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/080220d.jpg" width="353">
Housing starts last month did rise slightly as expected to 1.012M units, up 0.8% from December. But the gain did little to dent m/m declines of 14.8% in December and 7.5% during November. As a result housing starts remained near the lows of 1991.
Last month, all of the increase in the total was due to a 22.3% gain in starts of condos &amp; coops.
Single family starts in January fell 5.2% after like declines during each of the prior six months. The decline to .743M was to the lowest level since January 1991. Since the peak in early 2006, starts of single family homes are down 59.6%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220c.jpg" width="353">
By region, single family starts in the Northeast rose by nearly one half m/m to the highest level since last June. That rise was countered by a 20.3% (-49.1% y/y) decline in the West. Single family starts in the Midwest were stable m/m (-31.1% y/y) and in the South, single family starts fell 9.8% (-32.3% y/y).
Building permits fell 3.0% (-35.1% y/y). Single-family permits fell 4.1% (-40.3% y/y).
Liquidity, Monetary Policy, and Financial Cycles from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/current_issues/ci14-1.html"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</a></th>
<th scope="col">January</th>
<th scope="col">December</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>1,012</td>
<td>1,004</td>
<td>-27.9%</td>
<td>1,344</td>
<td>1,812</td>
<td>2,073</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family</td>
<td>743</td>
<td>784</td>
<td>-33.8%</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>269</td>
<td>220</td>
<td>-3.9%</td>
<td>304</td>
<td>338</td>
<td>354</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>1,048</td>
<td>1,080</td>
<td>-33.1%</td>
<td>1,371</td>
<td>1,842</td>
<td>2,159</td>
</tr>
</tbody>
</table>
</body>
</html>

Housing starts last month did rise slightly as expected to 1.012M units, up 0.8% from December. But the gain did little to dent m/m declines of 14.8% in December and 7.5% during November. As a result housing starts remained near the [...]

U.S. Housing Starts Remain Near 1991 Lows

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220a.jpg" width="353">
The consumer price index (CPI-U) rose 0.4% last month, the same as during an upwardly revised December increase. (New seasonal factors were introduced for the last three years.) The latest increase was slightly ahead of expectations for a 0.3% rise. It also lifted the y/y comparison to its fastest since October 2005.
Less food &amp; energy, consumer prices rose 0.3% in January. That also was ahead of expectations for a 0.2% gain and it was the quickest since June of 2006. A Comparison of Measures of Core Inflation from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/epr/07v13n3/0712rich.pdf">here</a>.
A faster 0.7% gain in food &amp; beverage prices was the strongest since early last year. Prices for meats poultry &amp; fish surged 0.8% (5.4% y/y) and prices for fruits &amp; vegetables jumped 2.2% (6.2% y/y). Cereal &amp; bakery product prices also have been quite strong and posted a 0.6% gain (5.7% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220b.jpg" width="353">
Core services prices rose 0.4% (3.4% y/y) and that was the fastest m/m rise since 2006. Shelter prices rose the same 0.3% (3.1% y/y) as during the prior two months. Owners equivalent rent of primary residence, a measure not equivalent to other house price measures, also rose 0.3% (2.8% y/y). Medical care services prices, however, were strong. The 0.6% increase doubled the December (5.7% y/y) rise. Tuition costs also posted a strong 0.6% (5.7% y/y) rise but the increase in public transportation prices cooled to 0.4% (5.8% y/y).
Core goods prices rose 0.2% and that was the fastest increase since early 2006. It mainly reflected a 0.4% rise in apparel prices that still left them down 0.2% y/y. Medical care commodity prices also were strong and rose 0.5% (2.5% y/y) but most other goods price increases were tame. Prices for new &amp; used motor vehicles fell 0.1% (0.0% y/y) during January and prices of household furnishings &amp; operation ticked up 0.1% (-0.5% y/y) after two months of having been unchanged.
Energy prices rose just 0.7% last month, well off the double digit rates of increase during the prior four months. The gain in gasoline prices eased to only 1.2% (34.5% y/y) and the weekly data already show a slight m/m decline this month. Prices for fuel oil &amp; other fuels, however, were quite strong and rose 3.7% (34.7% y/y) but natural gas &amp; electricity prices fell 0.5% (+3.% y/y). 
The chained CPI, which adjusts for shifts in the mix of consumer purchases rose 0.5% (+3.9% y/y) and the core measure rose 0.3%, its fastest gain since October. This latter measure is similar to the core PCE price index but its treatment of housing price differs
Publishing Central Bank Interest Rate Forecasts from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2008/el2008-02.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> </th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Jan Y/Y&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.9%</td>
<td>4.4%&nbsp;</td>
<td>2.9%</td>
<td>3.2%</td>
<td>3.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.3%</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.5%&nbsp;</td>
<td>2.3%</td>
<td>2.5%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.2%&nbsp;</td>
<td>-0.4%</td>
<td>0.2%</td>
<td>0.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Services less Energy</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>3.4%&nbsp;</td>
<td>3.4%</td>
<td>3.4%</td>
<td>2.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>0.7%</td>
<td>1.7%</td>
<td>6.9%</td>
<td>20.4%&nbsp;</td>
<td>5.6%</td>
<td>11.0%</td>
<td>17.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp; Beverages</td>
<td>0.7%</td>
<td>0.1%</td>
<td>0.4%</td>
<td>4.9%&nbsp;</td>
<td>4.0%</td>
<td>2.3%</td>
<td>2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;&nbsp;</td>
<td></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.5%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>3.9%</td>
<td>2.5%</td>
<td>2.9%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy&nbsp;</td>
<td>0.3%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>2.2%</td>
<td>2.0%</td>
<td>2.2%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>


</html>

The consumer price index (CPI-U) rose 0.4% last month, the same as during an upwardly revised December increase. (New seasonal factors were introduced for the last three years.) The latest increase was slightly ahead of expectations [...]

U.S. CPI Total Stable, Core Strongest Since 2006

<!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/080220a.jpg" align="left" border="0" height="265" width="353">
The consumer price index (CPI-U) rose 0.4%
last month, the same as during an upwardly revised December increase.
(New seasonal factors were introduced for the last three years.) The
latest increase was slightly ahead of expectations for a 0.3% rise. It
also lifted the y/y comparison to its fastest since October 2005.
Less food &amp; energy, consumer prices
rose 0.3% in January. That also was ahead of expectations for a 0.2%
gain and it was the quickest since June of 2006. A Comparison
of Measures of Core Inflation from the Federal Reserve Bank
of New York can be found <a href="http://www.newyorkfed.org/research/epr/07v13n3/0712rich.pdf">here</a>.
A faster 0.7% gain in food &amp; beverage prices
was the strongest since early last year. Prices for meats poultry
&amp; fish surged 0.8% (5.4% y/y) and prices for fruits &amp;
vegetables jumped 2.2% (6.2% y/y). Cereal &amp; bakery product
prices also have been quite strong and posted a 0.6% gain (5.7% y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220b.jpg" align="right" border="0" height="265" width="353">
Core services prices rose 0.4% (3.4% y/y)
and that was the fastest m/m rise since 2006. Shelter prices rose the
same 0.3% (3.1% y/y) as during the prior two months. Owners equivalent
rent of primary residence, a measure not equivalent to other house
price measures, also rose 0.3% (2.8% y/y). Medical care services
prices, however, were strong. The 0.6% increase doubled the December
(5.7% y/y) rise. Tuition costs also posted a strong 0.6% (5.7% y/y)
rise but the increase in public transportation prices cooled to 0.4%
(5.8% y/y).
Core goods prices rose 0.2% and that was
the fastest increase since early 2006. It mainly reflected a 0.4% rise
in apparel prices that still left them down 0.2% y/y. Medical care
commodity prices also were strong and rose 0.5% (2.5% y/y) but most
other goods price increases were tame. Prices for new &amp; used
motor vehicles fell 0.1% (0.0% y/y) during January and prices of
household furnishings &amp; operation ticked up 0.1% (-0.5% y/y)
after two months of having been unchanged.
Energy prices rose just 0.7% last month,
well off the double digit rates of increase during the prior four
months. The gain in gasoline prices eased to only 1.2% (34.5% y/y) and
the weekly data already show a slight m/m decline this month. Prices
for fuel oil &amp; other fuels, however, were quite strong and rose
3.7% (34.7% y/y) but natural gas &amp; electricity prices fell 0.5%
(+3.% y/y). 
The chained CPI, which adjusts for shifts
in the mix of consumer purchases rose 0.5% (+3.9% y/y) and the core
measure rose 0.3%, its fastest gain since October. This latter measure
is similar to the core PCE price index but its treatment of housing
price differs


Publishing Central Bank Interest Rate Forecasts
from the Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2008/el2008-02.pdf">
here</a>.


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer
Price Index</a> </th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Jan Y/Y&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.4%</td>
<td>0.4%</td>
<td>0.9%</td>
<td>4.4%&nbsp;</td>
<td>2.9%</td>
<td>3.2%</td>
<td>3.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.3%</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.5%&nbsp;</td>
<td>2.3%</td>
<td>2.5%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>0.2%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.2%&nbsp;</td>
<td>-0.4%</td>
<td>0.2%</td>
<td>0.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>0.4%</td>
<td>0.3%</td>
<td>0.3%</td>
<td>3.4%&nbsp;</td>
<td>3.4%</td>
<td>3.4%</td>
<td>2.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>0.7%</td>
<td>1.7%</td>
<td>6.9%</td>
<td>20.4%&nbsp;</td>
<td>5.6%</td>
<td>11.0%</td>
<td>17.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.7%</td>
<td>0.1%</td>
<td>0.4%</td>
<td>4.9%&nbsp;</td>
<td>4.0%</td>
<td>2.3%</td>
<td>2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td>&nbsp;&nbsp;</td>
<td></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained
CPI: Total (NSA)</a>&nbsp;</td>
<td>0.5%</td>
<td>-0.1%</td>
<td>0.5%</td>
<td>3.9%</td>
<td>2.5%</td>
<td>2.9%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>0.3%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>2.2%</td>
<td>2.0%</td>
<td>2.2%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
U.S. Housing Starts Remain Near
1991 Lows 
by <a href="/comment/Moeller.html">Tom
Moeller</a> February 20, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220d.jpg" align="left" border="0" height="265" width="353">
Housing starts last month did rise slightly as expected to
1.012M units, up 0.8% from December. But the gain did little to dent
m/m declines of 14.8% in December and 7.5% during November. As a result
housing starts remained near the lows of 1991.
Last month, all of the increase in the total was due to a
22.3% gain in starts of condos &amp; coops.
Single family starts in January fell 5.2% after like declines
during each of the prior six months. The decline to .743M was to the
lowest level since January 1991. Since the peak in early
2006, starts of single family homes are down 59.6%.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220c.jpg" align="right" border="0" height="265" width="353">
By region, single family starts in the Northeast rose by
nearly one half m/m to the highest level since last June. That rise was
countered by a 20.3% (-49.1% y/y) decline in the West. Single family
starts in the Midwest were stable m/m (-31.1% y/y) and in the South,
single family starts fell 9.8% (-32.3% y/y).
Building permits fell 3.0% (-35.1% y/y). Single-family permits
fell 4.1% (-40.3% y/y).
Liquidity, Monetary Policy, and Financial Cycles
from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/current_issues/ci14-1.html">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E9/@E901/@E90101/@E90101.HTM">Housing
Starts (000s, AR)</a></th>
<th scope="col">January</th>
<th scope="col">December</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>1,012</td>
<td>1,004</td>
<td>-27.9%</td>
<td>1,344</td>
<td>1,812</td>
<td>2,073</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family</td>
<td>743</td>
<td>784</td>
<td>-33.8%</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>269</td>
<td>220</td>
<td>-3.9%</td>
<td>304</td>
<td>338</td>
<td>354</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>1,048</td>
<td>1,080</td>
<td>-33.1%</td>
<td>1,371</td>
<td>1,842</td>
<td>2,159</td>
</tr>
</tbody>
</table>
New Industrial Orders in
DecemberSag in Italy and in France 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 20, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220e.jpg" align="left" border="0" height="265" width="353">
French and Italian orders have shown some consistency in
recent years in their oscillations. Currently Italy&#8217;s trends are a bit
flatter and the French trends are still a bit stronger but both saw
clear evidence of losing momentum as 2008 approaches.

Over the last three months Italy&#8217;s orders are off at a 13.1%
pace; French orders are off at a 0.3% pace for the same period. Italy&#8217;s
foreign orders are off over 12, 6 and 3 months and are showing
progressively worse results. French foreign orders are up weakly over
12 months and are lower over 6 months but have made a minor rebound in
the recent three months. So while French foreign order trends are
better than Italian trends they are still not solid&#8230;For the fourth
quarter, French orders are dropping at a 3.8% pace Q/Q while Italy&#8217;s
orders are dropping at a 3.3% annual pace. France&#8217;s foreign orders are
holding up better with a mere 4% drop annualized in Q4 compared to
Italy where the annual rate of decline for foreign orders is 15%.

The Euro Area is now showing some signs of growth erosion and
we cannot tell if it is the strong euro at work or the effects of
financial distress and lowered expectations that are having the largest
impact. But France and Italy are showing signs of wear on tear in their
respective industrial sectors.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"> Italy
Orders</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-5.4%</td>
<td>2.9%</td>
<td>-1.1%</td>
<td>-14.1%</td>
<td>-8.8%</td>
<td>1.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign</td>
<td>-8.1%</td>
<td>3.9%</td>
<td>-5.8%</td>
<td>-34.6%</td>
<td>-23.1%</td>
<td>-0.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Domestic</td>
<td>-4.1%</td>
<td>2.5%</td>
<td>1.5%</td>
<td>-0.7%</td>
<td>0.2%</td>
<td>2.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Sales</td>
<td>-2.7%</td>
<td>0.2%</td>
<td>-0.7%</td>
<td>-12.0%</td>
<td>-4.0%</td>
<td>-2.8%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">French
Orders</td>
</tr>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-2.0%</td>
<td>-0.3%</td>
<td>2.2%</td>
<td>-0.3%</td>
<td>-7.0%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign</td>
<td>-1.0%</td>
<td>1.1%</td>
<td>0.5%</td>
<td>2.5%</td>
<td>-9.3%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
German PPI Inflation Shows
Stubbornness 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 20, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220f.jpg" align="left" border="0" height="265" width="353">
The German inflation picture remains a bit hotter than the ECB
would have liked. With headline PPI inflation up by 0.7% the core was
up by 0.4%. Over the past 12 months, headline MFG inflation is at 3.2%
the same as it was a year ago. Excluding energy MFG inflation fell to
2.4% Yr/Yr from 3% a year ago.

Sequential growth rates show that ex energy inflation is very
sticky above 2%. Meanwhile, headline inflation has continued to build
pressures in terms of these sequential rates.

Basic goods prices rose by 0.7% in January and by 2.6% Yr/Yr.
Capital goods prices rose by 0.1% and are higher Yr/Yr by 0.7%.
Consumer goods prices rose by 0.5% in January but were up a strong 3.9%
Yr/Yr. Energy prices were by 2.1% in January and by 5.9% Yr/Yr.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> Germany
PPI</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%m/m</td>
<td colspan="4">%-SAAR</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>Jan-08</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-mo Year Ago</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.7%</td>
<td>0.0%</td>
<td>0.9%</td>
<td>6.9%</td>
<td>4.6%</td>
<td>3.2%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Ex Energy</td>
<td>0.4%</td>
<td>0.1%</td>
<td>0.1%</td>
<td>2.2%</td>
<td>2.2%</td>
<td>2.4%</td>
<td>3.0%</td>
</tr>
</tbody>
</table>
UK Output Trends Decline as Orders
Hover Showing Small Persisting Gains 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 20, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080220g.jpg" align="left" border="0" height="265" width="353">
The UK&#8217;s CBI report is a survey which reports purchaser type
survey data as net measures (net better Vs worse responses). The report
shows that output trends, while still showing expansion, have moved
substantially lower. Order trends have been hovering; they show small
net positive readings. This month the order series even ticked higher
to a net +3 from +2 in January. Output volume expected in the next
three months has improved a bit too. At +11 in February it is up from
+9 in January and +3 in December. Still, it is a reading that is still
below its 12-month average of 14. But prices are the real headline of
this report. Price pressures continue to rise. At +22 they are
accelerating and are above their 12-month average of 18. Prices for the
next 3 months stand in the 95th percentile of their range. This is
stronger than for orders or export orders where the rankings show them
in the top 79th to 88th percentile of their ranges. Output is only in
the top 30% of its range. While the BOE is cutting rates the output and
orders barometers in this report are still firm but price expectations
are pushing their limits. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">UK
Industrial Volume Data CBI Survey </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Reported:</td>
<td>Jan-08</td>
<td>Dec-07</td>
<td>Nov-07</td>
<td>Oct-07</td>
<td>12-mo Avg</td>
<td>Pcntle</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>2</td>
<td>2</td>
<td>8</td>
<td>-6</td>
<td>4</td>
<td>86%</td>
<td>9</td>
<td>-40</td>
<td>49</td>
</tr>
<tr>
<td class="firstcol">Export Orders</td>
<td>-4</td>
<td>2</td>
<td>-4</td>
<td>-9</td>
<td>-3</td>
<td>87%</td>
<td>3</td>
<td>-50</td>
<td>53</td>
</tr>
<tr>
<td class="firstcol">Stocks: Final Goods</td>
<td>7</td>
<td>14</td>
<td>14</td>
<td>14</td>
<td>9</td>
<td>32%</td>
<td>26</td>
<td>-2</td>
<td>28</td>
</tr>
<tr>
<td class="firstcol">Output Volume: Next 3M</td>
<td>9</td>
<td>3</td>
<td>9</td>
<td>10</td>
<td>15</td>
<td>66%</td>
<td>28</td>
<td>-28</td>
<td>56</td>
</tr>
<tr>
<td class="firstcol">Averages Prices for Next 3M</td>
<td>21</td>
<td>15</td>
<td>21</td>
<td>14</td>
<td>18</td>
<td>93%</td>
<td>25</td>
<td>-30</td>
<td>55</td>
</tr>
<tr class="grey2">
<td colspan="10" class="firstcol">From end
2000</td>
</tr>
</tbody>
</table>
</body></html>

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/080219f.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s own leading index composite is demonstrating ongoing
weakness. The OECD&#8217;s take is that there is an improvement afoot.
Japan&#8217;s own index peaked in the first half of 2006 and has since then
been in a steady and rapid deteriorating phase. Not so for the OECD
measure. It went flat from early 2006 to early 2007 then fell sharply
but has since regained about half of its drop. These are two different
views of Japan&#8217;s future to be sure &#8211; as well as different views of its
present.
While the two indexes broadly tell the same story
historically,
currently their divergence has never been so great. The OECD index is a
bit smoother back through time. There have been disagreements in the
message of these two indexes before, but never one so stark with one
index rising while the other is falling. In the past they were not
directionally different as much as one simply lagged the other. 
Recently it seems that the OECD index has performed a bit
better. In
2000 it turned over to show weakness first. From 2001 to 2005 it
expanded steadily while Japan&#8217;s own index moved up to dwell at two
separate plateaus before expanding again. It is hard to argue with the
OECD&#8217;s recent plateauing then dropping as being a superior signal to
the Japan&#8217;s domestic LEI that has simply fallen so sharply that it
would be reasonable to look for even more disruption in the economy. But then maybe that bad news is
still in the pipeline?
On the other hand what rings false about the OECD index is
that,
apart from the recent episode of plateauing then dropping, it has the
index at its highest point in 15 years. The Japan&#8217;s domestic LEI has
the index level back below four past peaks going back to 1994. Those
are real differences, not just different assessments on the timing of
the economic rebound. 
 

We are left in a quandary by these discrepancies. Still it is
clear
that both reports are saying that Japan has taken some hit and the
uncertainty is about how soon or vigorous the recovery will be. But
they are also saying that there is some difference of opinion on how
hard Japan has been hit and that is an important element in assessing
the depth of the expected drop as well as the timing of recovery. As a
result we must be prepared to continue to watch Japan closely.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> Japan's
LEI and its Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Levels</td>
<td colspan="4">Growth (saar)</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td> Dec-07</td>
<td> Nov-07</td>
<td> Oct-07</td>
<td> 3M0</td>
<td> 6M0</td>
<td> 12Mo</td>
<td> 24MO</td>
</tr>
<tr>
<td class="firstcol">LEI</td>
<td>97.3</td>
<td>97.8</td>
<td>100.3</td>
<td>-7.1%</td>
<td>-10.1%</td>
<td>-5.8%</td>
<td>-7.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">LEI: OECD</td>
<td>105.7</td>
<td>104.6</td>
<td>103.5</td>
<td>11.0%</td>
<td>-1.9%</td>
<td>-2.0%</td>
<td>-0.7%</td>
</tr>
<tr style="font-weight: bold;" class="even">
<td class="firstcol" colspan="8">OECD LEI
Details</td>
</tr>
<tr class="grey1">
<td class="firstcol">Share P</td>
<td>1.2</td>
<td>1.2</td>
<td>1.3</td>
<td>-12.7%</td>
<td>-27.0%</td>
<td>-8.2%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">Int Spread (chngs)</td>
<td>-0.5</td>
<td>-0.5</td>
<td>-0.4</td>
<td>-0.2</td>
<td>-0.5</td>
<td>-0.4</td>
<td>-0.7</td>
</tr>
<tr class="grey1">
<td class="firstcol">Loan/Deposit</td>
<td>#N/A</td>
<td>1.1</td>
<td>1.1</td>
<td>-1.1%</td>
<td>1.5%</td>
<td>1.2%</td>
<td>7.1%</td>
</tr>
<tr>
<td class="firstcol">Dwellings Started</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>319.1%</td>
<td>-39.9%</td>
<td>-18.4%</td>
<td>-8.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">OT-MFG</td>
<td>#N/A</td>
<td>1.0</td>
<td>1.0</td>
<td>8.5%</td>
<td>6.3%</td>
<td>0.0%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Stocks/Deliv (M&amp;M)</td>
<td>#N/A</td>
<td>1.0</td>
<td>1.0</td>
<td>10.6%</td>
<td>6.6%</td>
<td>1.3%</td>
<td>2.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Exp&gt;Imp</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-40.9%</td>
<td>93.6%</td>
<td>-214.3%</td>
<td>-900.0%</td>
</tr>
<tr>
<td class="firstcol"> SmallBiz</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>7.1%</td>
<td>-6.4%</td>
<td>-8.1%</td>
<td>-5.2%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">Grey shaded
rows are one month
behind current; Small Biz lags by SIX months</td>
</tr>
</tbody>
</table>
</body></html>

Japan’s own leading index composite is demonstrating ongoing weakness. The OECD’s take is that there is an improvement afoot. Japan’s own index peaked in the first half of 2006 and has since then been in a steady and rapid [...]

Japan Offers Up some Mixed Signals From Two LEI Concepts

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/080219c.jpg" align="left" border="0" height="265" width="353">
Japan reported a record current account surplus of 250,012 100
million yen or about $215 billion for the year 2007 about a week ago.
The current account balance for the past 12 years is shown in the first
chart.
Today Japan reported the breakdown of the current account
surplus by region for the third quarter of the year. Japan continues to
run its largest surplus on current account with the United States,
however, it's surplus with Western Europe appears to be growing faster
than that of the U.S. as can be seen in the second chart. This chart
also shows Japan's current account surplus with Central/South America,
which shows a small upward trend.
Japan has traditionally run a deficit with China, Indonesia
and the Middle East. The deficits with the Indonesia and the Middle
East are largely the as a result of Japan's dependence on imported oil.
These deficits have increased sharply with the rise in the price of
oil. The deficit with China, however, has decreased significantly this
year as can be seen in the third chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219d.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219e.jpg" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">JAPAN
CURRENT ACCOUNT BY REGION (100 billion yen)&nbsp;</th>
<th scope="col">Q4 07</th>
<th scope="col">Q3 07&nbsp;</th>
<th scope="col">Q2 07&nbsp;</th>
<th scope="col">Q1 07&nbsp;</th>
<th scope="col">2007&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>57.6</td>
<td>68.6</td>
<td>56.0</td>
<td>68.3</td>
<td>250.0</td>
<td>198.5</td>
<td>182.6</td>
<td>186.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;United
States&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>n.a.</td>
<td>33.</td>
<td>26.9</td>
<td>37.4</td>
<td>n.a.</td>
<td>130.8</td>
<td>111.2</td>
<td>96.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Western
Europe</td>
<td>n.a.</td>
<td>21.6</td>
<td>19.4</td>
<td>24.3</td>
<td>n.a.</td>
<td>66.9</td>
<td>51.6</td>
<td>46.0</td>
</tr>
<tr>
<td class="firstcol">
&nbsp;&nbsp;Central/South America</td>
<td>n.a.</td>
<td>6.1</td>
<td>4.5</td>
<td>8.0</td>
<td>n.a.</td>
<td>21.8</td>
<td>19.1</td>
<td>11.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;China</td>
<td>n.a.</td>
<td>-2.0</td>
<td>-3.5</td>
<td>-4.2</td>
<td>n.a.</td>
<td>-22.0</td>
<td>-25.6</td>
<td>-14.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Indonesia</td>
<td>n.a.</td>
<td>-4.3</td>
<td>-4.0</td>
<td>-4.1</td>
<td>n.a.</td>
<td>-15.2</td>
<td>-9.1</td>
<td>-6.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Middle
East&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>n.a.</td>
<td>-25.5</td>
<td>-23.8</td>
<td>-22.1</td>
<td>n.a.</td>
<td>-101.5</td>
<td>-74.1</td>
<td>-48.1</td>
</tr>
</tbody>
</table>
</body></html>

Japan reported a record current account surplus of 250,012 100 million yen or about $215 billion for the year 2007 about a week ago. The current account balance for the past 12 years is shown in the first chart. Today Japan reported [...]

Japan's Current Account Balances by Region

<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/080219a.jpg" width="353">
The U.S. government ran a budget surplus last month of $17.8B. The news did not, however, represent real improvement in the government&#39;s budget condition. The surplus shrank and was roughly half that during January of 2007 when a surplus of $38.2B. Typically a surplus is run during the month of January.
The shrinkage of the January surplus highlights a worsening of the budget condition. For the first four months of FY08 the government&#39;s budget deficit of $87.7B was roughly double the $42.2B during the first four months of FY07. The deterioration in the dollar value of the deficit highlights the projected deterioration as a percentage of the nominal value of GDP.
For the fiscal year to date, growth in federal receipts slowed to 3.3% which was one third the growth during the first four months of FY07. The weaker economy with its slower employment growth brought slower growth in individual income tax receipts (44% of total receipts); to 4.2% from 12.6%. Withheld income taxes grew 4.4%, a sharp slowdown from 11.2% last fiscal year, but the weaker stock market brought a more dramatic drop in the growth in non-withheld taxes; to 4.8% from 21.9% during the four months of FY07.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219b.jpg" width="353">
Corporate income taxes (13% of total receipts) fell 2.5% as a result of the weakness in corporate profits. During FY07 they rose 16.4% during the first four months. Growth in employment &amp; general retirement contributions actually rose slightly to 5.8% from 4.0% but unemployment insurance receipts fell 6.0%, nearly twice the rate of decline in early FY07.
U.S. net outlays grew 8.3%, well up from FY07 but steady with prior years. Growth in defense spending (19% of total outlays) of 9.6% was roughly steady and Medicare expenditures (12% of outlays) fell 3.0%. Growth in social security spending (21% of outlays) held about steady at 5.7% but interest expense grew 20.3% with the rise in interest rates.
The Government&#39;s financial data is available in Haver&#39;s USECON database.
The Federal Reserve&#39;s Tools for Responding to Financial Disruptions is Friday&#39;s speech made by Federal Reserve Board Governor Frederic S. Mishkin and it can be found <a href="http://www.federalreserve.gov/newsevents/speech/mishkin20080215a.htm"> here</a> .

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E106021.HTM">US Government Finance</a> &nbsp;</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y</th>
<th scope="col">FY 2007</th>
<th scope="col">FY 2006</th>
<th scope="col">FY 2005 &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$17.839B</td>
<td>$48.261B</td>
<td>$38.236B (1/07)</td>
<td>-$162.8B</td>
<td>-$248.2B</td>
<td>-$318.7B</td>
</tr>
<tr>
<td class="firstcol">Net Revenues</td>
<td>$255.2B</td>
<td>$277.0B</td>
<td>-2.1%</td>
<td>6.7%</td>
<td>11.8%</td>
<td>14.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Outlays</td>
<td>$237.4B</td>
<td>$228.7B</td>
<td>6.7%</td>
<td>2.8%</td>
<td>7.4%</td>
<td>7.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

The U.S. government ran a budget surplus last month of $17.8B. The news did not, however, represent real improvement in the government's budget condition. The surplus shrank and was roughly half that during January of 2007 when a [...]

U.S. Budget Deficit Deeper: A Weaker Economy

<!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/080219a.jpg" align="left" border="0" height="265" width="353">
The U.S. government ran a budget surplus last month of $17.8B.
The news did not, however, represent real improvement in the
government's budget condition. The surplus shrank and was roughly half
that during January of 2007 when a surplus of $38.2B. Typically a
surplus is run during the month of January.
The shrinkage of the January surplus highlights a worsening of
the budget condition. For the first four months of FY08 the
government's budget deficit of $87.7B was roughly double the $42.2B
during the first four months of FY07. The deterioration in the dollar
value of the deficit highlights the projected deterioration as a
percentage of the nominal value of GDP.
For the fiscal year to date, growth in federal receipts slowed
to 3.3% which was one third the growth during the first four months of
FY07. The weaker economy with its slower employment growth brought
slower growth in individual income tax receipts (44% of total
receipts); to 4.2% from 12.6%. Withheld income taxes grew 4.4%, a sharp
slowdown from 11.2% last fiscal year, but the weaker stock market
brought a more dramatic drop in the growth in non-withheld taxes; to
4.8% from 21.9% during the four months of FY07.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219b.jpg" align="right" border="0" height="265" width="353">
Corporate income taxes (13% of total receipts) fell 2.5% as a
result of the weakness in corporate profits. During FY07 they rose
16.4% during the first four months. Growth in employment &amp;
general retirement contributions actually rose slightly to 5.8% from
4.0% but unemployment insurance receipts fell 6.0%, nearly twice the
rate of decline in early FY07.
U.S. net outlays grew 8.3%, well up from FY07 but steady with
prior years. Growth in defense spending (19% of total outlays) of 9.6%
was roughly steady and Medicare expenditures (12% of outlays) fell
3.0%. Growth in social security spending (21% of outlays) held about
steady at 5.7% but interest expense grew 20.3% with the rise in
interest rates.
The Government's financial data is available in Haver's USECON
database.
The Federal Reserve's Tools for Responding to
Financial Disruptions is Friday's speech made by Federal
Reserve Board Governor Frederic S. Mishkin and it can be found <a href="http://www.federalreserve.gov/newsevents/speech/mishkin20080215a.htm">
here</a> .

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E106021.HTM">US
Government Finance</a> &nbsp;</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Y/Y</th>
<th scope="col">FY 2007</th>
<th scope="col">FY 2006</th>
<th scope="col">FY 2005 &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$17.839B</td>
<td>$48.261B</td>
<td>$38.236B 
(1/07)</td>
<td>-$162.8B</td>
<td>-$248.2B</td>
<td>-$318.7B</td>
</tr>
<tr>
<td class="firstcol">Net Revenues</td>
<td>$255.2B</td>
<td>$277.0B</td>
<td>-2.1%</td>
<td>6.7%</td>
<td>11.8%</td>
<td>14.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Outlays</td>
<td>$237.4B</td>
<td>$228.7B</td>
<td>6.7%</td>
<td>2.8%</td>
<td>7.4%</td>
<td>7.6%</td>
</tr>
</tbody>
</table>
Japan's Current AccountBalances by
Region 
by <a href="/comment/Curley.html">Louise
Curley</a> February 19, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219c.jpg" align="left" border="0" height="265" width="353">
Japan reported a record current account surplus of 250,012 100
million yen or about $215 billion for the year 2007 about a week ago.
The current account balance for the past 12 years is shown in the first
chart.
Today Japan reported the breakdown of the current account
surplus by region for the third quarter of the year. Japan continues to
run its largest surplus on current account with the United States,
however, it's surplus with Western Europe appears to be growing faster
than that of the U.S. as can be seen in the second chart. This chart
also shows Japan's current account surplus with Central/South America,
which shows a small upward trend.
Japan has traditionally run a deficit with China, Indonesia
and the Middle East. The deficits with the Indonesia and the Middle
East are largely the as a result of Japan's dependence on imported oil.
These deficits have increased sharply with the rise in the price of
oil. The deficit with China, however, has decreased significantly this
year as can be seen in the third chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219d.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219e.jpg" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">JAPAN
CURRENT ACCOUNT BY REGION (100 billion yen)&nbsp;</th>
<th scope="col">Q4 07</th>
<th scope="col">Q3 07&nbsp;</th>
<th scope="col">Q2 07&nbsp;</th>
<th scope="col">Q1 07&nbsp;</th>
<th scope="col">2007&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>57.6</td>
<td>68.6</td>
<td>56.0</td>
<td>68.3</td>
<td>250.0</td>
<td>198.5</td>
<td>182.6</td>
<td>186.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;United
States&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>n.a.</td>
<td>33.</td>
<td>26.9</td>
<td>37.4</td>
<td>n.a.</td>
<td>130.8</td>
<td>111.2</td>
<td>96.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Western
Europe</td>
<td>n.a.</td>
<td>21.6</td>
<td>19.4</td>
<td>24.3</td>
<td>n.a.</td>
<td>66.9</td>
<td>51.6</td>
<td>46.0</td>
</tr>
<tr>
<td class="firstcol">
&nbsp;&nbsp;Central/South America</td>
<td>n.a.</td>
<td>6.1</td>
<td>4.5</td>
<td>8.0</td>
<td>n.a.</td>
<td>21.8</td>
<td>19.1</td>
<td>11.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;China</td>
<td>n.a.</td>
<td>-2.0</td>
<td>-3.5</td>
<td>-4.2</td>
<td>n.a.</td>
<td>-22.0</td>
<td>-25.6</td>
<td>-14.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Indonesia</td>
<td>n.a.</td>
<td>-4.3</td>
<td>-4.0</td>
<td>-4.1</td>
<td>n.a.</td>
<td>-15.2</td>
<td>-9.1</td>
<td>-6.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Middle
East&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>n.a.</td>
<td>-25.5</td>
<td>-23.8</td>
<td>-22.1</td>
<td>n.a.</td>
<td>-101.5</td>
<td>-74.1</td>
<td>-48.1</td>
</tr>
</tbody>
</table>
Japan Offers Up some Mixed Signals
From Two LEI Concepts 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 19, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080219f.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s own leading index composite is demonstrating ongoing
weakness. The OECD&#8217;s take is that there is an improvement afoot.
Japan&#8217;s own index peaked in the first half of 2006 and has since then
been in a steady and rapid deteriorating phase. Not so for the OECD
measure. It went flat from early 2006 to early 2007 then fell sharply
but has since regained about half of its drop. These are two different
views of Japan&#8217;s future to be sure &#8211; as well as different views of its
present.
While the two indexes broadly tell the same story
historically,
currently their divergence has never been so great. The OECD index is a
bit smoother back through time. There have been disagreements in the
message of these two indexes before, but never one so stark with one
index rising while the other is falling. In the past they were not
directionally different as much as one simply lagged the other. 
Recently it seems that the OECD index has performed a bit
better. In
2000 it turned over to show weakness first. From 2001 to 2005 it
expanded steadily while Japan&#8217;s own index moved up to dwell at two
separate plateaus before expanding again. It is hard to argue with the
OECD&#8217;s recent plateauing then dropping as being a superior signal to
the Japan&#8217;s domestic LEI that has simply fallen so sharply that it
would be reasonable to look for even more disruption in the economy. But then maybe that bad news is
still in the pipeline?
On the other hand what rings false about the OECD index is
that,
apart from the recent episode of plateauing then dropping, it has the
index at its highest point in 15 years. The Japan&#8217;s domestic LEI has
the index level back below four past peaks going back to 1994. Those
are real differences, not just different assessments on the timing of
the economic rebound. 
 

We are left in a quandary by these discrepancies. Still it is
clear
that both reports are saying that Japan has taken some hit and the
uncertainty is about how soon or vigorous the recovery will be. But
they are also saying that there is some difference of opinion on how
hard Japan has been hit and that is an important element in assessing
the depth of the expected drop as well as the timing of recovery. As a
result we must be prepared to continue to watch Japan closely.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> Japan's
LEI and its Trends </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Levels</td>
<td colspan="4">Growth (saar)</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td> Dec-07</td>
<td> Nov-07</td>
<td> Oct-07</td>
<td> 3M0</td>
<td> 6M0</td>
<td> 12Mo</td>
<td> 24MO</td>
</tr>
<tr>
<td class="firstcol">LEI</td>
<td>97.3</td>
<td>97.8</td>
<td>100.3</td>
<td>-7.1%</td>
<td>-10.1%</td>
<td>-5.8%</td>
<td>-7.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">LEI: OECD</td>
<td>105.7</td>
<td>104.6</td>
<td>103.5</td>
<td>11.0%</td>
<td>-1.9%</td>
<td>-2.0%</td>
<td>-0.7%</td>
</tr>
<tr style="font-weight: bold;" class="even">
<td class="firstcol" colspan="8">OECD LEI
Details</td>
</tr>
<tr class="grey1">
<td class="firstcol">Share P</td>
<td>1.2</td>
<td>1.2</td>
<td>1.3</td>
<td>-12.7%</td>
<td>-27.0%</td>
<td>-8.2%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">Int Spread (chngs)</td>
<td>-0.5</td>
<td>-0.5</td>
<td>-0.4</td>
<td>-0.2</td>
<td>-0.5</td>
<td>-0.4</td>
<td>-0.7</td>
</tr>
<tr class="grey1">
<td class="firstcol">Loan/Deposit</td>
<td>#N/A</td>
<td>1.1</td>
<td>1.1</td>
<td>-1.1%</td>
<td>1.5%</td>
<td>1.2%</td>
<td>7.1%</td>
</tr>
<tr>
<td class="firstcol">Dwellings Started</td>
<td>0.9</td>
<td>0.9</td>
<td>0.8</td>
<td>319.1%</td>
<td>-39.9%</td>
<td>-18.4%</td>
<td>-8.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">OT-MFG</td>
<td>#N/A</td>
<td>1.0</td>
<td>1.0</td>
<td>8.5%</td>
<td>6.3%</td>
<td>0.0%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Stocks/Deliv (M&amp;M)</td>
<td>#N/A</td>
<td>1.0</td>
<td>1.0</td>
<td>10.6%</td>
<td>6.6%</td>
<td>1.3%</td>
<td>2.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Exp&gt;Imp</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-0.1</td>
<td>-40.9%</td>
<td>93.6%</td>
<td>-214.3%</td>
<td>-900.0%</td>
</tr>
<tr>
<td class="firstcol"> SmallBiz</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>7.1%</td>
<td>-6.4%</td>
<td>-8.1%</td>
<td>-5.2%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">Grey shaded
rows are one month
behind current; Small Biz lags by SIX months</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/080218a.jpg" align="left" border="0" height="265" width="353">
China and Singapore reported foreign trade figures for
January, today. The largest country in Asia and one of the smallest
both reported increases in their trade balances for the month. In the
year over year comparison, however, China showed an increase of $4115
million and Singapore a decrease of $1,722 million.
The moderation in China's trade surplus that took place at the
end of last year was reversed in January. As a result of an $8,415
million increase in exports and a $4,642 million increase in imports,
the balance on trade rose $3,777 million, to $24,750 million in
January, the second highest on record. Singapore's trade surplus rose
$844 million from December as a result of a $5,227 million increase in
exports and a $4,383 million increase in imports. China's and
Singapore's trade balances are shown in the first chart.
Although Singapore is a tiny city state with a population of
4.4 million compared with China's 1.3 billion, its exports in 2007 were
equal to 25% of China's. (In the mid nineties, Singapore's exports were
equal to 80% of China's, but with the more rapid rise of China's
exports than those of Singapore, that percentage has declined over the
years, as shown in the second chart.) However, foreign trade still
plays a greater role in its economy than it does in China. Its net
exports accounted for 30% of nominal GDP in 2006, compared with 7.5%
for China as can be seen in the third chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080218b.jpg" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080218c.jpg" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">China&nbsp;
and Singapore Foreign Trade 
&nbsp;(In millions USD)&nbsp;</th>
<th scope="col">Jan 08</th>
<th scope="col">Dec 07&nbsp;</th>
<th scope="col">Jan 07&nbsp;</th>
<th scope="col">M/M Chg&nbsp;</th>
<th scope="col">Y/Y Chg&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">China Balance of Trade</td>
<td>24750</td>
<td>20973</td>
<td>20635</td>
<td>3777</td>
<td>4115</td>
<td>262201</td>
<td>177476</td>
<td>101999</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Exports&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>117000</td>
<td>108581</td>
<td>92077</td>
<td>8419</td>
<td>24923</td>
<td>1218020</td>
<td>968936</td>
<td>761953</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports</td>
<td>92250</td>
<td>87608</td>
<td>71442</td>
<td>4642</td>
<td>20808</td>
<td>955819</td>
<td>791460</td>
<td>659954</td>
</tr>
<tr>
<td class="firstcol"> Singapore Balance of Trade</td>
<td>2967</td>
<td>2123</td>
<td>4690</td>
<td>844</td>
<td>-1723</td>
<td>36151</td>
<td>33109</td>
<td>29607</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Exports&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>31215</td>
<td>25988</td>
<td>25549</td>
<td>5227</td>
<td>5666</td>
<td>299393</td>
<td>271892</td>
<td>229681</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Imports</td>
<td>28248</td>
<td>23865</td>
<td>20859</td>
<td>4383</td>
<td>7389</td>
<td>263242</td>
<td>38783</td>
<td>200074</td>
</tr>
</tbody>
</table>
</body></html>

China and Singapore reported foreign trade figures for January, today. The largest country in Asia and one of the smallest both reported increases in their trade balances for the month. In the year over year comparison, however, China [...]

China and Singapore ---The Big and The Small---Show Increased Trade Surpluses

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?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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

Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

250501Z1.jpg

**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

250501Z2.jpg

**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

250501Z3.jpg

**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

250501Z4.jpg

**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

250501Z5.jpg

**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

250501Z6.jpg

Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/3PzXXKrkHcwtOLipohEdnB?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Tariff Truce, Tenuous Trust

250501F20.jpg

250501G20.jpg

U.S. light vehicle sales dropped 2.9% (+6.5% y/y) to 17.31 million units (SAAR) in April after surging 10.8% to 17.82 million units in March. The retreat in April vehicle sales accompanied a 1.7% y/y rise in real disposable income through March, which compared to 2.0% growth last year.

Sales declines were broad-based last month. Light truck sales fell 1.3% (+9.9% y/y) during April to 14.34 million units (SAAR), after rising 12.4% in March. Purchases of domestically-made light trucks declined 1.2% (+11.9% y/y) to 11.02 million units, after jumping 12.5% in March. Sales of imported light trucks fell 1.8% (+4.4% y/y) to 3.32 million units, following an 11.6% March surge.

Trucks’ record 82.8% share of the light vehicle market last month compared to 81.5% in March and 80.3% in April of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales also declined last month, down 9.5% (-7.5%) to 2.97 million units (SAAR) following a 3.5% March rise. The decline reversed all of the increase over the prior two months. Purchases of domestically-produced cars fell 9.8% (-4.3% y/y) last month to 2.22 million units, after rising 3.8% in March. Sales of imported autos declined 9.6% (-15.7% y/y) to 0.75 million units, following a 2.5% March increase.

Imports' 23.5% share of the U.S. light vehicle market was little changed from 23.6% in March and compared 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 held steady at 25.3% last month and compared to 27.7% in April of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.2% last month after falling to 23.3% in March.

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

250501H20.jpg

250501I20.jpg

- Light truck sales pull back, while auto sales tumble.
- Both domestic and imported sales decline.
- Imports' market share slips further.

U.S. Light Vehicle Sales Fall in April

250501J5.jpg

250501K5.jpg

The ISM Purchasing Managers Index of activity in the manufacturing sector slipped to 48.7 in April from 49.0 during March and 50.3 in February. It remained up from a low of 46.9 in October of last year. A level of 50 is the break-even point between a rising and falling level of activity. The Action Economics Forecast Survey expected a reading of 47.8 for April. The series reached a monthly high of 63.8 in March 2021.

Two of the five component indexes weakened last month. The April production index fell to 44.0 after declining to 48.3 in March. It was the lowest level since May 2020. A lessened 19.8% (NSA) of respondents reported higher production while an increased 24.2% reported lower output. The inventories index declined to 50.8 last month from 53.4 in March. The index remained up from a low of 43.2 in October of last year.

Moving higher, the new orders index rose to 47.2 last month from 45.2 in March. The index remained below a January high of 55.1. Twenty-eight percent (NSA) of respondents reported higher new orders while 26.7% reported a decline. The employment index rose to 46.5 from 44.7 in March. It was below a high of 50.3 in January. A greater 13.1% (NSA) of respondents reported more hiring while a fewer 16.2% indicated less. The supplier delivery index rose to 55.2 from 53.5 in March. A higher 16.6% (NSA) of respondents reported slower delivery speeds while a fairly steady 6.2% reported a quickening.

The prices index, which is not part of the composite series, edged up to 69.8 (NSA) in April after increasing to 69.4 in March. It was the highest level since June 2022, up from a December 2022 low of 39.4. An increased 49.2% of respondents reported higher prices last month, up from 12.2% in November, while a higher 9.7% reported lower prices.

In other series, the export orders index plummeted to 43.1 in April from 49.6 during March. It was down from the high of 52.4 in January. The imports index fell sharply to 47.1 from 50.1 in March. It was the lowest reading since December 2023. The order backlog index dropped to 43.7 (NSA) last month from 44.5 in March. It was the lowest level in five months.

The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. 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.

250501L5.jpg

250501M5.jpg

- Declines in last three months follow earlier improvement.
- Production & inventories account for m/m shortfall.
- Prices index edges up to another three-year high.

U.S. ISM Manufacturing Index Indicates Contraction in April

Winnie Tapasanun

250501N.jpg

250501O.jpg

The value of construction put in place unexpectedly fell 0.5% m/m in March after rises of 0.6% in February (+0.7% initially) and 0.1% in January (-0.5% previously), data from the U.S. Census Bureau showed. The March reading was the first m/m fall following five straight m/m gains. A 0.3% m/m March rise had been expected in the Action Economics Forecast Survey. The year-on-year rate of increase decelerated to 2.8% in March, the lowest since May 2019, after registering at 3.4% in February and January. The latest y/y figure was lower than 8.7% in March 2024; thus, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.

Private construction slid 0.6% (+2.3% y/y) in March, down for the first time since September, following increases of 0.7% in February (+0.9% initially) and 0.1% in January (-0.7% previously). Residential private construction fell 0.4% (+2.8% y/y) in March, the first m/m fall in six months, after an unrevised 1.3% gain in February. Home improvement building dropped 1.2% (+13.4% y/y), the first m/m decline since December, following a 2.3% February gain; it was 41.1% of the residential private construction. Single-family building edged up 0.1% (-0.8% y/y), the smallest of seven consecutive m/m increases, after a 0.8% February rise; it was 46.6% of the residential private construction. Meanwhile, multi-family building was essentially unchanged m/m (-12.1% y/y) in March following 15 straight m/m decreases; it was 12.3% of the residential private construction.

Nonresidential private construction fell 0.8% (+1.6% y/y) in March after a 0.1% increase in February (+0.4% initially) and a 0.1% easing in January (-0.2% previously). The March fall reflected m/m drops in the following nonresidential private constructions. These included religious (-2.9%; +16.4% y/y), health care (-2.2%; -5.2% y/y), office (-1.8%; +2.7% y/y), educational (-1.7%; -4.2% y/y), lodging (-1.6%; -1.0% y/y), commercial (-1.0%; -5.8% y/y), manufacturing (-0.4%; +3.6% y/y), communication (-0.3%; +2.2% y/y), and utilities (-0.1%; +7.0% y/y). In contrast, private constructions for amusement & recreation (1.5%; 7.0% y/y) and transportation (0.7%; 10.2% y/y) rose m/m in March.

The value of public construction declined 0.2% (+4.7% y/y) in March after holding steady in February (+0.2% initially), reflecting a 0.2% increase (-1.9% y/y) in residential public construction and a 0.2% easing (+4.8% y/y) in nonresidential public construction. The March decline reflected m/m drops in the following nonresidential public constructions. These included utilities (-4.8%; -12.8% y/y), commercial (-1.6%; +40.3% y/y), amusement & recreation (-1.0%; +19.1% y/y), educational (-0.6%; +7.6% y/y), sewage & waste disposal (-0.6%; +10.6% y/y), and health care (-0.4%; +13.0% y/y). Notably, spending on highways & streets, which made up 28.7% of public construction spending, fell 0.5% (-2.4% y/y) in March, the first m/m fall since October, following a 0.9% increase in February. To the upside, the following public constructions rose m/m in March: office (1.6%; 6.0% y/y), transportation (1.4%; 7.3% y/y), public safety (0.7%; 4.1% y/y), conservation & development (0.6%; 4.7% y/y), and water supply (0.6%; 12.2% y/y).

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

250501P.jpg

250501Q.jpg

- March construction spending -0.5% m/m; +2.8% y/y, the lowest y/y rate since May ’19.
- Residential private construction -0.4% m/m, led by a 1.2% drop in home improvement building.
- Nonresidential private construction -0.8% m/m, down for the second month in three.
- Public sector construction -0.2% m/m, reflecting a 0.2% decline in nonresidential public building.

U.S. Construction Spending Unexpectedly Drops in March, the First M/M Fall Since September

Carol Stone, CBE

250501A8.jpg

250501B8.jpg

Initial claims for unemployment insurance rose 18,000 in the week ended April 26 to 241,000, seasonally adjusted.  This is higher by 16,000 than the Action Economics Forecast Survey amount of 225,000 and is the largest amount since the week of February 22. The previous week’s actual count was revised up by 1,000 to 223,000, from 222,000 reported initially.

The total number of unemployment insurance beneficiaries – also known as “continuing claims” – in the week ended April 19 was 1.916 million, up 83,000 from the prior week’s 1.833 million; that earlier amount was revised down by 8,000.

The insured unemployment rate, that is, the number of beneficiaries as a percentage of covered employment, was 1.3% in the April 19 week, following 1.2% continuously since the week of January 6, 2024.

Economic conditions vary widely across states and territories.  In the week ended April 12, the highest unemployment rates were in New Jersey (2.39%), California (2.24%), Washington (2.19%), Rhode Island (2.17%) and Massachusetts (1.93%).  The lowest rates were in Florida (0.35%), South Dakota (0.40%), Alabama (0.41%), Virginia (0.45%) and Tennessee (0.48%).  Rates in other notable states include the Illinois (1.85%), New York (1.71%), Pennsylvania (1.54%) and Texas (1.09%). 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 U**SECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

250501C8.jpg

250501D8.jpg

- Actual initial claims amount is 16,000 more than forecast.
- Total beneficiaries rose by 83,000.
- Insured unemployment rate ticked up to 1.3% after 15 months at 1.2%.

Economy in Brief: February 2008

Jump to:

U.S. Housing Starts Remain Near 1991 Lows

U.S. CPI Total Stable, Core Strongest Since 2006

U.S. CPI Total Stable, Core Strongest Since 2006

Japan Offers Up some Mixed Signals From Two LEI Concepts

Japan's Current Account Balances by Region

U.S. Budget Deficit Deeper: A Weaker Economy

U.S. Budget Deficit Deeper: A Weaker Economy

China and Singapore ---The Big and The Small---Show Increased Trade Surpluses