Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215a.jpg" width="353">
The consumer price index (CPI-U) fell 0.6% last month, posting the largest m/m decline since a 0.8% drop in July of 1949. Sharply lower gasoline prices and tame &quot;core&quot; goods prices caused the figure to exceed Consensus expectations for a 0.4% fall.
Prices less food &amp; energy rose 0.2% in November and matched Consensus expectations. Core goods prices fell 0.1%, mostly due to a large 1.6% (NSA, -15.5% y/y) decline in computer &amp; peripheral equipment prices. New &amp; used vehicle prices also fell by 0.3% but it was due mostly to a 0.9% drop in used vehicle prices.
Pricing of many other goods was fairly firm. A 0.7% gain in furniture &amp; bedding offset a 0.6% decline in appliance prices. Medical care commodity prices rose 0.6% (3.3% y/y) while educational books &amp; supplies also rose 0.6% (5.4% y/y). Apparel prices rose 0.2% (-1.2% y/y) and tobacco prices rose 0.4% (6.1% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215b.jpg" width="353">
Core services prices increased 0.4% reflecting price gains of 0.6% (4.8% y/y) for medical care and 0.6% (6.2% y/y) for school tuition &amp; fees. Shelter prices rose 0.3% (2.5% y/y) but public transportation prices were unchanged (5.9% y/y).
Energy prices fell 8.0% due to a 16.0% decline in gasoline prices to an average $2.26 per gallon (+16.1% y/y). Gasoline prices have fallen further in December to an average $2.17 while fuel oil prices also fell last month by 4.3% (+24.1% y/y. The bugger was a 2.1% rise in piped gas &amp; electricity prices (19.8% y/y). A surprising 0.5% m/m decline (36.2% y/y) in natural gas prices will not likely be repeated given the rise in gas prices to record heights this month. Electricity prices rose 3.8% (11.3% y/y) in November.
The chained CPI which adjusts for shifts in the mix of consumer purchases fell 0.5% and less food &amp; energy chain prices rose 0.3%.
Trend Inflation, Firm-Specific Capital, and Sticky Prices from the Federal Reserve Bank of Richmond can be found <a href="http://www.richmondfed.org/publications/economic_research/economic_quarterly/pdfs/fall2005/hornstein_wolman.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/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> </th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>-0.6%</td>
<td>0.2%</td>
<td>3.5%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.1%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.4%</td>
<td>0.3%</td>
<td>2.9%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-8.0%</td>
<td>-0.2%</td>
<td>18.1%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.3%</td>
<td>0.3%</td>
<td>2.2%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a> </td>
<td>-0.5%</td>
<td>0.3%</td>
<td>2.8%</td>
<td>2.3%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.0%</td>
<td>0.4%</td>
<td>1.7%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

The consumer price index (CPI-U) fell 0.6% last month, posting the largest m/m decline since a 0.8% drop in July of 1949. Sharply lower gasoline prices and tame "core" goods prices caused the figure to exceed Consensus expectations [...]

CPI Decline Largest Since 1949; Core Inflation Steady

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215a.jpg" width="353">
The consumer price index (CPI-U) fell 0.6% last month, posting the largest m/m decline since a 0.8% drop in July of 1949. Sharply lower gasoline prices and tame &quot;core&quot; goods prices caused the figure to exceed Consensus expectations for a 0.4% fall.
Prices less food &amp; energy rose 0.2% in November and matched Consensus expectations. Core goods prices fell 0.1%, mostly due to a large 1.6% (NSA, -15.5% y/y) decline in computer &amp; peripheral equipment prices. New &amp; used vehicle prices also fell by 0.3% but it was due mostly to a 0.9% drop in used vehicle prices.
Pricing of many other goods was fairly firm. A 0.7% gain in furniture &amp; bedding offset a 0.6% decline in appliance prices. Medical care commodity prices rose 0.6% (3.3% y/y) while educational books &amp; supplies also rose 0.6% (5.4% y/y). Apparel prices rose 0.2% (-1.2% y/y) and tobacco prices rose 0.4% (6.1% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215b.jpg" width="353">
Core services prices increased 0.4% reflecting price gains of 0.6% (4.8% y/y) for medical care and 0.6% (6.2% y/y) for school tuition &amp; fees. Shelter prices rose 0.3% (2.5% y/y) but public transportation prices were unchanged (5.9% y/y).
Energy prices fell 8.0% due to a 16.0% decline in gasoline prices to an average $2.26 per gallon (+16.1% y/y). Gasoline prices have fallen further in December to an average $2.17 while fuel oil prices also fell last month by 4.3% (+24.1% y/y. The bugger was a 2.1% rise in piped gas &amp; electricity prices (19.8% y/y). A surprising 0.5% m/m decline (36.2% y/y) in natural gas prices will not likely be repeated given the rise in gas prices to record heights this month. Electricity prices rose 3.8% (11.3% y/y) in November.
The chained CPI which adjusts for shifts in the mix of consumer purchases fell 0.5% and less food &amp; energy chain prices rose 0.3%.
Trend Inflation, Firm-Specific Capital, and Sticky Prices from the Federal Reserve Bank of Richmond can be found <a href="http://www.richmondfed.org/publications/economic_research/economic_quarterly/pdfs/fall2005/hornstein_wolman.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/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> </th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>-0.6%</td>
<td>0.2%</td>
<td>3.5%</td>
<td>2.7%</td>
<td>2.3%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.2%</td>
<td>0.2%</td>
<td>2.1%</td>
<td>1.8%</td>
<td>1.5%</td>
<td>2.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>0.1%</td>
<td>-0.9%</td>
<td>-2.0%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services less Energy</td>
<td>0.4%</td>
<td>0.3%</td>
<td>2.9%</td>
<td>2.8%</td>
<td>2.9%</td>
<td>3.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Energy</td>
<td>-8.0%</td>
<td>-0.2%</td>
<td>18.1%</td>
<td>10.9%</td>
<td>12.2%</td>
<td>-5.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Food</td>
<td>0.3%</td>
<td>0.3%</td>
<td>2.2%</td>
<td>3.4%</td>
<td>2.1%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM">Chained CPI: Total (NSA)</a> </td>
<td>-0.5%</td>
<td>0.3%</td>
<td>2.8%</td>
<td>2.3%</td>
<td>2.0%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy</td>
<td>0.0%</td>
<td>0.4%</td>
<td>1.7%</td>
<td>1.5%</td>
<td>1.1%</td>
<td>1.9%</td>
</tr>
</tbody>
</table>
Industrial Output Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 15, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215d.jpg" width="353">
A surprising 4.8% jump in mining output pushed the gain in overall industrial output last month to 0.7% and that exceeded Consensus expectations for a 0.5% rise.
Factory sector production rose a moderate 0.4% (4.1% y/y) on the heels of the 1.9% spike in October which followed curtailments due to hurricanes.
Higher output of business equipment again led the strength in factory output. A 0.9% (10.4% y/y) increase last month reflected strong gains in transit equipment (12.8% y/y), information processing equipment (19.4% y/y) and industrial &amp; other (5.0% y/y). Excluding the high tech sector altogether, factory output gained 0.1% (2.5% y/y).
Consumer goods output fell by 0.8% (+1.4% y/y) led by a 5.2% decline (+0.2% y/y) fall in automotive products. Output of appliances, furniture &amp; carpeting also fell hard by 1.6% (+2.0% y/y) but output of computers, video &amp; audio equipment output rose 4.2% (2.4% y/y). Nondurables output inched up 0.1% with apparel output up 0.8% (-2.6% y/y).
Total capacity utilization rose to 80.2% and capacity grew 1.6% y/y. Factory sector utilization rose to 79.4% while capacity rose 2.1% y/y.

<table border="0" cellspacing="0" width="100%">

</table>
<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/@EA/@EA.HTM">Production &amp; Capacity</a></th>
<th scope="col">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial Production</td>
<td>0.7%</td>
<td>1.2%</td>
<td>2.8%</td>
<td>4.1%</td>
<td>0.6%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Goods</td>
<td>-0.8%</td>
<td>-0.2%</td>
<td>1.4%</td>
<td>2.1%</td>
<td>1.0%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Business Equipment</td>
<td>0.9%</td>
<td>7.4%</td>
<td>10.4%</td>
<td>9.3%</td>
<td>0.0%</td>
<td>-7.8%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>80.2%</td>
<td>79.8%</td>
<td>79.3% (11/04)</td>
<td>78.6%</td>
<td>75.7%</td>
<td>75.2%</td>
</tr>
</tbody>
</table>
Empire State Index Rose Further 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 15, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215e.jpg" width="353">
The Empire State Index of General Business Conditions in New York&#39;s manufacturing industries rose further in December. The 5.92 point gain to 28.74 followed a 10.7 point increase last month. Consensus expectations had been for a decline to 18.5.
Since the series&#39; inception in 2001 there has been a close 80% correlation between the index level and the three month change in factory sector production.
The new orders index surged 4.3 points to the highest level since August though shipments fell as did the employment index to its lowest level since July.
Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question; it is not a weighted combination of the components.
The index of expectations for business conditions in six months slipped one point after a 14 point jump in November. Expectations for future capital spending also added to a strong gain in November.
The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.
For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click <a href="http://www.newyorkfed.org/research/regional_economy/empiresurvey_overview.html">here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S511/@S511.HTM">Empire State Manufacturing Survey</a> </th>
<th scope="col">Dec</th>
<th scope="col">Nov</th>
<th scope="col">Dec &#39;04 </th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Business Conditions (diffusion index)</td>
<td>28.74</td>
<td>22.82</td>
<td>27.07</td>
<td>15.59</td>
<td>28.76</td>
<td>16.17</td>
</tr>
</tbody>
</table>
Initial Claims for Jobless Insurance Inched Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 15, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215c.jpg" width="353">
Initial claims for unemployment insurance inched up 1,000 to 329,000 last week following a little revised 7,000 increase the prior week. Consensus expectations had been for 320,000 claims.
Hurricane related claims dropped to 3,000 and brought the total of the three storms during the last fifteen weeks to 603,000.
The four-week moving average of initial claims rose slightly to 328,750 (-1.9% y/y).
Continuing unemployment insurance claims rose 21,000 following a revised 156,000 decline the prior week which was deeper than initially reported.
The insured rate of unemployment was stable at 2.0%. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">12/10/05</th>
<th scope="col">12/03/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>329</td>
<td>328</td>
<td>2.5%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,606</td>
<td>-5.2%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
Employment Conditions Firm in Netherlands, Sweden & Korea in October, November Data 
by <a href="/comment/Stone.html">Carol Stone</a> December 15, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215f.jpg" width="353">
Three diverse countries which reported their latest labor fore data today, have shown improving trends in the last couple of months. In the Netherlands, Sweden and South Korea, the most current unemployment rates have decreased and employment, while not reaching records, also appears to be on a firm uptrend in each region.
In the Netherlands, employment gained 4,000 in October, following an increase of 33,000 in August and September combined. These data are quoted as 3-month centered moving averages. As shown in the first graph, the first half of 2005 saw a flat pattern for employment, so the recent rise is encouraging even though the level remains well below prior years. The Dutch labor force survey only began in 2000, so there is little history to compare. Unemployment has begun an ever so gradual decline after reaching a high of 6.7% in February and March. Although down only 0.2 percentage point, the improvement looks to be sustainable, since it accompanies rising employment, not the &quot;discouraged worker&quot; syndrome of a shrinking labor force. Indeed, using Excel to calculate a labor force participation rate (those in labor force as a percentage of the sum of the labor force and those not in labor force), we find it at 67.44% in September and October, up from a low of 67.16% in April and the highest so far this year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215g.jpg" width="353">
In Sweden, employment was up in November by 117,500 from a year ago, in data that are not seasonally adjusted; this extends a firming trend that began in May and represents 2.8% growth in the number of people with jobs. The unemployment rate, at 5.0% last month, is up 0.1% from the year-ago amount, but it accompanies a participation rate that is also rising and is the highest in more than 3-1/2 years. So, here, as in Holland, people are not backing off from the labor force, but joining it. Indeed, the labor force is growing at a record rate by far. In the second graph, we show a six-month moving average of year-to-year growth rates. For November this was 2.2%, a record for this 30-year-old survey. It looks impressive together with the employment growth, indicating resilience of the Swedish labor market.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051215h.jpg" width="353">
The situation in South Korea looks a bit different than might be expected. Employment is growing, although not as rapidly as before the currency crisis period of the late 1990s or in the immediate recovery from that in 1999 and 2000. At the same time, a broad industry breakdown into manufacturing and services shows that manufacturing jobs are actually declining and have been all this year, so that the November figure is 107,000 below a year earlier. However, the service sector has been expanding by more than enough to make up for that -- 482,000 over the last 12 months. The unemployment rate has thus been able to come down, reaching 3.5% in November, the lowest since January 2004.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Employment (thous) Unemployment Rate (%)</th>
<th scope="col">Nov 2005</th>
<th scope="col">Oct 2005</th>
<th scope="col">Sept 2005</th>
<th scope="col">Year Ago</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Netherlands*: Employment </td>
<td>--</td>
<td>6,937</td>
<td>6,933</td>
<td>6,914</td>
<td>7,037</td>
<td>7,114</td>
<td>7,125</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>--</td>
<td>6.5</td>
<td>6.5</td>
<td>6.6</td>
<td>6.4</td>
<td>5.3</td>
<td>4.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Sweden**: Employment</td>
<td>4,304</td>
<td>4,238</td>
<td>4,259</td>
<td>4,186</td>
<td>4,213</td>
<td>4,232</td>
<td>4,242</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>5.0</td>
<td>5.6</td>
<td>5.4</td>
<td>4.9</td>
<td>5.5</td>
<td>4.9</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">South Korea***: Employment</td>
<td>23,030</td>
<td>22,914</td>
<td>22,836</td>
<td>22,639</td>
<td>22,557</td>
<td>22,139</td>
<td>22,169</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>3.5</td>
<td>3.9</td>
<td>4.0</td>
<td>3.7</td>
<td>3.7</td>
<td>3.6</td>
<td>3.3</td>
</tr>
</tbody>
</table>
</body>
</html>

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214d.jpg" width="353">
Nearly all segments of Japanese business had better results than they anticipated in the Bank of Japan&#39;s quarterly &quot;TANKAN&quot; Survey. Most notably, the large manufacturing firms, which constitute the closely watched &quot;headline&quot; group, saw their diffusion index gain 2 points from September to +21, the highest since a year ago and comparing favorably to the reading of +18 forecast by those companies last quarter. Large nonmanufacturing companies also saw a better-than-expected outturn, +17, against +16 forecast and a +15 actual in September. These businesses are circumspect about the coming quarter, however, with forecasts for March of +19 for manufacturers, down 2 points, and +17 for nonmanufacturers, a steady reading.
By industry, for large firms in the current survey, the margin of actual results over expectations was favorable in nearly areas; only food production, lumber and electrical machinery failed to beat their own forecasts. Shipbuilding, motor vehicles and paper eased somewhat this quarter from their actual results in Q3, although by less than they had forecast. For nonmanufacturing firms, eight of 11 saw improvement over the Q3 results and six of 11 beat their forecasts for this quarter; one, leasing, just met its forecast, which called for a 3 point rise.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214e.jpg" width="353">
Among medium-sized firms (capital &yen;100 million to under &yen;1,000 million), manufacturers gained to +9, an improvement of 3 points over their forecast and 4 points over their September results. Even so, they too look for a rollback over the winter to +6 for March. Other businesses in the size category didn&#39;t fare as well as forecast, seen in the table below, but conversely, they expected to improve this coming quarter. Small businesses remain mired in recessionary conditions generally, but manufacturers in this segment turned in a respectable +7 for the current quarter, and while still negative, small nonmanufacturing companies experienced much less deterioration than they anticipated.
As we call to your attention frequently, this survey was dramatically reorganized two years ago, most significantly changing the very definition of &quot;size&quot; from employee-based to capital-based. Thus, for example, firms counted as &quot;small&quot; before because they employed fewer than 300 people might now be &quot;large&quot; because they have substantial capital; this is particularly true for high-tech companies. Thus, we continue to separate data for the two periods in the survey in our JAPAN database. However, in G10, where we include some customized series that we calculate, we show a long history for &quot;all firms&quot;, which would not have been affected by the modified size criterion. That series, seen in the second graph, was +5 this quarter, the highest reading since Q1 1992, nearly 14 years ago. This suggests, as discussed here Monday by Louise Curley, that the recent downward revision to GDP growth for Q3 was merely a transitory adjustment and not the start of a significant deterioration in the Japanese economy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J8/@J8.HTM">JAPAN: Business Conditions:</a> &nbsp; % Favorable minus % Unfavorable</th>
December 2005
September 2005
June 2005
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Forecast for Mar</td>
<td>Actual</td>
<td>Forecast for Dec</td>
<td>Actual</td>
<td>Forecast for Sep</td>
<td>Actual</td>
</tr>
<tr>
<td class="firstcol">All Firms</td>
<td>4</td>
<td>5</td>
<td>2</td>
<td>2</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td class="firstcol">Large Firms*</td>
<td>18</td>
<td>19</td>
<td>17</td>
<td>17</td>
<td>16</td>
<td>16</td>
</tr>
<tr>
<td class="firstcol">Manufacturing (&quot;Headline Series&quot;)</td>
<td>19</td>
<td>21</td>
<td>18</td>
<td>19</td>
<td>17</td>
<td>18</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>17</td>
<td>17</td>
<td>16</td>
<td>15</td>
<td>14</td>
<td>15</td>
</tr>
<tr>
<td class="firstcol">Medium-Sized Firms**</td>
<td>5</td>
<td>5</td>
<td>3</td>
<td>2</td>
<td>3</td>
<td>4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>6</td>
<td>9</td>
<td>6</td>
<td>5</td>
<td>6</td>
<td>8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>3</td>
<td>1</td>
<td>2</td>
<td>0</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td class="firstcol">Small Firms***</td>
<td>-4</td>
<td>-2</td>
<td>-5</td>
<td>-6</td>
<td>-7</td>
<td>-7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>6</td>
<td>7</td>
<td>4</td>
<td>3</td>
<td>1</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>-9</td>
<td>-7</td>
<td>-12</td>
<td>-11</td>
<td>-13</td>
<td>-12</td>
</tr>
</tbody>
</table>
</body>
</html>

Nearly all segments of Japanese business had better results than they anticipated in the Bank of Japan's quarterly "TANKAN" Survey. Most notably, the large manufacturing firms, which constitute the closely watched "headline" group, [...]

Japan's "TANKAN" Better than Expected in December

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214c.jpg" width="353">
According to the Mortgage Bankers Association, the total number of mortgage applications plunged last week by 5.7% and erased all of the prior weeks&#39; gain. The drop lowered December 1.0% below November.
Purchase applications reversed virtually all of the prior week&#39;s rise with a 3.5% decline although increases through much of last month left the average in December 2.9% above November.
Applications to refinance slid 9.7% w/w and the December average is 7.5% below November.
The effective interest rate on a conventional 30-year mortgage slipped to 6.53% from 6.58% the prior week. Rates averaged 6.52% in November and averaged 5.81% in June. The effective rate on a 15-year mortgage also fell to 6.15%. The interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">12/09/05</th>
<th scope="col">12/02/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>619.3</td>
<td>656.7</td>
<td>-10.1%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>477.9</td>
<td>495.1</td>
<td>-2.2%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,441.8</td>
<td>1,596.4</td>
<td>-22.2%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

According to the Mortgage Bankers Association, the total number of mortgage applications plunged last week by 5.7% and erased all of the prior weeks' gain. The drop lowered December 1.0% below November. Purchase applications reversed [...]

Mortgage Applications Plunged

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214b.jpg" width="353">
The 1.7% decline in import prices last month was three times expectations for a 0.5% drop. The main source of last month&#39;s price weakness was an 8.0% drop in petroleum prices. Crude oil prices fell 6.2% and &quot;other&quot; petroleum prices fell 26.2%.
Last month&#39;s surprise, however, was that excluding petroleum prices fell 0.2% after two months of 0.9% gain. Prices for nonauto consumer goods fell 0.2% (+0.8% y/y) and capital goods prices were unchanged (-0.7% y/y). Excluding another decline in computer prices, capital goods prices also were unchanged (+1.9% y/y).
During the last ten years there has been a 66% (negative) 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. The correlation is a lower 47% against a broader basket of currencies and a lower 57% against the real value of the dollar.
Export prices also were weak. The 0.9% drop was due to a 0.2% (-0.7% y/y) decline in capital goods prices and no change in nonauto consumer goods prices (0.8% 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">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>-1.7%</td>
<td>0.3%</td>
<td>7.0%</td>
<td>5.6%</td>
<td>2.9%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>-8.0%</td>
<td>-1.0%</td>
<td>30.8%</td>
<td>30.5%</td>
<td>21.0%</td>
<td>3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>-0.2%</td>
<td>0.9%</td>
<td>2.6%</td>
<td>2.6%</td>
<td>1.1%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>-0.9%</td>
<td>0.7%</td>
<td>2.4%</td>
<td>3.9%</td>
<td>1.6%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
</body>
</html>

The 1.7% decline in import prices last month was three times expectations for a 0.5% drop. The main source of last month's price weakness was an 8.0% drop in petroleum prices. Crude oil prices fell 6.2% and "other" petroleum prices [...]

Import Prices Fell Broadly

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214a.jpg" width="353">
The October U.S. foreign trade deficit widened to a record $68.9B from a little revised $66.0B in September. Consensus expectations had been for a narrowing to $62.5B.
In the wake of Hurricanes Katrina &amp; Rita imports of petroleum products, notably gasoline, surged 23.3% on top of a 27.9% September jump to a level nearly double last October&#39;s and up nearly four-fold from the 2003 monthly average.
That spike lifted overall imports by 2.7% for the second consecutive month, despite a decline in crude oil prices to $56.29 per bbl. and petroleum prices overall that were roughly flat m/m.
Imports of nonauto consumer goods were strong as well and posted a 1.2% rise (9.7% y/y), goosed additionally by a 3.9% (7.0% y/y) rise in automotive imports. Capital goods imports fell 0.3% (+7.8% y/y) but imports of advanced technology products jumped 4.9% (NSA, 7.7% y/y).
Total exports gained back most of the prior month&#39;s 2.4% collapse with a 1.7% jump. Capital goods exports rose 6.2% (9.8% y/y) with the end of the four-week strike at Boeing Co. that drove exports of civilian aircraft up nearly three-fold m/m (33.1% y/y). Exports of advanced technology products also rose a strong 10.4% (NSA, 6.6% y/y). Exports of capital goods overall rose a strong 6.2% (9.8% y/y) although consumer goods exports fell 5.6% (+5.8% y/y).
Services exports were about flat m/m (+10.4% y/y) as private travel fell 1.8% (+12.5% y/y) though &quot;other&quot; private transportation services rose 1.2% (14.3% y/y).
The US trade deficit with China widened to another record of $20.5B ($161.9B in 2004) due to imports which jumped 4.8% (NSA, 23.9% y/y) though exports surged as well by 22.2% (NSA, 32.7% y/y). The US trade deficit with Japan deepened sharply m/m to $7.4B ($75.6B in 2004) due to a 12.6% (NSA, 6.9% y/y) surge in imports and the monthly trade deficit with the Asian NICs deepened to $1.6B ($21.9B in 2004). The deficit with the European Union deepened sharply to $12.1B ($109.3B in 2004) due to a 13.0% (14.5% y/y) jump in imports.

<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/@EE/@EE03/@EE03.HTM">Foreign Trade</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Trade Deficit</td>
<td>$68.9B</td>
<td>$66.0B</td>
<td>$55.6B (10/04)</td>
<td>$617.6B</td>
<td>$494.8B</td>
<td>$421.2B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Exports - Goods &amp; Services</td>
<td>1.7%</td>
<td>-2.4%</td>
<td>9.2%</td>
<td>12.6%</td>
<td>4.6%</td>
<td>-3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports - Goods &amp; Services</td>
<td>2.7%</td>
<td>2.7%</td>
<td>14.5%</td>
<td>16.6%</td>
<td>8.5%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

The October U.S. foreign trade deficit widened to a record $68.9B from a little revised $66.0B in September. Consensus expectations had been for a narrowing to $62.5B. In the wake of Hurricanes Katrina & Rita imports of petroleum [...]

U.S. Trade Deficit Widened Unexpectedly

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214a.jpg" width="353">
The October U.S. foreign trade deficit widened to a record $68.9B from a little revised $66.0B in September. Consensus expectations had been for a narrowing to $62.5B.
In the wake of Hurricanes Katrina &amp; Rita imports of petroleum products, notably gasoline, surged 23.3% on top of a 27.9% September jump to a level nearly double last October&#39;s and up nearly four-fold from the 2003 monthly average.
That spike lifted overall imports by 2.7% for the second consecutive month, despite a decline in crude oil prices to $56.29 per bbl. and petroleum prices overall that were roughly flat m/m.
Imports of nonauto consumer goods were strong as well and posted a 1.2% rise (9.7% y/y), goosed additionally by a 3.9% (7.0% y/y) rise in automotive imports. Capital goods imports fell 0.3% (+7.8% y/y) but imports of advanced technology products jumped 4.9% (NSA, 7.7% y/y).
Total exports gained back most of the prior month&#39;s 2.4% collapse with a 1.7% jump. Capital goods exports rose 6.2% (9.8% y/y) with the end of the four-week strike at Boeing Co. that drove exports of civilian aircraft up nearly three-fold m/m (33.1% y/y). Exports of advanced technology products also rose a strong 10.4% (NSA, 6.6% y/y). Exports of capital goods overall rose a strong 6.2% (9.8% y/y) although consumer goods exports fell 5.6% (+5.8% y/y).
Services exports were about flat m/m (+10.4% y/y) as private travel fell 1.8% (+12.5% y/y) though &quot;other&quot; private transportation services rose 1.2% (14.3% y/y).
The US trade deficit with China widened to another record of $20.5B ($161.9B in 2004) due to imports which jumped 4.8% (NSA, 23.9% y/y) though exports surged as well by 22.2% (NSA, 32.7% y/y). The US trade deficit with Japan deepened sharply m/m to $7.4B ($75.6B in 2004) due to a 12.6% (NSA, 6.9% y/y) surge in imports and the monthly trade deficit with the Asian NICs deepened to $1.6B ($21.9B in 2004). The deficit with the European Union deepened sharply to $12.1B ($109.3B in 2004) due to a 13.0% (14.5% y/y) jump in imports.

<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/@EE/@EE03/@EE03.HTM">Foreign Trade</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Trade Deficit</td>
<td>$68.9B</td>
<td>$66.0B</td>
<td>$55.6B (10/04)</td>
<td>$617.6B</td>
<td>$494.8B</td>
<td>$421.2B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Exports - Goods &amp; Services</td>
<td>1.7%</td>
<td>-2.4%</td>
<td>9.2%</td>
<td>12.6%</td>
<td>4.6%</td>
<td>-3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports - Goods &amp; Services</td>
<td>2.7%</td>
<td>2.7%</td>
<td>14.5%</td>
<td>16.6%</td>
<td>8.5%</td>
<td>2.1%</td>
</tr>
</tbody>
</table>
Import Prices Fell Broadly 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 14, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214b.jpg" width="353">
The 1.7% decline in import prices last month was three times expectations for a 0.5% drop. The main source of last month&#39;s price weakness was an 8.0% drop in petroleum prices. Crude oil prices fell 6.2% and &quot;other&quot; petroleum prices fell 26.2%.
Last month&#39;s surprise, however, was that excluding petroleum prices fell 0.2% after two months of 0.9% gain. Prices for nonauto consumer goods fell 0.2% (+0.8% y/y) and capital goods prices were unchanged (-0.7% y/y). Excluding another decline in computer prices, capital goods prices also were unchanged (+1.9% y/y).
During the last ten years there has been a 66% (negative) 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. The correlation is a lower 47% against a broader basket of currencies and a lower 57% against the real value of the dollar.
Export prices also were weak. The 0.9% drop was due to a 0.2% (-0.7% y/y) decline in capital goods prices and no change in nonauto consumer goods prices (0.8% 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">Nov</th>
<th scope="col">Oct</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>-1.7%</td>
<td>0.3%</td>
<td>7.0%</td>
<td>5.6%</td>
<td>2.9%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>-8.0%</td>
<td>-1.0%</td>
<td>30.8%</td>
<td>30.5%</td>
<td>21.0%</td>
<td>3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>-0.2%</td>
<td>0.9%</td>
<td>2.6%</td>
<td>2.6%</td>
<td>1.1%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>-0.9%</td>
<td>0.7%</td>
<td>2.4%</td>
<td>3.9%</td>
<td>1.6%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
Mortgage Applications Plunged 
by <a href="/comment/Moeller.html">Tom Moeller</a> December 14, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214c.jpg" width="353">
According to the Mortgage Bankers Association, the total number of mortgage applications plunged last week by 5.7% and erased all of the prior weeks&#39; gain. The drop lowered December 1.0% below November.
Purchase applications reversed virtually all of the prior week&#39;s rise with a 3.5% decline although increases through much of last month left the average in December 2.9% above November.
Applications to refinance slid 9.7% w/w and the December average is 7.5% below November.
The effective interest rate on a conventional 30-year mortgage slipped to 6.53% from 6.58% the prior week. Rates averaged 6.52% in November and averaged 5.81% in June. The effective rate on a 15-year mortgage also fell to 6.15%. The interest rates on 15 and 30 year mortgages are closely correlated (&gt;90%) with the rate on 10 year Treasury securities.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">12/09/05</th>
<th scope="col">12/02/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>619.3</td>
<td>656.7</td>
<td>-10.1%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>477.9</td>
<td>495.1</td>
<td>-2.2%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>1,441.8</td>
<td>1,596.4</td>
<td>-22.2%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
Japan's "TANKAN" Better than Expected in December 
by <a href="/comment/Stone.html">Carol Stone</a> December 14, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214d.jpg" width="353">
Nearly all segments of Japanese business had better results than they anticipated in the Bank of Japan&#39;s quarterly &quot;TANKAN&quot; Survey. Most notably, the large manufacturing firms, which constitute the closely watched &quot;headline&quot; group, saw their diffusion index gain 2 points from September to +21, the highest since a year ago and comparing favorably to the reading of +18 forecast by those companies last quarter. Large nonmanufacturing companies also saw a better-than-expected outturn, +17, against +16 forecast and a +15 actual in September. These businesses are circumspect about the coming quarter, however, with forecasts for March of +19 for manufacturers, down 2 points, and +17 for nonmanufacturers, a steady reading.
By industry, for large firms in the current survey, the margin of actual results over expectations was favorable in nearly areas; only food production, lumber and electrical machinery failed to beat their own forecasts. Shipbuilding, motor vehicles and paper eased somewhat this quarter from their actual results in Q3, although by less than they had forecast. For nonmanufacturing firms, eight of 11 saw improvement over the Q3 results and six of 11 beat their forecasts for this quarter; one, leasing, just met its forecast, which called for a 3 point rise.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051214e.jpg" width="353">
Among medium-sized firms (capital &yen;100 million to under &yen;1,000 million), manufacturers gained to +9, an improvement of 3 points over their forecast and 4 points over their September results. Even so, they too look for a rollback over the winter to +6 for March. Other businesses in the size category didn&#39;t fare as well as forecast, seen in the table below, but conversely, they expected to improve this coming quarter. Small businesses remain mired in recessionary conditions generally, but manufacturers in this segment turned in a respectable +7 for the current quarter, and while still negative, small nonmanufacturing companies experienced much less deterioration than they anticipated.
As we call to your attention frequently, this survey was dramatically reorganized two years ago, most significantly changing the very definition of &quot;size&quot; from employee-based to capital-based. Thus, for example, firms counted as &quot;small&quot; before because they employed fewer than 300 people might now be &quot;large&quot; because they have substantial capital; this is particularly true for high-tech companies. Thus, we continue to separate data for the two periods in the survey in our JAPAN database. However, in G10, where we include some customized series that we calculate, we show a long history for &quot;all firms&quot;, which would not have been affected by the modified size criterion. That series, seen in the second graph, was +5 this quarter, the highest reading since Q1 1992, nearly 14 years ago. This suggests, as discussed here Monday by Louise Curley, that the recent downward revision to GDP growth for Q3 was merely a transitory adjustment and not the start of a significant deterioration in the Japanese economy.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J8/@J8.HTM">JAPAN: Business Conditions:</a> &nbsp; % Favorable minus % Unfavorable</th>
December 2005
September 2005
June 2005
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Forecast for Mar</td>
<td>Actual</td>
<td>Forecast for Dec</td>
<td>Actual</td>
<td>Forecast for Sep</td>
<td>Actual</td>
</tr>
<tr>
<td class="firstcol">All Firms</td>
<td>4</td>
<td>5</td>
<td>2</td>
<td>2</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td class="firstcol">Large Firms*</td>
<td>18</td>
<td>19</td>
<td>17</td>
<td>17</td>
<td>16</td>
<td>16</td>
</tr>
<tr>
<td class="firstcol">Manufacturing (&quot;Headline Series&quot;)</td>
<td>19</td>
<td>21</td>
<td>18</td>
<td>19</td>
<td>17</td>
<td>18</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>17</td>
<td>17</td>
<td>16</td>
<td>15</td>
<td>14</td>
<td>15</td>
</tr>
<tr>
<td class="firstcol">Medium-Sized Firms**</td>
<td>5</td>
<td>5</td>
<td>3</td>
<td>2</td>
<td>3</td>
<td>4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>6</td>
<td>9</td>
<td>6</td>
<td>5</td>
<td>6</td>
<td>8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>3</td>
<td>1</td>
<td>2</td>
<td>0</td>
<td>1</td>
<td>1</td>
</tr>
<tr class="odd">
<td class="firstcol">Small Firms***</td>
<td>-4</td>
<td>-2</td>
<td>-5</td>
<td>-6</td>
<td>-7</td>
<td>-7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>6</td>
<td>7</td>
<td>4</td>
<td>3</td>
<td>1</td>
<td>2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonmanufacturing</td>
<td>-9</td>
<td>-7</td>
<td>-12</td>
<td>-11</td>
<td>-13</td>
<td>-12</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051213d.jpg" width="353">
The ZEW survey of institutional investors and analysts showed a 22.9 point increase in expectations for improvement in the German economy six months ahead. This was the second largest month-to-month increase recorded since the series began in January 1992. The largest increase, 31.5, occurred in July 1993. Relief that the much of the uncertainty arising out of the recent election has abated may have been part of the reason for the increased confidence. But, the strength in exports and increased business investment in the third quarter may also have played a role in the increased confidence. Aided by a weaker Euro--the Euro has declined some 13% since early this year--goods export growth in the third quarter rose to 5.2% compared with 1.0% and 1.8% increases in the second and first quarters of this year. Expenditures on business equipment rose 3.8% in the third quarter compared to increases of 0.6% in the second quarter and 1.6% in the first.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051213e.jpg" width="353">
The respondents to the survey were somewhat less pessimistic about the current economic conditions. Pessimists outweighed optimists by 44.6% in December, down from 55.2% in November and 64.2% in December of a year ago. The continued dissatisfaction with current conditions may be due to the continued sluggishness in the consumer related areas of consumer spending and residential construction. The quarterly increases in consumer spending have been -0.27%, 0.18% and -0.03% in the first, second and third quarters of this year while the corresponding figures for residential construction have been -2.56%, 0.59% and 0.89%.
The ZEW survey also queries its respondents on current conditions and expectations for improvement in the next six months in the economy of the Euro Zone as a whole. Expectations for improvement in the economy six moths ahead in Germany and in the Euro Zone are show in the first chart. Over the past five years expectations for all of the Euro Zone, including Germany, have generally been greater than those for Germany alone. This year expectations for the German economy appear to be improving relative to the Euro Zone as a whole.
In terms of opinions on current conditions in the Euro Zone and Germany, shown in the second chart, the respondents to the ZEW survey are generally more pessimistic about the German economy than for the Euro Zone economy as a whole.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/GERMANY/@D8/@D8.HTM">ZEW Financial Market Survey&nbsp;</a></th>
<th scope="col">Dec 05 &nbsp; % bal</th>
<th scope="col">Nov 05&nbsp; % bal </th>
<th scope="col">Dec 04 &nbsp; % bal</th>
<th scope="col">M/M Dif</th>
<th scope="col">Y/Y Dif</th>
<th scope="col">2005 &nbsp; % bal</th>
<th scope="col">2004 &nbsp; % bal</th>
<th scope="col">2003 &nbsp; %&nbsp;bal</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>-44.4</td>
<td>-55.2</td>
<td>-64.2</td>
<td>10.8</td>
<td>19.8</td>
<td>-61.8</td>
<td>-67.7</td>
<td>-92.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations 6 Months Ahead</td>
<td>61.6</td>
<td>38.7</td>
<td>14.4</td>
<td>22.9</td>
<td>49.2</td>
<td>34.8</td>
<td>44.6</td>
<td>38.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Euro Zone</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Current Conditions</td>
<td>-16.8</td>
<td>-2.55</td>
<td>-30.2</td>
<td>8.7</td>
<td>13.4</td>
<td>-28.7</td>
<td>-41.4</td>
<td>-78.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Expectations 6 Months Ahead</td>
<td>51.2</td>
<td>40.0</td>
<td>17.7</td>
<td>11.2</td>
<td>33.5</td>
<td>32.3</td>
<td>57.1</td>
<td>48.9</td>
</tr>
</tbody>
</table>
</body>
</html>

The ZEW survey of institutional investors and analysts showed a 22.9 point increase in expectations for improvement in the German economy six months ahead. This was the second largest month-to-month increase recorded since the series [...]

Confidence among German Investors and Analysts Rises Sharply: The ZEW Survey

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

A premier time series data platform for the global strategy, research, and quant communities. 

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

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

Charts of the Week: Tariff Truce, Tenuous Trust

250501F20.jpg

250501G20.jpg

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

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

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

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

Imports' 23.5% share of the U.S. light vehicle market was little changed from 23.6% in March and compared to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market held steady at 25.3% last month and compared to 27.7% in April of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.2% last month after falling to 23.3% in March.

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

250501H20.jpg

250501I20.jpg

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

U.S. Light Vehicle Sales Fall in April

250501J5.jpg

250501K5.jpg

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

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

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

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

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

The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

250501L5.jpg

250501M5.jpg

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

U.S. ISM Manufacturing Index Indicates Contraction in April

Winnie Tapasanun

250501N.jpg

250501O.jpg

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

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

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

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

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

250501P.jpg

250501Q.jpg

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

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

250501A8.jpg

250501B8.jpg

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

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

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

Economic conditions vary widely across states and territories.  In the week ended April 12, the highest unemployment rates were in New Jersey (2.39%), California (2.24%), Washington (2.19%), Rhode Island (2.17%) and Massachusetts (1.93%).  The lowest rates were in Florida (0.35%), South Dakota (0.40%), Alabama (0.41%), Virginia (0.45%) and Tennessee (0.48%).  Rates in other notable states include the Illinois (1.85%), New York (1.71%), Pennsylvania (1.54%) and Texas (1.09%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in U**SECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

250501C8.jpg

250501D8.jpg

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

Economy in Brief: December 2005

Jump to:

CPI Decline Largest Since 1949; Core Inflation Steady

CPI Decline Largest Since 1949; Core Inflation Steady

Japan's "TANKAN" Better than Expected in December

Mortgage Applications Plunged

Import Prices Fell Broadly

U.S. Trade Deficit Widened Unexpectedly

U.S. Trade Deficit Widened Unexpectedly

Confidence among German Investors and Analysts Rises Sharply: The ZEW Survey