Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814g.jpg" align="right" border="0" height="265" width="353">Worries
about personal finances and the shape of the U.S. economy persisted
this month. The University of Michigan's early-August reading of
consumer sentiment fell to 63.2 from 66.0 during July and was down for
the third consecutive month. Moreover, sentiment was at its lowest
level since March. Consensus expectations had been for a firmer August
reading of 69.0. During the last ten years, there has been a 69%
correlation between the level of sentiment and the growth in real
consumer spending during the next five months.
The reading of current
economic conditions fell the hardest this month with a 7.9% drop which
was double the July decline. The reading of current personal finances
fell quite hard m/m as employment &amp; income weakness lagged the
stock market's improvement. In fact, the level of the reading
was at a record low. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814h.jpg" align="right" border="0" height="265" width="353">
Also within the current conditions index
was a decline in buying conditions for large household goods to the
lowest level since April.
The expectations component of the
sentiment index also fell this month. It posted a moderate 1.7% decline
after the 8.7% July drop. But still the index up y/y. Expectations for
personal finances fell, down for the third month in four (+1.9% y/y).
Expected business conditions during the next year also fell for the
second month in three but expectations for conditions during the next
five years ticked higher (+6.9% y/y). Inflation expectations for the
next year fell sharply to 2.9% which was the lowest level since March.
That compares to a low of 1.7% last December but remained down from a
reading which was as high as 7.0% during May of last year.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814i.jpg" align="right" border="0" height="265" width="353">
The opinion
of government policy, which may eventually influence economic
expectations, fell for the third straight month to its lowest level
since February. An increased 36% of respondents thought that a poor job
was being done by government while a reduced 17% thought that a good
job was being done.
 The University of Michigan survey data is not
seasonally adjusted. &nbsp;The reading is based on telephone
interviews with about 500 households at month-end; the mid-month
results are based on about 300 interviews.&nbsp; The summary
indexes are in Haver's USECON database with
details in the proprietary UMSCA database.&nbsp;
<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/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">Mid-August</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Aug y/y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>63.2</td>
<td>66.0</td>
<td>70.8</td>
<td>0.3%</td>
<td>63.8</td>
<td>85.6</td>
<td>87.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>64.9</td>
<td>70.5</td>
<td>73.2</td>
<td>-8.6</td>
<td>73.7</td>
<td>101.2</td>
<td>105.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>62.1</td>
<td>63.2</td>
<td>69.2</td>
<td>7.3</td>
<td>57.3</td>
<td>75.6</td>
<td>75.9</td>
</tr>
</tbody>
</table>

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Worries about personal finances and the shape of the U.S. economy persisted this month. The University of Michigan's early-August reading of consumer sentiment fell to 63.2 from 66.0 during July and was down for the third consecutive [...]

Michigan Consumer Sentiment Declines As The Reading of Personal Finances Falls 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/090814e.jpg" width="353">
A consistent indicator of turning points in the U.S. economy has been industrial output. And last month it signaled growth. Industrial output, which includes mining and utilities, rose a greater-than-expected 0.5% during July after an unrevised 0.4% June decline. More important for recession timing, perhaps, was that factory output increased for the first month since December of 2006. This call still is not a sure thing, however, because of the industry composition of the gain.
Output of consumer goods overall jumped 0.7% during July led by a 17.3% surge in auto production (-22.2% y/y). But that&#39;s only a partial indication of a change from the widespread downward momentum in industry output. Furniture &amp; appliance output slipped 0.1% (-22.3% y/y) as consumers continued to defer purchases of large durable goods. Consumer nondurables output fell 0.9% with a decline in chemical products products production but output of business equipment rose 0.5% (-17.3% y/y. The output of construction supplies slipped 0.1% (-20.9% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814f.jpg" width="353">
In the the high-tech sector the rate of decline in output also has slowed. Industrial production of high tech equipment slipped 0.1% last month. Less high tech, manufacturing industrial production jumped 1.0% last month and the annual rate of change eased to -9.8% over the last seven months. Outside of the auto and high-tech sectors together, output rose 0.1% for the first increase since last October.
Excess capacity diminshed slightly with the rise in production. Capacity utilization rose from its record low to 68.5%. The series dates back to 1966. Utilization in the factory sector also improved to 65.4%, still down from a peak near 80% back in 2007.
The industrial production data are available in Haver&#39;s USECON database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">INDUSTRIAL PRODUCTION (SA, %)</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Output </td>
<td>0.5</td>
<td>-0.4</td>
<td>-13.0</td>
<td>-2.2</td>
<td>1.5</td>
<td>2.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Manufacturing</td>
<td>1.0</td>
<td>-0.5</td>
<td>-14.4</td>
<td>-3.2</td>
<td>1.4</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp; Consumer Goods</td>
<td>0.7</td>
<td>-0.6</td>
<td>-7.2</td>
<td>-2.6</td>
<td>0.9</td>
<td>0.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp; Business Equipment</td>
<td>0.5</td>
<td>-0.7</td>
<td>-17.3</td>
<td>-1.1</td>
<td>2.7</td>
<td>9.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp; Construction Supplies</td>
<td>-0.1</td>
<td>-0.4</td>
<td>-20.9</td>
<td>-6.3</td>
<td>-2.0</td>
<td>2.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Utilities</td>
<td>-2.5</td>
<td>0.9</td>
<td>-4.9</td>
<td>0.3</td>
<td>3.4</td>
<td>-0.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Capacity Utilization</td>
<td>68.5</td>
<td>68.1</td>
<td>78.6 (July &#39;08)</td>
<td>77.6</td>
<td>80.6</td>
<td>80.9</td>
</tr>
</tbody>
</table>


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A consistent indicator of turning points in the U.S. economy has been industrial output. And last month it signaled growth. Industrial output, which includes mining and utilities, rose a greater-than-expected 0.5% during July after an [...]

U.S. Factory Production Improves Sharply With Higher Auto Output

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814d.jpg" align="left" border="0" height="265" width="353">
The EMU HICP fell by a larger than expected 0.7% Yr/Yr. But
with France and Germany emerging from recession in yesterday&#8217;s GDP
reports, markets are not focused on inflation being under control or
worried about deflation with the Yr/Yr drop, but instead worried that
inflation is going to be a problem sooner rather than later. Isn&#8217;t that
just like markets? Nothing is what is seems.
Forecasts made up to this point have been assuming that Europe
was going to remain weak for some time. Now with the early exit from
recession by Germany and France and the small drop in EMU GDP in
2009-Q2, inflation forecasts are beginning to get a re-think.
Ex food and energy inflation in EMU is at +0.6%. The core
measure of inflation was flat in July, up by 0.1% in June and flat in
May. There isn&#8217;t exactly any news saying inflation is building momentum
here.
Moreover, although Germany and France have &#8216;existed recession&#8217;
they have done so in a most peculiar way. And before calling it the
&#8216;end of recession&#8217; perhaps we should wait and see what has been cooked
into its GDP stew. As we pointed out in the write&#8211;up of European GDP
yesterday, the diffusion indicators that track the various sectors
across European nations and in EMU are still at very depressed levels.
This has to conjure up concerns of what ether GDP rose upon in Q2 and
if those fumes will still have lifting force in 2009-Q3.
In short, it seems a bad time to start to raise inflation
forecasts and fears. The EMU-wide HICP is in a strong drop; it is not
covering for any inflation under the surface and the surprising growth
served up by several European economies is equally surprising after the
fact as we try to understand it. Is that real and is it really a basis
for concerns about STRONG growth? 
The bottom line is that inflation is under control in Europe
and barring something exceptional - that we have not yet seen -- it
should stay that way.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"> Trends in HICP </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% Mo/Mo</td>
<td colspan="4">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jul-09</td>
<td>Jun-09</td>
<td>May-09</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
</tr>
<tr class="even">
<td class="firstcol">EMU</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>0.0%</td>
<td>-0.2%</td>
<td> 0.2%</td>
<td>-0.7%</td>
<td>4.0%</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp; Core</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.6%</td>
<td> 1.3%</td>
<td>1.2%</td>
<td>2.5%</td>
</tr>
<tr class="even">
<td class="firstcol">Goods</td>
<td>-1.7%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>-5.5%</td>
<td> -0.1%</td>
<td>-2.4%</td>
<td>5.1%</td>
</tr>
<tr class="even">
<td class="firstcol">Services</td>
<td>0.8%</td>
<td>0.1%</td>
<td>0.1%</td>
<td> 4.1%</td>
<td> 3.7%</td>
<td>1.9%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">&nbsp;</td>
</tr>
<tr>
<td class="firstcol" colspan="8">HICP</td>
</tr>
<tr class="even">
<td class="firstcol">Germany</td>
<td>-0.5%</td>
<td>0.5%</td>
<td>-0.2%</td>
<td>-0.7%</td>
<td> -0.2%</td>
<td>-0.7%</td>
<td>3.5%</td>
</tr>
<tr class="even">
<td class="firstcol">France</td>
<td>-0.1%</td>
<td>0.2%</td>
<td>0.0%</td>
<td> 0.3%</td>
<td> 0.3%</td>
<td>-0.8%</td>
<td>4.0%</td>
</tr>
<tr class="even">
<td class="firstcol">Italy</td>
<td>-0.6%</td>
<td>0.3%</td>
<td>0.0%</td>
<td>-1.1%</td>
<td> 0.7%</td>
<td>-0.1%</td>
<td>4.1%</td>
</tr>
<tr class="even">
<td class="firstcol">Spain</td>
<td>0.1%</td>
<td>0.4%</td>
<td>-0.1%</td>
<td> 1.7%</td>
<td> 0.3%</td>
<td>-1.4%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Core:xFE&amp;A</td>
</tr>
<tr class="even">
<td class="firstcol">Germany</td>
<td>0.1%</td>
<td>0.2%</td>
<td>-0.1%</td>
<td>0.8%</td>
<td> 1.7%</td>
<td>1.1%</td>
<td>1.8%</td>
</tr>
<tr class="even">
<td class="firstcol">Italy</td>
<td>-0.4%</td>
<td>0.1%</td>
<td>0.1%</td>
<td>-0.7%</td>
<td>1.3%</td>
<td>1.3%</td>
<td>2.8%</td>
</tr>
<tr class="even">
<td class="firstcol">Spain</td>
<td>0.2%</td>
<td>0.2%</td>
<td>0.0%</td>
<td> 1.3%</td>
<td>0.5%</td>
<td>0.7%</td>
<td>3.5%</td>
</tr>
</tbody>
</table>
</body></html>

The EMU HICP fell by a larger than expected 0.7% Yr/Yr. But with France and Germany emerging from recession in yesterday’s GDP reports, markets are not focused on inflation being under control or worried about deflation with the Yr/Yr [...]

EMU HICP In Large Yr/Yr Drop

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814a.jpg" align="right" border="0" height="265" width="353">Deflation is
much too strong a word to describe all of the pieces of the current
pricing environment, but it appropriately denotes the CPI total and
some of its components. Last month, the CPI matched Consensus
expectations and was unchanged from June. More to the point, versus
June of last year, the 1.9% decline again was the largest since
early-1950. Stripping out food &amp; energy, prices rose an
expected 0.1% which lessened the y/y gain to 1.6%, its least since
early 2004. The 0.4% decline in energy prices reversed a
small piece of the June jump and left them down by more than
one-quarter from the year-ago level. Gasoline prices slipped 0.8%
(-37.3% y/y) after a 17.3% jump during June. Fuel oil prices also
reversed roughly half of their June rise with a 1.1% (-41.8% y/y) drop.
Finally, prices for natural gas &amp; electricity slipped 0.3%
(-11.7% y/y).Food &amp; beverage prices also provided some price
relief with a 0.2% decline which was the fifth this year. That lowered
the y/y increase to 1.0% which was the lowest since late-2002 and down
from the peak 6.1% rate of increase last fall. Recent weakness has been
led by lower dairy prices (-9.7% y/y) and lower fruit &amp;
vegetable (-3.4% y/y) prices. Prices for meats, poultry &amp; fish
also fell by 1.7% y/y while cereals &amp; bakery product prices
rose just 1.2%. The CPI less food &amp; energy also has been well
behaved. The expected 0.1% July increase slowed the y/y gain to 1.6%
which was its least since early-2004. Of some note, however, is that
prices increased at an accelerated 2.1% rate since December of last
year. That's only slightly below the 2.3% rates of increase during the
last two years.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814b.jpg" align="right" border="0" height="265" width="353">
This year, core goods prices indeed
have firmed some. They rose 0.2% last month and at a 3.8% annualized
rate so far this year. That compares with little price change during
the prior three years. Again, higher tobacco prices account for much of
that acceleration. As taxes have been raised, prices jumped 2.2% last
month and so far this year at a 49.8% annual rate. There also has been
modest firming of prices elsewhere. Apparel prices posted a 0.6%
increase and are up at a 3.9% rate this year after price declines which
extend back to 1994 (no typo). Prices for new &amp; used motor
vehicles also seemed to strengthen despite an aggressive marketing
campaign. They rose 0.3% last month and at a 4.1% rate this year. That
compares with price deflation during the last two years. Continuing
weak were prices for household furnishings &amp; operation. They
slipped 0.1% during July and the 0.5% YTD rate of increase about
matches the gain during 2008. The U.S. recession continued to lower
the strength of core services prices. They were
unchanged last month and have risen at just a 1.5% annual rate so far
this year, half that in 2008 and nearly the&nbsp; weakest since
1983. Weakness in the housing market accounts for much of that
moderation. Last month, shelter prices fell 0.2% and they've risen at a
just a 0.6% annual rate so far in 2009. Owners equivalent rent of
primary residences, a measure not equivalent to other house price
measures, dipped slightly during July and have risen at a 1.6% rate so
far this year versus a 2.5% 2008 increase.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090814c.jpg" align="right" border="0" height="265" width="353">
Elsewhere, public
transportation prices posted a 1.9% rebound last month after earlier
declines but they're down at an 8.3% rate this year.&nbsp;Also
firming last month were medical care services prices with a 0.3%
increase and 3.6% YTD gain. Education costs have been firm. They are up
at a 5.5% annual rate this year.The chained CPI, which adjusts for
shifts in consumption patterns, fell 0.2% during July while
year-to-year prices fell 1.9%. Chained prices less food and energy were
roughly unchanged last month for the third month in a row but the YTD
change of 2.2% is up sharply from no change as of the end of last year.
The consumer price data is available in Haver's USECON
database while detailed figures can be found in the CPIDATA
database. &nbsp;
<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/@E8/@E801/@E80101/@E80101.HTM">Consumer
Price Index</a> (%)</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y&nbsp;</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Total&nbsp;</td>
<td>0.0</td>
<td>0.7</td>
<td>-1.9</td>
<td>3.8</td>
<td>2.9</td>
<td>3.2</td>
</tr>
<tr class="even">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.1</td>
<td>0.2</td>
<td>1.6</td>
<td>2.3</td>
<td>2.3</td>
<td>2.5</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>0.2</td>
<td>0.3</td>
<td>1.4</td>
<td>0.1</td>
<td>-0.4</td>
<td>0.2</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>0.0</td>
<td>0.1</td>
<td>1.6</td>
<td>3.1</td>
<td>3.4</td>
<td>3.4</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp; Energy</td>
<td>-0.4</td>
<td>7.4</td>
<td>-28.0</td>
<td>13.5</td>
<td>5.7</td>
<td>11.0</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>-0.2</td>
<td>0.1</td>
<td>1.0</td>
<td>5.4</td>
<td>3.9</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">&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>&nbsp;</td>
<td>0.9</td>
<td>-1.3 </td>
<td>3.3</td>
<td>2.5</td>
<td>2.9 </td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td></td>
<td>0.0</td>
<td>1.3</td>
<td>2.0</td>
<td>2.0</td>
<td>2.2</td>
</tr>
</tbody>
</table>
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Deflation is much too strong a word to describe all of the pieces of the current pricing environment, but it appropriately denotes the CPI total and some of its components. Last month, the CPI matched Consensus expectations and was [...]

CPI Decline Revisits 1950 As Core Price Gain Slows To Smallest Since 2004

CPI Decline Revisits 1950 As CorePrice Gain Slows To Smallest Since 2004

Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813j.jpg" width="353">
Business inventories have continued to fall sharply through June, and at all three levels of distribution, manufacturing, wholesale and retail. Total inventories were off 1.1% in June alone, following 1.2% in May and 1.3% in April. The level at end-June was down an amazing 9.8% from a year ago. Factory stocks were off 0.8% in the month and 8.5% from June 2008, wholesale was down 1.7% in June and 10.3% on the year and retail 1.1% in June and 10.8% from June 2008.
No small part of this shrinkage is in the auto industry alone. Wholesale and retail motor vehicle and parts stocks together were down 2.4% in June and 21.9% from June 2008. Apart from auto dealers, retail inventories are down on the year by &quot;only&quot; 5.2% and total business stocks by 7.9%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813i.jpg" width="353">
There is a distinctly encouraging note in this report on business inventories and sales for June. Sales rose. They were up 0.9% from May, the first month-on-month increase since July 2008. All three sectors participated in the gain, and total sales excluding the auto industry rose 0.8%. The sales improvement helped bring the inventory/sales ratio down to 1.38 from 1.41 in May, the lowest since last October. The auto industry has contributed to this swing too, but in June, the I/S ratio for non-auto industries fell to 1.33 from 1.35 and was also the lowest figure since October.
Today&#39;s accompanying data on retail sales for July remind us that the sales picture remains fragile, though [see Tom Moeller&#39;s summary of that], so it&#39;s clearly premature to conclude that anything fundamental has shifted in the total sales and inventory picture. But at least this one month looks better, and getting the I/S ratios down more puts the economy another step closer to recovery.
The business sales and inventory data are available in Haver&#39;s USECON database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Business Inventories (%)</th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Total</td>
<td>-1.1</td>
<td>-1.2</td>
<td>-1.3</td>
<td>-9.8</td>
<td>0.6</td>
<td>4.0</td>
<td>6.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Retail</td>
<td>-1.0</td>
<td>-1.7</td>
<td>-1.4</td>
<td>-10.8</td>
<td>-3.1</td>
<td>2.5</td>
<td>3.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Auto</td>
<td>-0.3</td>
<td>-0.7</td>
<td>-0.7</td>
<td>-5.2</td>
<td>-1.8</td>
<td>2.7</td>
<td>4.7</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp; Wholesale</td>
<td>-1.7</td>
<td>-1.2</td>
<td>-1.3</td>
<td>-10.3</td>
<td>3.1</td>
<td>6.2</td>
<td>8.2</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-0.8</td>
<td>-0.8</td>
<td>-1.2</td>
<td>-8.5</td>
<td>2.1</td>
<td>3.7</td>
<td>8.2</td>
</tr>
</tbody>
</table>
</body>
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Business inventories have continued to fall sharply through June, and at all three levels of distribution, manufacturing, wholesale and retail. Total inventories were off 1.1% in June alone, following 1.2% in May and 1.3% in April. [...]

U.S. Business Inventories Still Being Cut Sharply through June

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813f.jpg" align="right" border="0">
U.S. import prices last month declined a slightly
more-than-expected 0.7%. Prices have fallen sharply since last year due
to lower oil prices, the firmer dollar and the global economic
recession.
The recent gain in petroleum prices took a breather last month
and fell 2.8% after four consecutive months of double-digit increase.
This month, however, crude oil prices have more than reversed the
earlier decline with a rise to an average $71.75 per barrel.
Non-oil import prices reversed course last month with a 0.2%
decline and since March prices have been roughly unchanged. This
stability compares to three-month price declines of 3.5% as recently as
this past January. (During the last ten years, there has been a
negative 81% correlation between the nominal trade-weighted exchange
value of the US dollar vs. major currencies and the y/y change in
non-oil import prices.)
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813g.jpg" align="right" border="0">
Food prices took an about face last month with a 0.8% decline
(-7.3% y/y) that reversed the gains during the prior two months. Prices
for nonauto consumer goods fell 0.4% (-1.2% y/y). Durable consumer
goods prices fell 0.3% (-1.6% y/y) as household goods fell and home
entertainment equipment prices also were down by 1.4% y/y. Apparel
prices reversed earlier stability and continued down with a 0.5% flop
(-0.6% y/y).
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813h.jpg" align="right" border="0">
Capital goods import prices during July increased a modest
0.2% (-1.5% y/y) after little change during the prior three months.
Excluding computers, capital goods prices rose 0.2% but they're still
down 0.3% y/y. Prices of computers, peripherals &amp; accessories
inched up 0.3% but they're down 4.8% during the last year.
Total export prices reversed some of their earlier
strengthening with a 0.3% decline. The latest overall drop was led by a
4.9% (-22.3% y/y) decline in agricultural prices which reversed all of
the June increase. Nonagricultural export prices firmed again and
posted a 0.2% uptick but they're still down 6.5% y/y.

<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/@E8/@E807/@E807.HTM">Import/Export
Prices (NSA, %)</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>-0.7</td>
<td>2.6</td>
<td>-19.3</td>
<td>11.5</td>
<td>4.2</td>
<td>4.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>-2.8</td>
<td>16.2</td>
<td>-49.9</td>
<td>37.7</td>
<td>11.6</td>
<td>20.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonpetroleum</td>
<td>-0.2</td>
<td>0.2</td>
<td>-7.3</td>
<td>5.3</td>
<td>2.7</td>
<td>1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Export - All Commodities</td>
<td>-0.3</td>
<td>1.0</td>
<td>-8.1</td>
<td>6.0</td>
<td>4.9</td>
<td>3.6</td>
</tr>
</tbody>
</table>
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U.S. import prices last month declined a slightly more-than-expected 0.7%. Prices have fallen sharply since last year due to lower oil prices, the firmer dollar and the global economic recession. The recent gain in petroleum prices [...]

U.S. Import Prices Decline With Drop In Oil And Other Prices

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813d.jpg" width="353">
The latest figures from the Labor Department indicate that initial claims for unemployment insurance increased slightly to 558,000 last week after an upwardly revised 554,000 during the prior week. For all of July, claims fell 9.3% from June but since the beginning of the month they moved sideways. The four-week moving average of claims, which smoothes out some of the volatility in the weekly numbers, ticked up to 565,000 but was still near its lowest level since late-January. A decline in weekly claims to 545,000 had been expected.
The Labor Department indicated that the largest increases in initial claims for the week ending Aug. 1 were in Alabama (+721, 58.4% y/y), Washington (+692, 47.6% y/y), Nebraska (+306, 40.4% y/y), Kentucky (+247, 46.9% y/y), and Delaware (+157, 43.0% y/y), while the largest decreases were in California (-7,258, -16.4% y/y), Michigan (-7,031, -20.9% y/y), Tennessee (-4,391, +30.9% y/y), Florida (-3,358, -6.1% y/y), and Georgia (-2,538, +19.8% y/y).
The lower level of initial claims has been accompanied by lower continuing claims for unemployment insurance which probably owes partly to the exhaustion of benefits. For the latest week, they declined 141,000 and since their peak last month they&#39;ve fallen 702,000 or 10.2%. Continuing claims provide an indication of workers&#39; ability to find employment and the level of 6,202,000 claims is up sharply from the year-ago level. The four-week average of continuing claims fell back to 6,259,250 and that was the lowest since late-April. The series dates back to 1966.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813e.jpg" width="353">
The insured rate of unemployment remained at 4.7% which was the lowest level since mid-April. During the last ten years, there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics.
The highest insured unemployment rates in the week ending July 25 were in Michigan (6.8 percent), Puerto Rico (6.7), Oregon (6.3), Pennsylvania (6.2), Nevada (6.0), Wisconsin (5.6), Connecticut (5.5), California (5.4), New Jersey (5.4), and Illinois (5.3). The lowest rates were in South Dakota (1.4) and North Dakota (1.6), Virginia (2.5), Wyoming (3.0), Texas (3.0), Maine (3.2), Colorado (3.4), Maryland (3.6), Minnesota (3.7), Florida (4.3), Mississippi (4.3), New York (4.4) and Georgia (4.3).
The unemployment insurance claims data is available in Haver&#39;s WEEKLY database and the state data is in the REGIONW database.

<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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">08/07/09</th>
<th scope="col">07/31/09</th>
<th scope="col">07/24/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>558</td>
<td>554</td>
<td>589</td>
<td>26.8%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,202</td>
<td>6,343</td>
<td>82.6%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.7</td>
<td>4.8</td>
<td>2.5</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body>
</html>

The latest figures from the Labor Department indicate that initial claims for unemployment insurance increased slightly to 558,000 last week after an upwardly revised 554,000 during the prior week. For all of July, claims fell 9.3% [...]

U.S. Weekly Claims for Unemployment Insurance Rise Unexpectedly but the Trend Is Still Down

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

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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), 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

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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**.

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- 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

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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.

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- 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: August 2009

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