://www.nahb.org">National Association of Home Builders</a>.
The Mortgage Crisis: Let Markets Work, But Compensate the Truly Needy from the Federal Reserve Bank of St. Louis is available <a href="http://stlouisfed.org/publications/re/2008/c/pdf/mortgage.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/SURVEYS/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a></th>
<th scope="col">July</th>
<th scope="col">June &nbsp;</th>
<th scope="col">July &#39;07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>16</td>
<td>18</td>
<td>24</td>
<td>27</td>
<td>42</td>
<td>67</td>
</tr>
</tbody>
</table>
</body>
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The National Association of Home Builders' (NAHB) reported that its July Composite Housing Market Index fell to 16 from 18 in June. The latest level was the lowest in the series' history which extends back to 1984 and it was more than [...]

U.S. NAHB Housing Market Index Fell To A Record Low

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718c.jpg" width="353">
The Philadelphia Federal Reserve Bank indicated that its July Index of General Business conditions in the manufacturing sector held roughly stable at -16.3. The prior month&#39;s index reading was a low -17.1 and a level of -15 had been expected for this month.
The Philadelphia Fed constructs a diffusion index for total business activity and each of the sub indexes. The business conditions index reflects a separate survey question, not the sub-indexes.
During the last ten years there has been a 61% correlation between the level of the Philadelphia Fed Business Conditions Index and the three-month growth in factory sector industrial production. There has been a 43% correlation with q/q growth in real GDP.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718d.jpg" width="353">
The new orders sub-index held at its June level. The reading of -12.1 was still, however, up off the absolute low of -18.8 in April. The shipments index showed the same pattern at -8.0.
The employment index, at -7.3, recently showed the same pattern as orders and shipments.Though a somewhat improved 16.9% of respondents expected to increase employment levels, 24.2% expected to decrease them.
The prices paid index again surged, to the highest level since early-1980. During the last ten years there has been a 67% correlation between the prices paid index and the three-month growth in the intermediate goods PPI. There has been an 82% correlation with the change in core intermediate goods prices.
The separate index of expected business conditions in six months fell for the second month, to 18.0. The recent levels of index were well below the full-year, 2007 reading of 24.7. Expectations for unfilled orders and delivery times fell sharply while new orders were unchanged and employment rose. The prices slipped after the June surge.
The latest Business Outlook Survey from the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/files/bos/bos0708.html">here</a>.
The Changing Nature of the U.S. Balance of Payments from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/current_issues/ci14-4.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">Philadelphia Fed (%)</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">July &#39;07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>-16.3</td>
<td>-17.1</td>
<td>16.9</td>
<td>5.1</td>
<td>8.1</td>
<td>11.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>75.6</td>
<td>&nbsp;69.3</td>
<td>&nbsp;25.8</td>
<td>26.4</td>
<td>36.6</td>
<td>40.1</td>
</tr>
</tbody>
</table>
</body>
</html>

The Philadelphia Federal Reserve Bank indicated that its July Index of General Business conditions in the manufacturing sector held roughly stable at -16.3. The prior month's index reading was a low -17.1 and a level of -15 had been [...]

Philadelphia Fed Index Stable & Low, Prices Surged

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718c.jpg" align="left" border="0" height="265" width="353">
The Philadelphia Federal Reserve Bank indicated that its July
Index of General Business conditions in the manufacturing sector held
roughly stable at -16.3. The prior month's index reading was a low
-17.1 and a level of -15 had been expected for this month.
The Philadelphia Fed constructs a diffusion index for total
business activity and each of the sub indexes. The business conditions
index reflects a separate survey question, not the sub-indexes.
During the last ten years there has been a 61% correlation
between the level of the Philadelphia Fed Business Conditions Index and
the three-month growth in factory sector industrial production. There
has been a 43% correlation with q/q growth in real GDP.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718d.jpg" align="right" border="0" height="265" width="353">
The new orders sub-index held at its June level. The reading
of -12.1 was still, however, up off the absolute low of -18.8 in April.
The shipments index showed the same pattern at -8.0.
The employment index, at -7.3, recently showed the same
pattern as orders and shipments.Though a somewhat improved 16.9% of
respondents expected to increase employment levels, 24.2% expected to
decrease them.
The prices paid index again surged, to the highest level since
early-1980. During the last ten years there has been a 67% correlation
between the prices paid index and the three-month growth in the
intermediate goods PPI. There has been an 82% correlation with the
change in core intermediate goods prices.
The separate index of expected business conditions in six
months fell for the second month, to 18.0. The recent levels of index
were well below the full-year, 2007 reading of 24.7. Expectations for
unfilled orders and delivery times fell sharply while new orders were
unchanged and employment rose. The prices slipped after the June surge.
The latest Business Outlook Survey from the Federal
Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/files/bos/bos0708.html">here</a>.
The Changing Nature of the U.S. Balance of Payments from
the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/current_issues/ci14-4.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">Philadelphia
Fed (%)</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">July '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Activity Index</td>
<td>-16.3</td>
<td>-17.1</td>
<td>16.9</td>
<td>5.1</td>
<td>8.1</td>
<td>11.5</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index</td>
<td>75.6</td>
<td>&nbsp;69.3</td>
<td>&nbsp;25.8</td>
<td>26.4</td>
<td>36.6</td>
<td>40.1</td>
</tr>
</tbody>
</table>
U.S. NAHB Housing Market Index
Fell To A Record Low 
by <a href="/comment/Moeller.html">Tom
Moeller</a> July 18, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718a.jpg" align="left" border="0" height="265" width="353">
The National Association of Home Builders' (NAHB) reported
that its July Composite Housing Market Index fell to 16 from 18 in
June. The latest level was the lowest in the series' history which
extends back to 1984 and it was more than two-thirds lower than the
high during 2004.
During the last twenty years there has been a 76% correlation
between the y/y change in the Composite Index and the change in single
family housing starts.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718b.jpg" align="right" border="0" height="265" width="353">
The index for single-family detached homes also fell to a new
series' low while builders' view of single-family home sales during the
next six months fell to the series' low.
Except for a modest uptick in the Northeast, the builders'
index in the country's regions continued to decline.
Traffic of prospective home buyers declined and hit a new low
for the series.
The NAHB index is a diffusion index based on a survey of
builders. Readings above 50 signal that more builders view conditions
good than poor.
Visit the <a href="http://www.nahb.org">National
Association of Home Builders</a>.
The Mortgage Crisis: Let Markets
Work, But Compensate the Truly Needy from the Federal Reserve
Bank of St. Louis is available <a href="http://stlouisfed.org/publications/re/2008/c/pdf/mortgage.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/SURVEYS/@S4/@S4.HTM">Nat'l
Association of Home Builders</a></th>
<th scope="col">July</th>
<th scope="col">June
&nbsp;</th>
<th scope="col">July '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>16</td>
<td>18</td>
<td>24</td>
<td>27</td>
<td>42</td>
<td>67</td>
</tr>
</tbody>
</table>
French and Italian Orders ScreamWEAKNESS!! 
by <a href="/comment/Brusca.html">Robert
Brusca</a> July 18, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080718e.jpg" align="left" border="0" height="265" width="353">
WEAKNESS!! French and Italian industrial orders fell sharply
in May joining the chorus of Euro signals that are screaming
&#8216;weakness!&#8217; For each country both domestic and foreign orders fell
sharply. Each country had posted an increase in domestic orders in
April. Yet in May Yr/Yr orders are off and France&#8217;s orders are off very
sharply. Both have foreign orders off sharply Yr/Yr.

Square one? One thing that seems clear is that the setback to
growth is just beginning. Yet, ECB President Trichet says that EMU
could hit its low in Q2 or Q3 then begin a moderate recovery. This is a
very upbeat view of the economic circumstances given that it is July
and the data for May and June are just beginning to show significant
setbacks while more topical outlook surveys have been faltering for
some time.

Boom/Bust - The average of French and Italian foreign orders
growth is the weakest since May of 2003. The falloff is from a 20%
Yr/Yr increase in June of 2007 to a Yr/Yr decline in foreign orders of
6.1%, just 11 months later. This is a clear boom/bust scenario for
foreign orders in these two key EMU nations. The risk in such a sharp
turnaround is that problems can develop and spread since firms usually
cannot predict and be prepared for such a sharp change in trend. Both
Italy and France are affected by a sharp deceleration in order growth.

Undue optimism? On balance, the risk to e-Zone growth seems
highly likely to extend past Q2 and probably past Q3 as well. Italy and
France are likely very representative of the condition other EMU
nations. Trichet seems to be promoting a &#8216;best case&#8217; scenario of sorts
even as growth in the world economy is just coming into the grip of a
decelerating phase. Monetary policies have not shifted to accommodation
so the expectation of a bottom seems premature and without foundation
especially for the e-zone where the last policy act was a rate HIKE and
where the currency is still moving higher.

Monetary stimulus: lacking or ineffective - Only in the US
where the Fed cut official rates has there been an attempt at
stimulative central bank action of any degree. But the Fed&#8217;s policy
shift has been &#8216;undone&#8217; by private sector credit policy decisions that
have result in higher market rates as official rates were cut. The
attempt at stimulus seems to have been blunted. In its recent outlook
the IMF hiked various world regional growth estimates based on water
under the bridge (experienced Q1;Q2 growth), but registered increased-
not diminished &#8211; concerns for the period ahead &#8211; especially for the
individual quarters of the second half.

Fiscal stimulus, ditto - On balance, it is hard to see what
creates the quick turnaround that Trichet foresees and the IMF does
not. Only in the US has there been a stimulative fiscal policy
response, although the UK seems to be considering rule changes that
might give it some flexibility to act on that front as well. For the
most part the slide to weaker growth seems to be in its infancy not in
a mature stage that is about to run its course. To the grief of China
the weakness could come in its most intense form just as the Olympics
are getting not gear.

Decoupling view decouples from reality - All views of
de-coupling from the US down-cycle have been cast aside. Wall Street
strategists that recommended a de-coupling investment strategy have
rescinded their support of it. That should be enough to underline how
much the private sector disagrees with the view held by Mr Trichet. Not
only will Europe not evade the encroaching slowdown or snap out of it
quickly, but there is increasing concern about the impact of the
slowdown on the fast growing &#8216;developing world&#8217;.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Italy
Orders </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Saar exept m/m</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>
</tr>
<tr class="grey3">
<td class="firstcol">Total</td>
<td>-3.1%</td>
<td>0.5%</td>
<td>-0.9%</td>
<td>-13.4%</td>
<td>-8.2%</td>
<td>-1.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Foreign</td>
<td>-2.0%</td>
<td>-1.6%</td>
<td>-0.8%</td>
<td>-16.6%</td>
<td>-12.6%</td>
<td>-3.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Domestic</td>
<td>-3.6%</td>
<td>1.6%</td>
<td>-0.9%</td>
<td>-11.4%</td>
<td>-5.7%</td>
<td>0.2%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Sales</td>
<td>-1.7%</td>
<td>2.2%</td>
<td>-1.6%</td>
<td>-4.3%</td>
<td>3.3%</td>
<td>0.5%</td>
</tr>
<tr class="grey1">
<td colspan="7" class="firstcol">French
Orders</td>
</tr>
<tr class="grey1">
<td class="firstcol">Saar exept m/m</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>
</tr>
<tr class="grey3">
<td class="firstcol">Total</td>
<td>-4.6%</td>
<td>4.5%</td>
<td>-6.6%</td>
<td>-24.6%</td>
<td>-9.2%</td>
<td>-4.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Foreign</td>
<td>-8.4%</td>
<td>5.3%</td>
<td>-6.1%</td>
<td>-32.5%</td>
<td>-12.0%</td>
<td>-8.8%</td>
</tr>
</tbody>
</table>
</body></html>

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717g.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s goods trade deficit emerged in May after April posted
a surplus. The current deficit widened. Imports are now faltering with
capital goods and transport categories showing outright declines Yr/Yr
as domestic weakness takes its toll. But weak exports will shrink the
trade deficit and it is instead expanding. That is because exports for
now are falling faster than imports. Total exports fell at a 23% annual
rate over three months and are up by just 2.6% yr/yr. Europe is slowing
down and now Italy is facing such weak demand for its goods due to a
strong euro and weakening growth abroad that its domestic weakness is
being overwhelmed by weakness from these other sources. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col">Italy's Trade Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">m/mo % monthly rate</td>
<td colspan="4">Period Specified saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</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>
</tr>
<tr>
<td class="firstcol">Current Account Bal</td>
<td>&#8364;&#8364; (6,325)</td>
<td>&#8364;&#8364; (2,816)</td>
<td>&#8364;&#8364; (5,203)</td>
<td>&#8364;&#8364; (4,781)</td>
<td>&#8364;&#8364; (4,209)</td>
<td>&#8364;&#8364; (3,548)</td>
<td>&#8364;&#8364; (3,290)</td>
</tr>
<tr>
<td class="firstcol">Goods Balance</td>
<td>&#8364;&#8364; (237)</td>
<td>&#8364;&#8364; 692</td>
<td>&#8364;&#8364; 46</td>
<td>&#8364;&#8364; 167</td>
<td>&#8364;&#8364; 251</td>
<td>&#8364;&#8364; 355</td>
<td>&#8364;&#8364; (339)</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>-5.1%</td>
<td>12.4%</td>
<td>-12.4%</td>
<td>-23.5%</td>
<td>0.2%</td>
<td>2.6%</td>
<td>6.4%</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>-2.3%</td>
<td>10.2%</td>
<td>-7.1%</td>
<td>-0.1%</td>
<td>5.2%</td>
<td>3.4%</td>
<td>2.9%</td>
</tr>
<tr>
<td class="firstcol">Services Balance</td>
<td>&#8364;&#8364; (953)</td>
<td>&#8364;&#8364; (43)</td>
<td>&#8364;&#8364; (497)</td>
<td>&#8364;&#8364; (498)</td>
<td>&#8364;&#8364; (378)</td>
<td>&#8364;&#8364; (528)</td>
<td>&#8364;&#8364; (450)</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>-6.4%</td>
<td>11.8%</td>
<td>-5.3%</td>
<td>-3.7%</td>
<td>-7.8%</td>
<td>-0.6%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>6.5%</td>
<td>4.3%</td>
<td>-7.6%</td>
<td>10.6%</td>
<td>5.8%</td>
<td>4.5%</td>
<td>7.7%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">Not Seasonally Adjusted All Yr/Yr</td>
</tr>
<tr class="even">
<td class="firstcol">Exports</td>
<td colspan="2">May-08</td>

<td colspan="2">May-07</td>

<td colspan="2">May-06</td>

<td>May-05</td>
</tr>
<tr>
<td class="firstcol">Food &amp; Beverages</td>
<td colspan="2">13.6%</td>

<td colspan="2">-1.0%</td>

<td colspan="2">10.3%</td>

<td>8.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td colspan="2">6.2%</td>

<td colspan="2">3.6%</td>

<td colspan="2">21.0%</td>

<td>4.4%</td>
</tr>
<tr>
<td class="firstcol">Transport</td>
<td colspan="2">8.9%</td>

<td colspan="2">-1.3%</td>
<td colspan="2">34.2%</td>

<td>-1.9%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td colspan="2">3.7%</td>

<td colspan="2">0.9%</td>

<td colspan="2">7.6%</td>

<td>8.3%</td>
</tr>
<tr>
<td class="firstcol">Other Goods</td>
<td colspan="2">3.7%</td>

<td colspan="2">17.0%</td>

<td colspan="2">5.1%</td>

<td>19.6%</td>
</tr>
<tr class="even">
<td class="firstcol">Imports</td>
<td colspan="2">May-08</td>

<td colspan="2">May-07</td>

<td colspan="2">May-06</td>

<td>May-05</td>
</tr>
<tr>
<td class="firstcol">Food &amp; Beverages</td>
<td colspan="2">11.2%</td>

<td colspan="2">-2.0%</td>

<td colspan="2">8.9%</td>

<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td colspan="2">-6.9%</td>

<td colspan="2">4.7%</td>

<td colspan="2">19.1%</td>

<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">Transport</td>
<td colspan="2">-11.8%</td>

<td colspan="2">7.3%</td>

<td colspan="2">25.7%</td>

<td>-0.7%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td colspan="2">3.4%</td>

<td colspan="2">-0.5%</td>

<td colspan="2">12.8%</td>

<td>5.5%</td>
</tr>
<tr>
<td class="firstcol">Other Goods</td>
<td colspan="2">17.6%</td>

<td colspan="2">-1.0%</td>

<td colspan="2">29.6%</td>

<td>27.7%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Balances in Mlns of euros</td>
</tr>
</tbody>
</table>
</body></html>

Italy’s goods trade deficit emerged in May after April posted a surplus. The current deficit widened. Imports are now faltering with capital goods and transport categories showing outright declines Yr/Yr as domestic weakness takes its [...]

Italy’s Trade Shows Deeper Deficit

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717e.jpg" width="353">
The 2Q &#39;08 Composite Business Index published by the Manufacturers&#39; Alliance/MAPI fell to 47 from a revised level of 58 in 1Q &#39;08. Prior years&#39; readings were revised and the latest was the lowest since 1Q &#39;02.
During the last ten years there has been a 69% correlation between the Composite Index Level and quarterly growth in US factory sector output.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717f.jpg" width="353">
The current orders index fell sharply to the lowest level since 2002. The 1Q export orders index, however, remained relatively strong and ticked up slightly from 1Q, near its averages of the last four years. During the last ten years there has been a 59% correlation between the export orders index and quarterly growth in real US exports.<blockquote></blockquote>
The profit margins index fell to its lowest level since 3Q &#39;03 though capital spending intentions for the coming year remained relatively firm, down just moderately from the averages of the last four years. During the last ten years there has been a 75% correlation between the capital spending index and q/q growth in business investment.
The survey of 60 senior financial executives representing a broad range of manufacturing industries reflects the views on current &amp; future business conditions. The business outlook index is a weighted sum of shipments, backlogs, inventories, and profit margin indexes.
For the latest US Business Outlook from the MAPI click <a href="http://www.mapi.net/am/Template.cfm?Section=Newsroom&amp;template=/CM/ContentDisplay.cfm&amp;ContentID=5511">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/surveys/@SE/@SE.HTM">Manufacturers&#39; Alliance/MAPI Survey</a></th>
<th scope="col">2Q &#39;08</th>
<th scope="col">1Q &#39;08</th>
<th scope="col">2Q &#39;07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Business Index</td>
<td>46</td>
<td>58</td>
<td>75</td>
<td>69</td>
<td>78</td>
<td>85</td>
</tr>
</tbody>
</table>


</html>

The 2Q '08 Composite Business Index published by the Manufacturers' Alliance/MAPI fell to 47 from a revised level of 58 in 1Q '08. Prior years' readings were revised and the latest was the lowest since 1Q '02. During the last ten [...]

MAPI Business Outlook Survey At A Six Year Low

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717a.jpg" width="353">
Initial claims for unemployment insurance rose a moderate 5.4% last week to 366,000 from a little revised level during the week prior. The increase fell short of Consensus expectations for a larger rise to 380,000 claims.
The latest figure is for the survey week for July nonfarm payrolls. Jobless claims were down 18,000 (4.7%) from the June survey period.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717b.jpg" width="353">
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment. Over the longer period of time, the level of claims for jobless insurance has not trended higher with the size of the labor force due to a higher proportion of self-employed workers who are not eligible for benefits.
As a result of the latest weekly decline in initial claims, the four-week moving average fell to 376,500 (+20.5% y/y). During June claims averaged 391,000.
Continuing claims for unemployment insurance during the latest week fell by 81,000 and reversed about all of the prior week&#39;s rise. The decline, nevertheless, left the four-week average of continuing claims still rising. It increased 16,500 to another cycle high of 3,142,750 which was roughly a quarter higher than a year ago and the highest level since early 2004.
Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.
The insured rate of unemployment fell back to 2.3%.

<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/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">07/12/08</th>
<th scope="col">07/05/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;366</td>
<td>346</td>
<td>18.4%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,122</td>
<td>21.9%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance rose a moderate 5.4% last week to 366,000 from a little revised level during the week prior. The increase fell short of Consensus expectations for a larger rise to 380,000 claims. The latest [...]

U.S. Initial Claims for Jobless Insurance Up Moderately

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717d.jpg" width="353">
Housing starts rebounded smartly last month. The 9.1% m/m rise to 1.066M units by far exceeded Consensus expectations for .960M starts. The rise was, however, due solely to the multi-family sector.
Multi-family starts surged 42.1% last month to the highest level since January of 2006. In part, the rise was making up for sharp declines during two of the prior three months. By region, the pop in multi-family units was all in the Northeast. Elsewhere, they fell. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717c.jpg" width="353">
Single-family starts continued to slide. They fell 5.3% to 647,000 from a May level which was revised up slightly. The latest level was the lowest since January 1991. For 2Q as a whole, single family starts fell 7.9% from 1Q after that quarter&#39;s 11.9% decline.
Single-family housing starts in the Northeast reversed all of a May increase with a 9.2% (-44.9% y/y) decline. Starts in the West also continued lower with a 5.8% drop to the lowest level since January. In the Midwest, starts held at the lows of the year and fell 5.3% (-45.7% y/y) after an 8.7% May gain. Finally, single-family starts in the South reversed the May increase and fell 4.4% (-36.9% y/y), but they were at a new low for this cycle and the lowest since 1991.
Building permits recovered 11.6% but, here again, the rise was due solely to a 39.4% rise in multi-family. Permits to build single-family units fell 3.5% to the lowest level since 1991.

<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/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</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">Total</td>
<td>1,066</td>
<td>977</td>
<td>-26.9%</td>
<td>1,344</td>
<td>1,812</td>
<td>2,073</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family</td>
<td>647</td>
<td>683</td>
<td>-43.0%</td>
<td>1,039</td>
<td>1,474</td>
<td>1,719</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-Family</td>
<td>419</td>
<td>294</td>
<td>30.1%</td>
<td>304</td>
<td>338</td>
<td>354</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>1,091</td>
<td>978</td>
<td>-23.9%</td>
<td>1,371</td>
<td>1,842</td>
<td>2,159</td>
</tr>
</tbody>
</table>
</body>
</html>

Housing starts rebounded smartly last month. The 9.1% m/m rise to 1.066M units by far exceeded Consensus expectations for .960M starts. The rise was, however, due solely to the multi-family sector. Multi-family starts surged 42.1% [...]

U.S. Housing Starts Rebound All Multi-Family

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717d.jpg" align="left" border="0" height="265" width="353">
Housing starts rebounded smartly last month. The 9.1% m/m rise
to 1.066M units by far exceeded Consensus expectations for .960M
starts. The rise was, however, due solely to the multi-family sector.
Multi-family starts surged 42.1% last month to the highest
level since January of 2006. In part, the rise was making up for sharp
declines during two of the prior three months. By region, the pop in
multi-family units was all in the Northeast. Elsewhere, they fell. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717c.jpg" align="right" border="0" height="265" width="353">
Single-family starts continued to slide. They fell 5.3% to
647,000 from a May level which was revised up slightly. The latest
level was the lowest since January 1991. For 2Q as a whole, single
family starts fell 7.9% from 1Q after that quarter's 11.9% decline.
Single-family housing starts in the Northeast reversed all of
a May increase with a 9.2% (-44.9% y/y) decline. Starts in the West
also continued lower with a 5.8% drop to the lowest level since
January. In the Midwest, starts held at the lows of the year and fell
5.3% (-45.7% y/y) after an 8.7% May gain. Finally, single-family starts
in the South reversed the May increase and fell 4.4% (-36.9% y/y), but
they were at a new low for this cycle and the lowest since 1991.
Building permits recovered 11.6% but, here again, the rise was
due solely to a 39.4% rise in multi-family. Permits to build
single-family units fell 3.5% to the lowest level since 1991.

<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/@E9/@E901/@E90101/@E90101.HTM">Housing
Starts (000s, AR)</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">Total</td>
<td>1,066</td>
<td>977</td>
<td>-26.9%</td>
<td>1,344</td>
<td>1,812</td>
<td>2,073</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family</td>
<td>647</td>
<td>683</td>
<td>-43.0%</td>
<td>1,039</td>
<td>1,474</td>
<td>1,719</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-Family</td>
<td>419</td>
<td>294</td>
<td>30.1%</td>
<td>304</td>
<td>338</td>
<td>354</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>1,091</td>
<td>978</td>
<td>-23.9%</td>
<td>1,371</td>
<td>1,842</td>
<td>2,159</td>
</tr>
</tbody>
</table>
U.S. Initial Claims for Jobless
Insurance Up Moderately 
by <a href="/comment/Moeller.html">Tom
Moeller</a> July 17, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717a.jpg" align="left" border="0" height="265" width="353">
Initial claims for unemployment insurance rose a moderate 5.4%
last week to 366,000 from a little revised level during the week prior.
The increase fell short of Consensus expectations for a larger rise to
380,000 claims.
The latest figure is for the survey week for July nonfarm
payrolls. Jobless claims were down 18,000 (4.7%) from the June survey
period.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717b.jpg" align="right" border="0" height="265" width="353">
A claims level below 400,000 typically has been associated
with growth in nonfarm payrolls. During the last ten years there has
been a (negative) 76% correlation between the level of initial claims
and the m/m change in nonfarm payroll employment. Over the longer
period of time, the level of claims for jobless insurance has not
trended higher with the size of the labor force due to a higher
proportion of self-employed workers who are not eligible for benefits.
As a result of the latest weekly decline in initial claims,
the four-week moving average fell to 376,500 (+20.5% y/y). During June
claims averaged 391,000.
Continuing claims for unemployment insurance during the latest
week fell by 81,000 and reversed about all of the prior week's rise.
The decline, nevertheless, left the four-week average of continuing
claims still rising. It increased 16,500 to another cycle high of
3,142,750 which was roughly a quarter higher than a year ago and the
highest level since early 2004.
Continuing claims provide some indication of workers' ability
to find employment and they lag the initial claims figures by one week.
The insured rate of unemployment fell back to 2.3%.

<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/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">07/12/08</th>
<th scope="col">07/05/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;366</td>
<td>346</td>
<td>18.4%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,122</td>
<td>21.9%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
MAPI Business Outlook Survey At A
Six Year Low 
by <a href="/comment/Moeller.html">Tom
Moeller</a> July 17, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717e.jpg" align="left" border="0" height="265" width="353">
The 2Q '08 Composite Business Index published by the
Manufacturers' Alliance/MAPI fell to 47 from a revised level of 58 in
1Q '08. Prior years' readings were revised and the latest was the
lowest since 1Q '02.
During the last ten years there has been a 69% correlation
between the Composite Index Level and quarterly growth in US factory
sector output.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717f.jpg" align="right" border="0" height="265" width="353">
The current orders index fell sharply to the lowest level
since 2002. The 1Q export orders index, however, remained relatively
strong and ticked up slightly from 1Q, near its averages of the last
four years. During the last ten years there has been a 59% correlation
between the export orders index and quarterly growth in real US exports.
<blockquote>
<blockquote>

The profit margins index fell to its lowest level since 3Q
'03 though capital spending intentions for the coming year remained
relatively firm, down just moderately from the averages of the last
four years. During the last ten years there has been a 75% correlation
between the capital spending index and q/q growth in business
investment.
</blockquote>
</blockquote>

The survey of 60 senior financial executives representing a
broad range of manufacturing industries reflects the views on current
&amp; future business conditions. The business outlook index is a
weighted sum of shipments, backlogs, inventories, and profit margin
indexes.
For the latest US Business Outlook from
the MAPI click <a href="http://www.mapi.net/am/Template.cfm?Section=Newsroom&amp;template=/CM/ContentDisplay.cfm&amp;ContentID=5511">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/surveys/@SE/@SE.HTM">Manufacturers'
Alliance/MAPI Survey</a></th>
<th scope="col">2Q '08</th>
<th scope="col">1Q '08</th>
<th scope="col">2Q '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Business Index</td>
<td>46</td>
<td>58</td>
<td>75</td>
<td>69</td>
<td>78</td>
<td>85</td>
</tr>
</tbody>
</table>
Italy&#8217;s Trade Shows Deeper Deficit by <a href="/comment/Brusca.html">Robert
Brusca</a> July 17, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080717g.jpg" align="left" border="0" height="265" width="353">
Italy&#8217;s goods trade deficit emerged in May after April posted
a surplus. The current deficit widened. Imports are now faltering with
capital goods and transport categories showing outright declines Yr/Yr
as domestic weakness takes its toll. But weak exports will shrink the
trade deficit and it is instead expanding. That is because exports for
now are falling faster than imports. Total exports fell at a 23% annual
rate over three months and are up by just 2.6% yr/yr. Europe is slowing
down and now Italy is facing such weak demand for its goods due to a
strong euro and weakening growth abroad that its domestic weakness is
being overwhelmed by weakness from these other sources. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Italy's
Trade Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">m/mo % monthly rate</td>
<td colspan="4">Period Specified saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</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>
</tr>
<tr>
<td class="firstcol">Current Account Bal</td>
<td>&#8364;&#8364; (6,325)</td>
<td>&#8364;&#8364; (2,816)</td>
<td>&#8364;&#8364; (5,203)</td>
<td>&#8364;&#8364; (4,781)</td>
<td>&#8364;&#8364; (4,209)</td>
<td>&#8364;&#8364; (3,548)</td>
<td>&#8364;&#8364; (3,290)</td>
</tr>
<tr>
<td class="firstcol">Goods Balance</td>
<td>&#8364;&#8364; (237)</td>
<td>&#8364;&#8364; 692</td>
<td>&#8364;&#8364; 46</td>
<td>&#8364;&#8364; 167</td>
<td>&#8364;&#8364; 251</td>
<td>&#8364;&#8364; 355</td>
<td>&#8364;&#8364; (339)</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>-5.1%</td>
<td>12.4%</td>
<td>-12.4%</td>
<td>-23.5%</td>
<td>0.2%</td>
<td>2.6%</td>
<td>6.4%</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>-2.3%</td>
<td>10.2%</td>
<td>-7.1%</td>
<td>-0.1%</td>
<td>5.2%</td>
<td>3.4%</td>
<td>2.9%</td>
</tr>
<tr>
<td class="firstcol">Services Balance</td>
<td>&#8364;&#8364; (953)</td>
<td>&#8364;&#8364; (43)</td>
<td>&#8364;&#8364; (497)</td>
<td>&#8364;&#8364; (498)</td>
<td>&#8364;&#8364; (378)</td>
<td>&#8364;&#8364; (528)</td>
<td>&#8364;&#8364; (450)</td>
</tr>
<tr>
<td class="firstcol">Exports</td>
<td>-6.4%</td>
<td>11.8%</td>
<td>-5.3%</td>
<td>-3.7%</td>
<td>-7.8%</td>
<td>-0.6%</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>6.5%</td>
<td>4.3%</td>
<td>-7.6%</td>
<td>10.6%</td>
<td>5.8%</td>
<td>4.5%</td>
<td>7.7%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">Not
Seasonally Adjusted All Yr/Yr</td>
</tr>
<tr class="even">
<td class="firstcol">Exports</td>
<td colspan="2">May-08</td>
<td colspan="2">May-07</td>
<td colspan="2">May-06</td>
<td>May-05</td>
</tr>
<tr>
<td class="firstcol">Food &amp; Beverages</td>
<td colspan="2">13.6%</td>
<td colspan="2">-1.0%</td>
<td colspan="2">10.3%</td>
<td>8.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td colspan="2">6.2%</td>
<td colspan="2">3.6%</td>
<td colspan="2">21.0%</td>
<td>4.4%</td>
</tr>
<tr>
<td class="firstcol">Transport</td>
<td colspan="2">8.9%</td>
<td colspan="2">-1.3%</td>
<td colspan="2">34.2%</td>
<td>-1.9%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td colspan="2">3.7%</td>
<td colspan="2">0.9%</td>
<td colspan="2">7.6%</td>
<td>8.3%</td>
</tr>
<tr>
<td class="firstcol">Other Goods</td>
<td colspan="2">3.7%</td>
<td colspan="2">17.0%</td>
<td colspan="2">5.1%</td>
<td>19.6%</td>
</tr>
<tr class="even">
<td class="firstcol">Imports</td>
<td colspan="2">May-08</td>
<td colspan="2">May-07</td>
<td colspan="2">May-06</td>
<td>May-05</td>
</tr>
<tr>
<td class="firstcol">Food &amp; Beverages</td>
<td colspan="2">11.2%</td>
<td colspan="2">-2.0%</td>
<td colspan="2">8.9%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td colspan="2">-6.9%</td>
<td colspan="2">4.7%</td>
<td colspan="2">19.1%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">Transport</td>
<td colspan="2">-11.8%</td>
<td colspan="2">7.3%</td>
<td colspan="2">25.7%</td>
<td>-0.7%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td colspan="2">3.4%</td>
<td colspan="2">-0.5%</td>
<td colspan="2">12.8%</td>
<td>5.5%</td>
</tr>
<tr>
<td class="firstcol">Other Goods</td>
<td colspan="2">17.6%</td>
<td colspan="2">-1.0%</td>
<td colspan="2">29.6%</td>
<td>27.7%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Balances in
Mlns of euros</td>
</tr>
</tbody>
</table>
</body></html>

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

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

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Consumer credit outstanding increased $13.1 billion (2.3% y/y) in September after rising $3.1 billion in August, revised from $0.4 billion, and $17.7 billion in July, revised from $18.1 billion. A $10.0 billion rise had been expected in the Action Economics Forecast Survey.

Nonrevolving credit outstanding rose $11.4 billion (2.1% y/y) in September after increasing $9.2 billion in August, revised from $6.3 billion, and increasing $6.7 billion in July, revised from $6.9 billion. Nonrevolving credit held by depository institutions declined 6.8% y/y in September after falling 7.4% y/y in August. Finance company debt holdings fell 1.5% y/y after declining 1.3%, while credit union holdings rose an increased 12.8% y/y in September, the quickest growth since in two years. Nonrevolving debt of the federal government rose 3.6% y/y in September, the same as in August.

In September, revolving credit outstanding, which includes credit cards, rose $1.7 billion (2.6% y/y) after falling $6.1 billion in August, revised from a $6.0 billion decline, and rising $11.0 billion in July, revised from $11.2 billion. Revolving credit outstanding held by depository institutions fell 3.0% y/y. Revolving credit held by finance companies fell a steady 14.7% y/y in September, while credit union debt rose 4.5% y/y in September, up from 3.7% y/y in August.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

**AI and the Economy** is the title of today’s speech by Federal Reserve Vice Chair Philip N. Jefferson and it can be found [here](https://www.federalreserve.gov/newsevents/speech/jefferson20251107a.htm).

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- Notable gain in credit usage follows prior month’s slowdown.
- Nonrevolving credit usage strengthens and revolving turns positive.

U.S. Consumer Credit Strengthens in September

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.1% during the four weeks ended November 7, 2025 after improving 0.3% in the prior four-week period. The index increased 0.5% y/y following a 0.8% y/y gain at the end of October.

Prices in the **Textile** group increased 2.5% during the last four weeks and rose 3.3% y/y. The cost of burlap increased 23.8% in the last four weeks while surging 48.1% over the last year. Showing modest improvement, cotton prices rose 0.9% in four weeks but declined 5.6% y/y.

**Metals** group prices increased 1.5% (5.9% y/y) in the last four weeks as the cost of aluminum rose 4.9	% (10.3% y/y). Zinc prices moved up 3.6% (5.4% y/y) and the cost of steel scrap rose 1.4% (-5.9% y/y). Lead prices increased 1.1% (-0.2% y/y) in four weeks and the cost of copper scrap rose 0.6% (13.9% y/y). Working lower, tin prices declined 2.2% (+13.8% y/y) in four weeks.

**Miscellaneous** group prices weakened 2.9% in the last four weeks and were off 1.0% y/y, as framing lumber prices fell 11.3% (-4.3% y/y). The cost of tallow, used for frying & baking, declined 9.0% (+10.5% y/y) in four weeks. Offsetting this weakness, natural rubber prices rose 2.0% in four weeks, but were off 6.6% y/y.

Prices in the **crude oil & benzene** group declined 1.6% (-10.8% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 2.2% in four weeks to $60.31 per barrel and declined 15.6% y/y. The price was increased from a low of $58.47 in the third week of last month. The price of the petro-chemical benzene fell 3.8% (-23.2% y/y) in four weeks.

**Excluding crude oil**, the industrial commodity price index was unchanged (+1.5% y/y) over the last four weeks after rising 0.5% during the prior four weeks.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

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- Textile and metals prices strengthen.
- Framing lumber costs plummet.
- Crude oil prices weaken.

FIBER: Industrial Commodity Price Index Moves Sideways in Latest Four Weeks

251107E.jpg

The chart provides a good overview for German trade trend. The table breaks trade trends down by categories and provides growth rates on shorter horizons of 3 months, 6 months and 12 months. But the chart depicts the overarching trends well. It shows the German surplus being diminished on a gradual path and not altogether in a clear monotonic fashion. Export and import lines on the chart move mostly sideways (horizontal). The export line is below the import line since late last year. These two series plots on the right-hand scale and they depict growth rates (year-over-year). So sideways movements mean roughly steady growth. Exports have been growth steadily year-over-year at a weak pace that on occasion has been a decline in terms of their year-on-year value. Generally, the green line is in positive territory. The red import line has been stronger, indicating somewhat better, steadier import growth over the period.

While exports had a good September, export growth sequenced from 12-months to 6-months, to 3-months has been weakening. Imports also put in a strong September but are showing some erosion from 12-month to 6-months to 3-months in terms of annualized rates of growth. Still, import growth rates remain quite strong and consistent; the sense of erosion is clear but also moderate – it’s a moderate erosion in progress for imports.

Capital goods exports from Germany are improving- this observation is based on lagged data with a one-month lag built in. But consumer goods and vehicle exports are slowing and rather sharply- likely as a result of U.S. tariffs.

Import side trends, with the same lag, are not as clear cut. Capital goods imports are growing, and motor vehicle imports are improving and accelerating. Consumer goods imports have erratically slowed.

Real exports and imports on sequential lagged data show exports contracting on most horizons while imports generate consistent positive growth in real terms. There is a big difference in these two trends expressed in real terms.

On balance, German trade trends are shifting. The trade balance is gradually eroding. Change is in play.

251107.jpg

Germany

German Trade Surplus Shrinks Despite Strong Exports

Andrew Cates

**The global growth cycle**
The new orders-to-inventory spread in the global manufacturing PMI is often been viewed as one of the most reliable forward-looking indicators of the global economic cycle. When new orders are rising relative to inventories, it typically signals that demand is firming, production pipelines are beginning to refill, and industrial momentum is building. Conversely, when inventories accumulate faster than orders, it often foreshadows a slowdown. As the chart shows, this spread has been holding up relatively well in recent months, suggesting that despite ongoing headwinds—US tariff policies, uneven global demand, and geopolitical uncertainty—the underlying pulse of global manufacturing remains resilient.

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**US credit standards**
The latest Senior Loan Officer Opinion Survey (SLOOS) from the Federal Reserve suggests that credit conditions remain tight but are no longer worsening, marking a tentative stabilization after several quarters of tightening. Banks reported modest easing in standards for some categories of corporate and commercial real estate loans, though mortgage lending remains constrained. Demand for business credit continues to soften, reflecting both higher borrowing costs and a cautious corporate outlook. Historically, periods of widespread tightening—like those seen in 2008 and 2020—have coincided with sharp rises in the private sector savings balance (a proxy for deleveraging), as firms and households retrench simultaneously. The current configuration, shown in the chart, indicates lingering deleveraging pressures, but not a collapse in credit availability.

251106Z2.jpg

**China**
Moving to China, the latest official and Caixin PMI releases for October painted a mixed picture of activity. Both manufacturing indices softened, suggesting that the industrial rebound which underpinned much of China’s recent growth may be losing some traction. The official non-manufacturing PMI, by contrast, edged higher, hinting at continued resilience in construction and public-sector-linked services, while the Caixin services measure—which tends to reflect smaller, private-sector firms—slipped modestly. The divergence underscores China’s two-speed recovery: industrial production and exports have carried the economy, while household spending and smaller enterprises remain subdued. If manufacturing momentum fades in the coming months, the economy could face a renewed loss of balance, with fewer reliable growth engines. Still, overall performance this year has surpassed expectations, and the government’s 5% growth target remains within reach, provided activity holds steady through year-end. Looking ahead, marginal policy support and improved external sentiment—helped by selective tariff relief from the US—could offer limited, though welcome, cushioning.

251106Z3.jpg

**Australia** 
In Australia, the RBA left the cash rate unchanged at its November meeting, maintaining a cautious stance amid a still-complex inflation and growth backdrop. The case for further easing has become less compelling as core inflation (trimmed mean CPI) remains above target and labour market conditions—while gradually softening—continue to show resilience. The unemployment rate has edged higher but remains low by historical standards, consistent with lingering wage and services price pressures. Recent data also hint at a tentative pickup in activity, supported by strong population growth and stabilising commodity exports. Against that backdrop, the RBA has stressed that the path for policy remains finely balanced, with a strong focus on incoming inflation data and global financial conditions. While downside risks persist—particularly from China’s slowdown and weak global trade—the persistence of domestic price pressures means the bar for renewed rate cuts remains relatively high.

251106Z4.jpg

**Argentina**
Turning to Argentina, markets continue to digest the implications of President Milei’s midterm election victory amid deepening economic and financial imbalances. The peso’s broad nominal effective exchange rate has remained under heavy pressure, extending its long-running slide as investors weigh the challenges of implementing fiscal consolidation and monetary reform in a fragile political and social environment. In stark contrast, the Buenos Aires stock index has surged to record highs, reflecting optimism that Milei’s reformist agenda—anchored in deregulation, privatisation, and fiscal restraint—may eventually stabilise the economy and attract renewed capital inflows. The divergence between a falling currency and soaring equity prices highlights the tension between near-term macro risks and longer-term reform hopes. Going forward, investor confidence will hinge on the government’s ability to deliver credible policy execution while managing the inflationary fallout from ongoing peso weakness.

251106Z5.jpg

**Global CO2 emissions**
Shifting focus to more structural issues, the chart underscores how decarbonisation challenges remain deeply concentrated in a few heavy-emitting sectors. Energy production alone accounts for nearly 40% of global CO₂ emissions, with manufacturing, households, and transport together contributing another 50%. This composition highlights the complex trade-offs of the energy transition: the very sectors that underpin modern living standards—power generation, industrial output, mobility, and housing—are also those most difficult to decarbonise. Climate change is therefore not just an environmental issue but a structural economic one, shaping investment, infrastructure, and pricing systems for decades to come. The tension between sustaining growth and cutting emissions will remain a defining challenge for policymakers, particularly as clean technologies face constraints in scaling fast enough to offset rising global demand for energy-intensive goods and services.

251106Z6.jpg

Recent financial market developments have been shaped by a renewed bout of volatility, with heightened concerns about stretched AI valuations triggering a big correction across parts of the tech sector. This comes against a backdrop of lingering uncertainty in Washington, where the US government shutdown has continued to delay the release of several key economic reports, clouding visibility on near-term momentum. Still, the broader macro signals offer a mixed but nuanced picture. Global manufacturing PMIs have continued to hold up, hinting that underlying industrial momentum remains resilient (chart 1). The latest US Senior Loan Officer Survey points to a stabilisation in credit conditions—banks remain cautious, but the most intense phase of tightening may have now passed (chart 2). In China, the October PMIs reflected renewed softness in manufacturing alongside a still-steady services sector, tentatively suggesting that growth may be rebalancing, albeit at a weaker aggregate pace of growth (chart 3). Australia’s inflation and labour market data, meanwhile, have complicated the case for near-term policy easing, with the RBA opting to stay on hold this week as core inflation remain sticky. In Argentina, currency weakness persists even as equity markets rally, highlighting the policy and market tension surrounding President Milei’s reform agenda (chart 5). And finally, at a more structural level, latest global emissions data serve as a reminder that energy, manufacturing, transport, and households remain the principal sources of CO₂—illustrating how the climate and energy transition will continue to shape the macro landscape well beyond the current economic cycle (chart 6).

Charts of the Week: Uneven But Unbroken

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Initial claims for unemployment insurance fell 12,643 during the week ended October 25 to 219,520 (+0.6% y/y) and mostly reversed the prior week’s increase to 232,163. The four-week moving average of initial claims eased to 226,766 from 227,953. They have trended higher this year, after weakening late in 2024. The four-week average hit a low of 200,323 in January 2024.

Federal government employees initially filed 9,435 jobless insurance claims last week after 10,062 in the prior week. These figures are increased from 588 at the end of September.

Continuing claims for unemployment insurance rose to 1.957 million (5.5% y/y) in the week ended October 18 from 1.947 million in the prior week. The four-week moving average rose to 1.940 million from 1.931 million. It was the highest level since the last week of August.	

Federal government employees continuing benefits rose to 23,188 in the week ended October 18 from 14,472 in the prior week. These figures are increased from 8,680 at the end of September.

The insured unemployment rate varied greatly across individual states and territories. In the week ended October 18, the highest unemployment rates were in New Jersey (2.14%), Washington (2.03%), California (1.93%), Massachusetts (1.84%), the District of Columbia (1.86%) and Connecticut (1.70%). The lowest were in South Dakota (0.25%), Florida (0.36%), North Carolina & Louisiana (0.41%), Nebraska (0.44%) and Virginia (0.49%). Rates in other notable states include New York (1.51%), Illinois (1.50%), Pennsylvania (1.39%), and Texas (1.11%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.

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- Decline in initial claims reverses earlier gain.
- Continuing claims move higher.
- State unemployment rates vary.

Economy in Brief: 2008

Jump to:

U.S. NAHB Housing Market Index Fell To A Record Low

Philadelphia Fed Index Stable & Low, Prices Surged

Philadelphia Fed Index Stable & Low, Prices Surged

Italy’s Trade Shows Deeper Deficit

MAPI Business Outlook Survey At A Six Year Low

U.S. Initial Claims for Jobless Insurance Up Moderately

U.S. Housing Starts Rebound All Multi-Family

U.S. Housing Starts Rebound All Multi-Family