Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080715d.jpg" width="353">
U.S. retail sales during June inched up just 0.1% after having risen a downwardly revised 0.8% in May. On a three-month basis overall retail sales rose at a 4.5% annual rate. The latest rise fell short of Consensus expectations for a 0.4% increase.
Sales of motor vehicles &amp; parts fell another 3.6% (-10.5% y/y) and they are down at a 27.0% annual rate during the last three months. The decline accompanied a 4.6% (-13.1% y/y) drop in unit motor vehicle sales last month.
Retail sales excluding autos rose 0.8% and the strong 1.2% rise in May was unrevised, boosted recently by receipts of the government&#39;s tax rebate checks. The latest increase was double Consensus expectations for a 0.4% rise, but a 4.6% (24.5% y/y) increase in sales at gasoline service stations accounted for much of the strength.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080715e.jpg" width="353">
Less gasoline &amp; autos retail sales inched up just 0.2% (3.6% y/y) which was the weakest increase since February. Nevertheless, on a three-month basis these sales still were strong and surged at an 8.8% annual rate during the last three months.
Folks attempted to avoid the higher gas prices by purchasing online. June sales of nonstore retailers (internet &amp; catalogue) rose 0.8% (8.1% y/y) following downwardly revised, but still strong, gains which exceeded 1.0% during the prior three months.
Sales at general merchandise stores rose 0.4% (5.6% y/y) following the 1.3% pop in May. Sales offurniture, home furnishings &amp; appliance, however, reversed all of the upwardly revised May surge of 1.0% (-0.1% y/y). Sales of furniture &amp; home furnishings declined 1.4% (-5.4% y/y). Apparel store sales rose 0.6% (2.9% y/y), about the same as they did during the prior three months.
Building materials &amp; garden equipment sales fell 0.9% (+1.5%% y/y) after gains which exceeded 2.0% during the prior two months.
Released yesterday, the Federal Reserve Board&#39;s final rule for home mortgage loans to better protect consumers and facilitate responsible lending can be found <a href="http://www.federalreserve.gov/newsevents/press/bcreg/20080714a.htm"> here</a>.
Doom &amp; Gloom in the Housing Markets: The Sequel from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/net/20080501/netpub.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a></td>
<td>0.1%</td>
<td>0.8%</td>
<td>3.0%</td>
<td>4.0%</td>
<td>5.8%</td>
<td>6.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>0.8%</td>
<td>1.2%</td>
<td>6.2%</td>
<td>4.5%</td>
<td>6.8%</td>
<td>7.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Less Gasoline</td>
<td>0.2%</td>
<td>0.8%</td>
<td>3.6%</td>
<td>4.1%</td>
<td>6.2%</td>
<td>6.4%</td>
</tr>
</tbody>
</table>


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U.S. retail sales during June inched up just 0.1% after having risen a downwardly revised 0.8% in May. On a three-month basis overall retail sales rose at a 4.5% annual rate. The latest rise fell short of Consensus expectations for a [...]

U.S. Retail Sales Rose Just Slightly in June

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080715a.jpg" width="353">
U.S. finished producer prices jumped another 1.8% during June after the 1.4% surge during May. The increase surpassed Consensus expectations for a 1.3% rise.
Finished energy prices led the increase with a 6.0% pop as gasoline prices surged another 9.0% (39.7% y/y). Natural gas prices continued strong and surged 6.6% (17.6% y/y). Residential electric power costs rose 0.8% (4.7% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080715b.jpg" width="353">
Finished consumer food prices surged by 1.5% (8.4% y/y), double the May increase. The strength continued to be led by fresh vegetables (34.0% y/y) and pasta products (37.3% y/y).
Less food &amp; energy, the gain in finished goods prices rose the same 0.2% as they did during May. The latest figure fell slightly short of expectations for a 0.3% rise. Prices of core finished consumer goods rose the same 0.3% (3.5% y/y) as they did in May and the three-month rate of rise remained down somewhat at 4.2%. Durable consumer goods prices rose 0.3% (1.6% y/y) after the 0.4% May fall. Capital equipment prices gained 0.3% (2.4% y/y).<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080715c.jpg" width="353">
Intermediate goods prices surged yet again, last month by 2.1%. Excluding food &amp; energy these prices jumped another 1.3%.
The crude materials PPI surged 3.7% due to a 5.4% (72.1% y/y) jump in energy prices. Crude food prices also doubled their May strength and surged 3.5% (20.8% y/y). Less food &amp; energy crude prices fell 0.2%.
Back to the Future with Keynes from the Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/research/QR/QR3212.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E802/@E80201/@E80201.HTM">Producer Price Index</a> (%)</th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>1.8</td>
<td>1.4</td>
<td>9.1</td>
<td>3.9</td>
<td>3.0</td>
<td>&nbsp;4.9&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.2</td>
<td>0.2</td>
<td>3.1</td>
<td>1.9</td>
<td>1.5</td>
<td>2.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>2.1</td>
<td>2.9</td>
<td>12.5</td>
<td>4.1</td>
<td>6.4</td>
<td>&nbsp;8.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>1.3</td>
<td>2.0</td>
<td>8.4</td>
<td>2.8</td>
<td>6.0</td>
<td>&nbsp;5.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>3.7</td>
<td>6.7</td>
<td>45.7</td>
<td>12.1</td>
<td>1.4</td>
<td>14.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>-0.2</td>
<td>5.0</td>
<td>&nbsp;33.2</td>
<td>15.7</td>
<td>20.8</td>
<td>4.9</td>
</tr>
</tbody>
</table>
</body>
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U.S. finished producer prices jumped another 1.8% during June after the 1.4% surge during May. The increase surpassed Consensus expectations for a 1.3% rise. Finished energy prices led the increase with a 6.0% pop as gasoline prices [...]

U.S. PPI Surged Again

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080714b.jpg" align="left" border="0" height="265" width="353">
You can like Mervyn King, Governor of the BOE, and BOE itself.
But that bank has lost its grip on inflation, at the PPI level and that
is chilling. PPI inflation has absolutely surged sending the CORE PPI
rate up by 6.3% Yr/Yr and the three month core rate to 11.8% in arise
reminiscent of the 1970s bell-bottoms and Carnaby Street &#8211; all that
along with its destructive episode of inflation. Of course the RPC/HICP
inflation measures are more important ones, but these sorts of
pressures at the factory gate level spell bad news for inflation
elsewhere in the economy. PPI headline inflation is bristling at a 10%
paces and over three-months UK headline inflation is over 17% for the
PPI. All that is very bad news indeed.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080714c.jpg" align="right" border="0" height="265" width="353">
The second chart shows that the core HICP inflation rate has
remained much more stable in the face of rising oil prices and even the
rising PPI results. Still, there have been several step ups in the HICP
pace and right now there is the threat of an acceleration that may be
taking root.

As is the case in the US there is more pressure at the PPI
level than at the consumer prices level in the UK. UK the core PPI
inflation has a correlation with the core HICP of only 0.25, in
R-square terms that is only 0.06 &#8211; a very low association.

The BOE may be able to keep this wolf at bay. But what is
shocking for the moment at least is the degree of pressure that is
being mounted on the PPI. If only a fraction of it gets into the HICP
it will be too much. With this report in hand and with PPI data more
topical by a full two months (June for the PPI Vs April for the HICP)
inflation trends at the consumer level will be under the microscope in
the UK.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">UK PPI
</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%m/m</td>
<td colspan="4">%-SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jun-08</td>
<td>May-08</td>
<td>Apr-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-moY-Ago</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.9%</td>
<td>1.8%</td>
<td>1.3%</td>
<td>17.2%</td>
<td>13.6%</td>
<td>10.0%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">Core</td>
<td>0.3%</td>
<td>1.4%</td>
<td>1.1%</td>
<td>11.8%</td>
<td>9.6%</td>
<td>6.3%</td>
<td>2.0%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Core: ex
food beverages, tobacco
&amp; Petroleum</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body></html>

You can like Mervyn King, Governor of the BOE, and BOE itself. But that bank has lost its grip on inflation, at the PPI level and that is chilling. PPI inflation has absolutely surged sending the CORE PPI rate up by 6.3% Yr/Yr and the [...]

UK Losses Grip on PPI Inflation

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080714a.jpg" align="left" border="0" height="265" width="353">
Even capital goods output trends in Europe are begging to look
strained. Manufacturing IP is in its first decline since May of 2005 on
a Yr/Yr basis. The month-to-month 1.4% output drop is the largest since
Sept 2007. The drop is spread liberally across EMU members especially
large countries including German where output is off for three-months
in a row. France, Italy, Spain and the UK each have MFG output lower
yr/yr; in Germany it is still up but only by 0.9%.

In the current quarter MFG IP is dropping at a 3.3% annual
rate. Consumer goods output is off sharply. Intermediate goods output
in falling. Capital goods output is still rising in Q2 at a thin 0.6%
annual rate.

The euro currency seems to be doing some backtracking. Not
only has the &#8216;rescue package for Fannie Mae and Freddie Mac, two large
US &#8216;GSEs,&#8217; (Government sponsored enterprises) helped to buoy the dollar
but so has this news of encroaching weakness in Europe. Europe has been
in denial about its weakness (with a few exceptions) for some time.
Part of this has been due to a need to show a common front in backing
the ECB. Admitting that the wheels were coming of the economy would
have been no way to support the ECB in its plan to hike rates.

But with that done talk has turned quickly to how that hike
could be undone. Bill Gross of PIMCO, a long term dollar bear, has
changed his mind. Several high profile Wall Street strategists who had
recommended US companies with large foreign sales have thrown in the
towel as not only did that strategy not work it seems to have fewer
prospects to work with going forward. Europe is weakening and reality
is dawning slowing on a broad front with today&#8217;s report.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">Euro Area
Manufacturing IP </th>
</tr>
</thead>
<tbody>
<tr class="grey2">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Ezone Detail</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>Mar 
08</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-2- 
Date</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>-1.4%</td>
<td>0.5%</td>
<td>-0.7%</td>
<td>-6.4%</td>
<td>-0.7%</td>
<td>-0.7%</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>2.9%</td>
<td>-3.3%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-1.8%</td>
<td>0.7%</td>
<td>-0.9%</td>
<td>-7.6%</td>
<td>-2.8%</td>
<td>-3.3%</td>
<td>-1.3%</td>
<td>-2.9%</td>
<td>0.4%</td>
<td>-4.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-3.3%</td>
<td>1.9%</td>
<td>-2.0%</td>
<td>-12.6%</td>
<td>-0.5%</td>
<td>-3.7%</td>
<td>-1.2%</td>
<td>-5.0%</td>
<td>1.0%</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Consumer Non-Durables</td>
<td>-1.2%</td>
<td>0.0%</td>
<td>-0.6%</td>
<td>-6.9%</td>
<td>-3.8%</td>
<td>-3.2%</td>
<td>-1.4%</td>
<td>-2.5%</td>
<td>-0.1%</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Intermediate</td>
<td>-1.4%</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>-6.1%</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>0.7%</td>
<td>-0.4%</td>
<td>2.5%</td>
<td>-2.9%</td>
</tr>
<tr>
<td class="firstcol">Capital</td>
<td>-2.4%</td>
<td>2.4%</td>
<td>-1.7%</td>
<td>-6.9%</td>
<td>4.2%</td>
<td>0.9%</td>
<td>5.4%</td>
<td>2.6%</td>
<td>7.6%</td>
<td>0.6%</td>
</tr>
<tr class="grey2">
<td colspan="11" class="firstcol">Main
Euro Area Countries
and UK IP in MFG</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG Only</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>Mar 
08</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-2- 
Date</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>-2.6%</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>-12.2%</td>
<td>-2.2%</td>
<td>-1.9%</td>
<td>3.0%</td>
<td>0.9%</td>
<td>5.5%</td>
<td>-8.3%</td>
</tr>
<tr>
<td class="firstcol">France: IP excl Construction</td>
<td>-2.6%</td>
<td>1.5%</td>
<td>-1.1%</td>
<td>-8.8%</td>
<td>3.5%</td>
<td>-1.7%</td>
<td>0.4%</td>
<td>-1.2%</td>
<td>3.1%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-1.5%</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>-5.3%</td>
<td>0.4%</td>
<td>0.9%</td>
<td>1.0%</td>
<td>-2.7%</td>
<td>-0.5%</td>
<td>-2.6%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>-14.6%</td>
<td>27.5%</td>
<td>-16.9%</td>
<td>-32.9%</td>
<td>39.8%</td>
<td>-9.5%</td>
<td>11.8%</td>
<td>-7.4%</td>
<td>12.0%</td>
<td>26.7%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>-0.6%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-3.8%</td>
<td>0.0%</td>
<td>-0.8%</td>
<td>0.2%</td>
<td>-0.8%</td>
<td>0.0%</td>
<td>-1.8%</td>
</tr>
</tbody>
</table>
</body></html>

Even capital goods output trends in Europe are begging to look strained. Manufacturing IP is in its first decline since May of 2005 on a Yr/Yr basis. The month-to-month 1.4% output drop is the largest since Sept 2007. The drop is [...]

Euro Area IP Trends Point Lower

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080714a.jpg" align="left" border="0" height="265" width="353">
Even capital goods output trends in Europe are begging to look
strained. Manufacturing IP is in its first decline since May of 2005 on
a Yr/Yr basis. The month-to-month 1.4% output drop is the largest since
Sept 2007. The drop is spread liberally across EMU members especially
large countries including German where output is off for three-months
in a row. France, Italy, Spain and the UK each have MFG output lower
yr/yr; in Germany it is still up but only by 0.9%.

In the current quarter MFG IP is dropping at a 3.3% annual
rate. Consumer goods output is off sharply. Intermediate goods output
in falling. Capital goods output is still rising in Q2 at a thin 0.6%
annual rate.

The euro currency seems to be doing some backtracking. Not
only has the &#8216;rescue package for Fannie Mae and Freddie Mac, two large
US &#8216;GSEs,&#8217; (Government sponsored enterprises) helped to buoy the dollar
but so has this news of encroaching weakness in Europe. Europe has been
in denial about its weakness (with a few exceptions) for some time.
Part of this has been due to a need to show a common front in backing
the ECB. Admitting that the wheels were coming of the economy would
have been no way to support the ECB in its plan to hike rates.

But with that done talk has turned quickly to how that hike
could be undone. Bill Gross of PIMCO, a long term dollar bear, has
changed his mind. Several high profile Wall Street strategists who had
recommended US companies with large foreign sales have thrown in the
towel as not only did that strategy not work it seems to have fewer
prospects to work with going forward. Europe is weakening and reality
is dawning slowing on a broad front with today&#8217;s report.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">Euro Area
Manufacturing IP </th>
</tr>
</thead>
<tbody>
<tr class="grey2">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Ezone Detail</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>Mar 
08</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-2- 
Date</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>-1.4%</td>
<td>0.5%</td>
<td>-0.7%</td>
<td>-6.4%</td>
<td>-0.7%</td>
<td>-0.7%</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>2.9%</td>
<td>-3.3%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-1.8%</td>
<td>0.7%</td>
<td>-0.9%</td>
<td>-7.6%</td>
<td>-2.8%</td>
<td>-3.3%</td>
<td>-1.3%</td>
<td>-2.9%</td>
<td>0.4%</td>
<td>-4.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-3.3%</td>
<td>1.9%</td>
<td>-2.0%</td>
<td>-12.6%</td>
<td>-0.5%</td>
<td>-3.7%</td>
<td>-1.2%</td>
<td>-5.0%</td>
<td>1.0%</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Consumer Non-Durables</td>
<td>-1.2%</td>
<td>0.0%</td>
<td>-0.6%</td>
<td>-6.9%</td>
<td>-3.8%</td>
<td>-3.2%</td>
<td>-1.4%</td>
<td>-2.5%</td>
<td>-0.1%</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Intermediate</td>
<td>-1.4%</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>-6.1%</td>
<td>0.1%</td>
<td>-0.1%</td>
<td>0.7%</td>
<td>-0.4%</td>
<td>2.5%</td>
<td>-2.9%</td>
</tr>
<tr>
<td class="firstcol">Capital</td>
<td>-2.4%</td>
<td>2.4%</td>
<td>-1.7%</td>
<td>-6.9%</td>
<td>4.2%</td>
<td>0.9%</td>
<td>5.4%</td>
<td>2.6%</td>
<td>7.6%</td>
<td>0.6%</td>
</tr>
<tr class="grey2">
<td colspan="11" class="firstcol">Main
Euro Area Countries
and UK IP in MFG</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG Only</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>Mar 
08</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-2- 
Date</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>-2.6%</td>
<td>-0.3%</td>
<td>-0.3%</td>
<td>-12.2%</td>
<td>-2.2%</td>
<td>-1.9%</td>
<td>3.0%</td>
<td>0.9%</td>
<td>5.5%</td>
<td>-8.3%</td>
</tr>
<tr>
<td class="firstcol">France: IP excl Construction</td>
<td>-2.6%</td>
<td>1.5%</td>
<td>-1.1%</td>
<td>-8.8%</td>
<td>3.5%</td>
<td>-1.7%</td>
<td>0.4%</td>
<td>-1.2%</td>
<td>3.1%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-1.5%</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>-5.3%</td>
<td>0.4%</td>
<td>0.9%</td>
<td>1.0%</td>
<td>-2.7%</td>
<td>-0.5%</td>
<td>-2.6%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>-14.6%</td>
<td>27.5%</td>
<td>-16.9%</td>
<td>-32.9%</td>
<td>39.8%</td>
<td>-9.5%</td>
<td>11.8%</td>
<td>-7.4%</td>
<td>12.0%</td>
<td>26.7%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>-0.6%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-3.8%</td>
<td>0.0%</td>
<td>-0.8%</td>
<td>0.2%</td>
<td>-0.8%</td>
<td>0.0%</td>
<td>-1.8%</td>
</tr>
</tbody>
</table>
UK Losses Grip on PPI Inflation 
by <a href="/comment/Brusca.html">Robert
Brusca</a> July 14, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080714b.jpg" align="left" border="0" height="265" width="353">
You can like Mervyn King, Governor of the BOE, and BOE itself.
But that bank has lost its grip on inflation, at the PPI level and that
is chilling. PPI inflation has absolutely surged sending the CORE PPI
rate up by 6.3% Yr/Yr and the three month core rate to 11.8% in arise
reminiscent of the 1970s bell-bottoms and Carnaby Street &#8211; all that
along with its destructive episode of inflation. Of course the RPC/HICP
inflation measures are more important ones, but these sorts of
pressures at the factory gate level spell bad news for inflation
elsewhere in the economy. PPI headline inflation is bristling at a 10%
paces and over three-months UK headline inflation is over 17% for the
PPI. All that is very bad news indeed.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080714c.jpg" align="right" border="0" height="265" width="353">
The second chart shows that the core HICP inflation rate has
remained much more stable in the face of rising oil prices and even the
rising PPI results. Still, there have been several step ups in the HICP
pace and right now there is the threat of an acceleration that may be
taking root.

As is the case in the US there is more pressure at the PPI
level than at the consumer prices level in the UK. UK the core PPI
inflation has a correlation with the core HICP of only 0.25, in
R-square terms that is only 0.06 &#8211; a very low association.

The BOE may be able to keep this wolf at bay. But what is
shocking for the moment at least is the degree of pressure that is
being mounted on the PPI. If only a fraction of it gets into the HICP
it will be too much. With this report in hand and with PPI data more
topical by a full two months (June for the PPI Vs April for the HICP)
inflation trends at the consumer level will be under the microscope in
the UK.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">UK PPI
</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%m/m</td>
<td colspan="4">%-SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jun-08</td>
<td>May-08</td>
<td>Apr-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-moY-Ago</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.9%</td>
<td>1.8%</td>
<td>1.3%</td>
<td>17.2%</td>
<td>13.6%</td>
<td>10.0%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">Core</td>
<td>0.3%</td>
<td>1.4%</td>
<td>1.1%</td>
<td>11.8%</td>
<td>9.6%</td>
<td>6.3%</td>
<td>2.0%</td>
</tr>
<tr>
<td colspan="7" class="firstcol">Core: ex
food beverages, tobacco
&amp; Petroleum</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body></html>

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080711i.jpg" width="353">
The U.S. government ran a budget surplus in June, as it usually does, of $50.7B. In fact, the surplus was double the size it was during the past several years. Based on expectations formed by Public Debt Transactions from the Daily Treasury Statement, the budget surplus beat the Consensus forecast for a $30.0B surplus. These transactions data are available in Haver&#39;s DAILY database.
That, however, is where the good news on the Federal budget front ends. For the first nine months of FY08 the government ran a budget deficit of $268.7B which was more than double the deficit during the first nine months of FY07.
For the fiscal year to date federal receipts fell 0.6% from a year earlier, the first negative comparison since 2003 and it compared to 7.5% y/y growth during the first nine months of FY07. Higher unemployment pulled the growth in individual income tax receipts (44% of total receipts) to a negative 0.8% this year versus 11.5% growth in FY07. Growth in withheld income taxes of 4.8% was roughly half that of a year earlier and non-withheld taxes grew 5.2%, or nearly one third as during the first nine months of FY07.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080711j.jpg" width="353">
Lower corporate profitability provided a further crimp to government revenues. Corporate income taxes (13% of total receipts) declined 7.5% decline from receipts during the first nine months of FY07. During FY07 they rose 10.0% during the first nine months.
Unemployment insurance contributions fell 2.5% FYTD due to negative employment growth but Federal excise taxes rose 5.8%. Estate and gift taxes rose 13.6%.
U.S. net outlays grew 6.6% during the first nine months of FY08. That growth was more than double the outlay growth of FY07&#39;s first nine months. Growth in defense spending (19% of total outlays) led the doubling with a 10.1% gain while growth in transportation spending surged to 7.5% from 1.8% in FY07&#39;s first nine months.
Medicare expenditures (12% of outlays) actually fell 1.8% but health spending (10% of total outlays) held constant at a 5.4% growth rate. Growth in Social Security spending (21% of outlays) also held steady at 5.3% while growth in interest expense also held steady at 4.3%. Growth in outlays for income security (15% of outlays) surged to 17.5% from 4.4%.
The Government&#39;s financial data is 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"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E106021.HTM">US Government Finance</a> &nbsp;</th>
<th scope="col">June</th>
<th scope="col">May</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>$50.73B</td>
<td>-$165.9B</td>
<td>$27.5B (6/07)</td>
<td>-$162.0B</td>
<td>-$248.2B</td>
<td>-$318.7B</td>
</tr>
<tr>
<td class="firstcol">Net Revenues</td>
<td>$259.9</td>
<td>$124.3B</td>
<td>-6.0%</td>
<td>6.7%</td>
<td>11.8%</td>
<td>14.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Outlays</td>
<td>$209.2</td>
<td>$290.2B</td>
<td>-16.0%</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 in June, as it usually does, of $50.7B. In fact, the surplus was double the size it was during the past several years. Based on expectations formed by Public Debt Transactions from the Daily [...]

U.S. June Budget Surplus Up, FYTD Deficit More Than Doubled

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080711g.jpg" width="353">
The University of Michigan&#39;s index of consumer sentiment in early July ticked up 0.4% versus the June average to a level of 56.6. The rise beat Consensus expectations for a slight decline. Nevertheless the level of sentiment remained near the lowest level since 1980.
During the last ten years there has been a 47% correlation between the level of sentiment and the three month change in real consumer spending.
The current conditions index improved 2.8% (-33.5% y/y) but that made up just a sliver of the recent monthly declines. The rise was due to a sharp increase in the index of whether now is a good time to buy large household goods to the highest level since March (-26.9% y/y). The view of current personal finances fell yet again (-44.3% y/y).
The expectations component of overall sentiment fell another 1.8% as the index fell to its lowest level since 1980. Expectations for personal finances dropped 2.1% (-24.8% y/y) like it did during the prior two months. It was at its lowest level since 1980 while expectations for business conditions during the next five years improved just slightly but remained near the lowest level since 1990.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080711h.jpg" width="353">
The opinion of government policy, which apparently influences economic expectations, gave back its June improvement. It was it&#39;s lowest since 1992 as only 4% of respondents had a favorable opinion of government policy and 52% thought a poor job was being done. An only fair opinion of policy was held by 42% of respondents.
The mean expected rate of inflation during the next twelve months rose back to 6.9%, about equal to its 1981 high. During the next five years the expected inflation rate slipped to 3.8%.
The University of Michigan survey is not seasonally adjusted.The reading is based on telephone interviews with about 500 households at month-end; the mid-month results are based on about 300 interviews. The summary indexes are in Haver&#39;s USECON database, with details in the proprietary UMSCA database.
Has the Behavior of Inflation and Long-Term Inflation Expectations Changed? from the Federal Reserve Bank of Kansas city is available <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/1q08Clark.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/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">July (Prelim.)</th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">July y/y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>56.6</td>
<td>56.4</td>
<td>59.8</td>
<td>-37.4% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>69.5</td>
<td>67.6</td>
<td>73.3</td>
<td>-33.5%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>48.3</td>
<td>49.2</td>
<td>51.1</td>
<td>-40.7%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
</body>
</html>

The University of Michigan's index of consumer sentiment in early July ticked up 0.4% versus the June average to a level of 56.6. The rise beat Consensus expectations for a slight decline. Nevertheless the level of sentiment remained [...]

Michigan Consumer Sentiment Up Slightly

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

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

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

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

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

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

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

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

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

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

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251107I5.jpg

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

U.S. Consumer Credit Strengthens in September

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Germany

German Trade Surplus Shrinks Despite Strong Exports

Andrew Cates

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

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

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

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

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

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

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

Charts of the Week: Uneven But Unbroken

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

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

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

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

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

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

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

Economy in Brief: 2008

Jump to:

U.S. Retail Sales Rose Just Slightly in June

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Euro Area IP Trends Point Lower

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