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/050316d.jpg" width="353">
Housing starts unexpectedly ticked 0.5% higher in February to a record high of 2.195M following an upwardly revised 6.2% increase in January.Consensus expectations had been for a decline to 2.033M starts.
Single-family starts rose 0.3% m/m to a record high of 1.775M and reflected a 4.5% (19.0% y/y) gain in the Northeast. Single family starts in the Midwest also jumped 19.1% (7.3% y/y).
Multi family starts remained on the mend and rose 1.7% m/m after the upwardly revised 20.8% January spike.
Building permits slipped 2.7% reflecting a 10.8% (+13.8% y/y) drop in permits for 5+ units.

<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/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</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</td>
<td>2,195</td>
<td>2,183</td>
<td>15.8%</td>
<td>1,952</td>
<td>1,853</td>
<td>1,7 10</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-family</td>
<td>1,775</td>
<td>1,770</td>
<td>16.7%</td>
<td>1,605</td>
<td>1,505</td>
<td>1,363</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-family</td>
<td>420</td>
<td>413</td>
<td>12.3%</td>
<td>347</td>
<td>348</td>
<td>347</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>2,074</td>
<td>2,132</td>
<td>6.0%</td>
<td>2,035</td>
<td>1,8 89</td>
<td>1,749</td>
</tr>
</tbody>
</table>
</body>
</html>

Housing starts unexpectedly ticked 0.5% higher in February to a record high of 2.195M following an upwardly revised 6.2% increase in January.Consensus expectations had been for a decline to 2.033M starts. Single-family starts rose [...]

Housing Starts Higher in February

<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/050316c.jpg" width="353">
Industrial production rose 0.3% in February following an upwardly revised 0.1% up tick in January. Consensus expectations had been for a 0.4% increase. For the second month utility output fell, by 1.0% after the 2.8% decline in January.
Factory sector output rose 0.5% (4.7% y/y) for the third straight month. High tech sector output rose 1.5% (20.6% y/y) after a 3.2% January increase which was double the initial estimate. Output of communications equipment rose 2.4% (18.6% y/y). Factory output excluding high tech rose 0.5% (3.7% y/y), the strongest monthly gain since October.
Motor vehicle &amp; parts output led the strength last month outside of tech and rose 5.2% (4.5% y/y). Excluding motor vehicles factory output rose just 0.1% (4.7% y/y).
Excluding both high tech and motor vehicles factory output was unchanged last month (3.7% y/y). Output in most industry groups declined. Clothing output fell 1.5% (-7.5% y/y) and paper output slipped 0.2% (+3.5% y/y). Machinery output fell 0.6% (+6.2% y/y) after a strong gain in January but production of appliances, furniture &amp; carpeting rose 0.4% (0.1% y/y).
Total capacity utilization fell slightly to 79.0%. Capacity grew 1.2% 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">Feb</th>
<th scope="col">Jan</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">Industrial Production</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.5%</td>
<td>4.1%</td>
<td>-0.0%</td>
<td>-0.3%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>79.4%</td>
<td>79.2%</td>
<td>77.7% (02/04)</td>
<td>78.1%</td>
<td>75.5%</td>
<td>75.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

Industrial production rose 0.3% in February following an upwardly revised 0.1% up tick in January. Consensus expectations had been for a 0.4% increase. For the second month utility output fell, by 1.0% after the 2.8% decline in [...]

Industrial Production Increase Due To Autos & High Tech

<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/050316b.jpg" width="353">
The US current account deficit deepened in 4Q04 to a record $187.9B. Consensus expectations had been for a deficit of $183.0B. The figure pulled the full year deficit to $665.9B, 5.7% of GDP. 
The deficit in merchandise trade deteriorated to $183.5B from a revised $167.0B in 3Q. Import growth of 5.4% (20.2% y/y) easily surpassed the strength of exports which grew 1.7% (11.6% y/y).
The surplus on services improved slightly to $12.5B from $11.2B in 3Q. The annual surplus of $48.4B in services trade was, however, barely half the peak in 1997 of $89.9B. Exports of services grew 2.6% in 4Q (7.2% y/y and imports rose 1.2% (10.9% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050316a.jpg" width="353">
From the capital account, US foreign direct investment abroad surged to $101.3B, nearly double the 4Q03 level, and foreign direct investment in the US rose 1.3% to $36.3B, more than triple the 4Q03 level. The deficit of $65B pulled the full year deficit to $133B, about the same as during 2003.
Federal Reserve Board Governor Ben S. Bernanke&#39;s speech titled The Global Saving Glut and the U.S. Current Account Deficit can be found <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE01/@EE01.HTM">US Int&#39;l Balance of Payments</a></th>
<th scope="col">4Q &#39;04</th>
<th scope="col">3Q &#39;04</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">Current Account Deficit</td>
<td>$187.9B</td>
<td>$165.9B</td>
<td>$127.0B</td>
<td>$665.9B</td>
<td>$530.7B</td>
<td>$473.9B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Goods/Services/Income Deficit</td>
<td>$168.9B</td>
<td>$151.0B</td>
<td>$109.3B</td>
<td>$593.0B</td>
<td>$463.2B</td>
<td>$414.6B</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Exports</td>
<td>4.6%</td>
<td>2.7%</td>
<td>13.6%</td>
<td>15.3%</td>
<td>5.8%</td>
<td>-3.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imports</td>
<td>6.6%</td>
<td>2.8%</td>
<td>23.3%</td>
<td>18.6%</td>
<td>7.3%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Unilateral Transfers Deficit</td>
<td>$19.0B</td>
<td>$14.9B</td>
<td>$17.6B</td>
<td>$72.9B</td>
<td>$67.4B</td>
<td>$59.4B</td>
</tr>
</tbody>
</table>
</body>
</html>

The US current account deficit deepened in 4Q04 to a record $187.9B. Consensus expectations had been for a deficit of $183.0B. The figure pulled the full year deficit to $665.9B, 5.7% of GDP. The deficit in merchandise trade [...]

U.S. Current Account Deficit Another Record

<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/050316b.jpg" width="353">
The US current account deficit deepened in 4Q04 to a record $187.9B. Consensus expectations had been for a deficit of $183.0B. The figure pulled the full year deficit to $665.9B, 5.7% of GDP. 
The deficit in merchandise trade deteriorated to $183.5B from a revised $167.0B in 3Q. Import growth of 5.4% (20.2% y/y) easily surpassed the strength of exports which grew 1.7% (11.6% y/y).
The surplus on services improved slightly to $12.5B from $11.2B in 3Q. The annual surplus of $48.4B in services trade was, however, barely half the peak in 1997 of $89.9B. Exports of services grew 2.6% in 4Q (7.2% y/y and imports rose 1.2% (10.9% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050316a.jpg" width="353">
From the capital account, US foreign direct investment abroad surged to $101.3B, nearly double the 4Q03 level, and foreign direct investment in the US rose 1.3% to $36.3B, more than triple the 4Q03 level. The deficit of $65B pulled the full year deficit to $133B, about the same as during 2003.
Federal Reserve Board Governor Ben S. Bernanke&#39;s speech titled The Global Saving Glut and the U.S. Current Account Deficit can be found <a href="http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/default.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE01/@EE01.HTM">US Int&#39;l Balance of Payments</a></th>
<th scope="col">4Q &#39;04</th>
<th scope="col">3Q &#39;04</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">Current Account Deficit</td>
<td>$187.9B</td>
<td>$165.9B</td>
<td>$127.0B</td>
<td>$665.9B</td>
<td>$530.7B</td>
<td>$473.9B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Goods/Services/Income Deficit</td>
<td>$168.9B</td>
<td>$151.0B</td>
<td>$109.3B</td>
<td>$593.0B</td>
<td>$463.2B</td>
<td>$414.6B</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Exports</td>
<td>4.6%</td>
<td>2.7%</td>
<td>13.6%</td>
<td>15.3%</td>
<td>5.8%</td>
<td>-3.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imports</td>
<td>6.6%</td>
<td>2.8%</td>
<td>23.3%</td>
<td>18.6%</td>
<td>7.3%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Unilateral Transfers Deficit</td>
<td>$19.0B</td>
<td>$14.9B</td>
<td>$17.6B</td>
<td>$72.9B</td>
<td>$67.4B</td>
<td>$59.4B</td>
</tr>
</tbody>
</table>
Industrial Production Increase Due To Autos & High Tech 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050316c.jpg" width="353">
Industrial production rose 0.3% in February following an upwardly revised 0.1% up tick in January. Consensus expectations had been for a 0.4% increase. For the second month utility output fell, by 1.0% after the 2.8% decline in January.
Factory sector output rose 0.5% (4.7% y/y) for the third straight month. High tech sector output rose 1.5% (20.6% y/y) after a 3.2% January increase which was double the initial estimate. Output of communications equipment rose 2.4% (18.6% y/y). Factory output excluding high tech rose 0.5% (3.7% y/y), the strongest monthly gain since October.
Motor vehicle &amp; parts output led the strength last month outside of tech and rose 5.2% (4.5% y/y). Excluding motor vehicles factory output rose just 0.1% (4.7% y/y).
Excluding both high tech and motor vehicles factory output was unchanged last month (3.7% y/y). Output in most industry groups declined. Clothing output fell 1.5% (-7.5% y/y) and paper output slipped 0.2% (+3.5% y/y). Machinery output fell 0.6% (+6.2% y/y) after a strong gain in January but production of appliances, furniture &amp; carpeting rose 0.4% (0.1% y/y).
Total capacity utilization fell slightly to 79.0%. Capacity grew 1.2% 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">Feb</th>
<th scope="col">Jan</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">Industrial Production</td>
<td>0.3%</td>
<td>0.1%</td>
<td>3.5%</td>
<td>4.1%</td>
<td>-0.0%</td>
<td>-0.3%</td>
</tr>
<tr>
<td class="firstcol">Capacity Utilization</td>
<td>79.4%</td>
<td>79.2%</td>
<td>77.7% (02/04)</td>
<td>78.1%</td>
<td>75.5%</td>
<td>75.3%</td>
</tr>
</tbody>
</table>
Housing Starts Higher in February 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050316d.jpg" width="353">
Housing starts unexpectedly ticked 0.5% higher in February to a record high of 2.195M following an upwardly revised 6.2% increase in January.Consensus expectations had been for a decline to 2.033M starts.
Single-family starts rose 0.3% m/m to a record high of 1.775M and reflected a 4.5% (19.0% y/y) gain in the Northeast. Single family starts in the Midwest also jumped 19.1% (7.3% y/y).
Multi family starts remained on the mend and rose 1.7% m/m after the upwardly revised 20.8% January spike.
Building permits slipped 2.7% reflecting a 10.8% (+13.8% y/y) drop in permits for 5+ units.

<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/@E9/@E901/@E90101/@E90101.HTM">Housing Starts (000s, AR)</a></th>
<th scope="col">Feb</th>
<th scope="col">Jan</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</td>
<td>2,195</td>
<td>2,183</td>
<td>15.8%</td>
<td>1,952</td>
<td>1,853</td>
<td>1,7 10</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-family</td>
<td>1,775</td>
<td>1,770</td>
<td>16.7%</td>
<td>1,605</td>
<td>1,505</td>
<td>1,363</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Multi-family</td>
<td>420</td>
<td>413</td>
<td>12.3%</td>
<td>347</td>
<td>348</td>
<td>347</td>
</tr>
<tr>
<td class="firstcol">Building Permits</td>
<td>2,074</td>
<td>2,132</td>
<td>6.0%</td>
<td>2,035</td>
<td>1,8 89</td>
<td>1,749</td>
</tr>
</tbody>
</table>
NAHB Housing Market Index Stable 
by <a href="/comment/Moeller.html">Tom Moeller</a> March 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050316e.jpg" width="353">
The National Association of Home Builders&#39; (NAHB) Composite Housing Market Index held at 69 in March versus an upwardly revised level in February.
Each of the index components held about at the February levels including the indexes of current and prospective sales which both were up solidly versus last last year.
During the last twenty years, annual changes in the composite index had an 83% correlation with the change in new home sales. There&#39;s been an 86% correlation with the change in single family housing starts.
The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions as good than poor.
Visit the National Association of Home Builders using this <a href="http://www.nahb.org">link</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S4/@S4.HTM">Nat&#39;l Association of Home Builders</a></th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Mar &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Housing Market Index</td>
<td>69</td>
<td>69</td>
<td>66</td>
<td>68</td>
<td>64</td>
<td>61</td>
</tr>
</tbody>
</table>
UK Unemployment Rate Holds to 30-Year Low 
by <a href="/comment/Stone.html">Carol Stone</a> March 16, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050316f.jpg" width="353">
UK labor market data published today show further evidence of strength in the UK economy. The unemployment rate remained steady at 4.7% for the 3 months surrounding December (i.e., November, December and January), the lowest since the third quarter of 1975, nearly 30 years ago. The related &quot;claimant count&quot; was 813,300 in February, the lowest since June 1975.
Employment rose. The labor force measure, the number of people saying they have jobs, rose 46,000 to 28.57 million, a new high. This too is a 3-month centered moving average for December, compared to the November figure. The count of jobs in Q4 rose 126,000 to 30.53 million, reversing a dip in Q3.
Analysts today said they believe that the firm employment figures are not likely to prompt immediate monetary tightening by the Bank of England, since wage rates remained moderate. The average earnings index (AEI) for January (a 3-month moving average ending in January) was up 4.4% on a year ago, the same as the December figure. Despite some forecasts for a reduction to 4.2%, analysts based their expectation of steady monetary policy on a threshold of 4.5% that the Bank is said to use for consideration of interest rate increases.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050316g.jpg" width="353">
These wage rates and employment are linked, as seen in the second graph. Correlation over the last 10 years of the AEI with the year-on-year growth in workforce jobs has been positive and a notable 69% for the employment data with a two-quarter lead. Thus, as employment growth picks up, wages might be expected to accelerate some six months later; similarly, if employment growth slows, wage gains should diminish over time as well. This positive relationship with employment appearing to move ahead of wages suggests that the UK labor market is demand driven. A supply-oriented market would have wage movements leading employment.

<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"><a href="http://www.haverselect.com/dlx/UK/UK.HTM">United Kingdom:</a> All seasonally adjusted</th>
<th scope="col">Feb 2005</th>
<th scope="col">Jan 2005</th>
<th scope="col">Dec 2005</th>
<th scope="col">Nov 2005</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">Unemployment Rate (%)</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>4.7*</td>
<td>4.7*</td>
<td>4.7</td>
<td>5.0</td>
<td>5.2</td>
</tr>
<tr>
<td class="firstcol">Claimant Count (thous.)</td>
<td>813</td>
<td>814</td>
<td>824</td>
<td>832</td>
<td>854</td>
<td>933</td>
<td>947</td>
</tr>
<tr class="odd">
<td class="firstcol">Employment (mil.)</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>28.57*</td>
<td>28.52*</td>
<td>28.44</td>
<td>28.18</td>
<td>27.91</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Change</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>+46K</td>
<td>+30K</td>
<td>+0.9%</td>
<td>+0.9%</td>
<td>+0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Workforce Jobs</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>30.53 (Q4)</td>
<td>30.45</td>
<td>30.25</td>
<td>29.91</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Change</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>+126K vs. Q3</td>
<td>+0.7</td>
<td>+1.1</td>
<td>+0.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Earnings Index &quot;Headline Rate&quot;**</td>
<td>&nbsp;</td>
<td>4.4</td>
<td>4.4</td>
<td>4.2</td>
<td>4.3</td>
<td>3.4</td>
<td>3.5</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/050315i.jpg" width="353">
The ZEW Center for European Economic Research in Mannheim, Germany, reported that German analysts and institutional investors became slightly more optimistic regarding Germany&#39;s economic prospects over the next six months. The proportion of optimists over pessimists rose to 36.3% in March from 35.9% in February. Although this figure is well below the 73.4% reached in December 2003, it is 22.4 percentage points above the recent low of 13.9% recorded in November of last year.
Haver has recently added ZEW data regarding appraisals of current condition and expectations of conditions six months ahead for the Euro zone. For the six month outlook for the Euro Zone as a whole, the proportion of optimists over pessimists rose to 37.3% in March from 36.0% in February. This figures is 42.8 percentage points below the recent peak of 80.1 in January, 2004 and 19.6 points above the low of 17.7 in December 2004. The attached chart compares the expectations for Germany with those for the Euro Zone as a whole. As Germany is such a large component of the Euro Zone, the two series tend to move together.
In addition to appraisals of current conditions and expectations of conditions six months ahead for the entire Euro Zone, Haver has added appraisals of the profit outlook six months ahead for thirteen industries: banking, insurance, vehicles/automotive, chemical/pharmaceutical, steel/metal, electronics, machinery, consumption/ trade, construction, utilities, services, telecommunications and information technology. The March data show that, except for the consumption/trade and construction industries, optimists exceeded pessimists in appraising the profit outlook of all the other industries. The excess of optimists over pessimists varied from 28.8% for the electronics industry to 59.% for information technology.

<table border="0" cellspacing="0" width="100%">

</table>
<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/GERMANY.HTM">Germany: ZEW index</a></th>
<th scope="col">Mar 05</th>
<th scope="col">Feb 05</th>
<th scope="col">Mar 04</th>
<th scope="col">M/M dif</th>
<th scope="col">Y/Y dif</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col">&nbsp; 2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Macroeconomic conditions 6 months ahead&nbsp;</td>
<td>&nbsp;</td>
<td>&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">Germany</td>
<td>36.3</td>
<td>35.9</td>
<td>57.6</td>
<td>0.4</td>
<td>-21.3</td>
<td>44.6</td>
<td>38.4</td>
<td>45.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro Zone</td>
<td>37.3</td>
<td>36.0</td>
<td>64.3</td>
<td>1.3</td>
<td>-27.0</td>
<td>52.1</td>
<td>48.9</td>
<td>53.1</td>
</tr>
<tr>
<td class="firstcol">Profit expectations</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Banking</td>
<td>55.5</td>
<td>54.9</td>
<td>71.2</td>
<td>0.6</td>
<td>-15.7</td>
<td>59.6</td>
<td>30.5</td>
<td>-8.4</td>
</tr>
<tr>
<td class="firstcol">Insurance</td>
<td>43.1</td>
<td>41.2</td>
<td>62.2</td>
<td>1.9</td>
<td>-19.1</td>
<td>56.5</td>
<td>27.8</td>
<td>6.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Vehicle/automotive</td>
<td>-2.9</td>
<td>3.2</td>
<td>-6.7</td>
<td>-6.1</td>
<td>3.8</td>
<td>-0.1</td>
<td>-8.2</td>
<td>-6.0</td>
</tr>
<tr>
<td class="firstcol">Chem./pharmaceutical</td>
<td>50.5</td>
<td>47.5</td>
<td>37.8</td>
<td>3.0</td>
<td>12.7</td>
<td>37.5</td>
<td>25.8</td>
<td>25.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Steel/metal</td>
<td>45.0</td>
<td>47.1</td>
<td>41.6</td>
<td>-2.1</td>
<td>3.4</td>
<td>48.7</td>
<td>13.1</td>
<td>4.7</td>
</tr>
<tr>
<td class="firstcol">Electronics</td>
<td>28.8</td>
<td>27.2</td>
<td>49.9</td>
<td>1.6</td>
<td>-21.1</td>
<td>46.6</td>
<td>19.9</td>
<td>11.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Machinery</td>
<td>45.6</td>
<td>46.0</td>
<td>46.6</td>
<td>-0.4</td>
<td>-1.0</td>
<td>53.4</td>
<td>7.0</td>
<td>5.4</td>
</tr>
<tr>
<td class="firstcol">Consumption/trade</td>
<td>-0.4</td>
<td>9.0</td>
<td>7.9</td>
<td>-9.4</td>
<td>-8.3</td>
<td>-0.8</td>
<td>2.2</td>
<td>-8.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>-22.6</td>
<td>-24.6</td>
<td>-4.7</td>
<td>2.0</td>
<td>-17.9</td>
<td>-18.2</td>
<td>-33.7</td>
<td>-28.9</td>
</tr>
<tr>
<td class="firstcol">Utilities</td>
<td>42.6</td>
<td>49.7</td>
<td>45.9</td>
<td>-7.1</td>
<td>-3.3</td>
<td>46.9</td>
<td>19.1</td>
<td>18.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>52.2</td>
<td>55.2</td>
<td>62.4</td>
<td>-3.0</td>
<td>-10.2</td>
<td>58.0</td>
<td>35.2</td>
<td>25.4</td>
</tr>
<tr>
<td class="firstcol">Telecommunications</td>
<td>56.5</td>
<td>58.0</td>
<td>71.7</td>
<td>-1.5</td>
<td>-15.2</td>
<td>62.5</td>
<td>49.7</td>
<td>9.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Information technology</td>
<td>59.4</td>
<td>52.4</td>
<td>68.4</td>
<td>7.0</td>
<td>-9.0</td>
<td>63.0</td>
<td>45.2</td>
<td>17.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The ZEW Center for European Economic Research in Mannheim, Germany, reported that German analysts and institutional investors became slightly more optimistic regarding Germany's economic prospects over the next six months. The [...]

German Analysts and Institutional Investors More Positive Regarding Overall Economy but Profit Expectations Are Mixed

<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/050315h.jpg" width="353">
Chain store sales last week recovered all of the prior week&#39;s decline with a 0.6% increase according to the International Council of Shopping Centers (ICSC)-UBS survey.
Sales so far in March are 1.1% ahead of the February average which rose 1.0% from January.
During the last ten years there has been a 59% correlation between y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department.
The leading indicator of chain store sales from ICSC inched up 0.3% in the latest week (0.2% y/y). The indicator&#39;s February average rose 0.4% following a 0.6% January decline.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<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/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">03/12/05</th>
<th scope="col">03/05/05</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">Total Weekly Chain Store Sales</td>
<td>453.6</td>
<td>450.8</td>
<td>3.4%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales last week recovered all of the prior week's decline with a 0.6% increase according to the International Council of Shopping Centers (ICSC)-UBS survey. Sales so far in March are 1.1% ahead of the February average [...]

Chain Store Sales Recovered

<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/050315f.jpg" width="353">
The Empire State Index of General Business Conditions in New York&#39;s manufacturing industries inched higher in March to 19.61 but remained well below its level a year ago.
The new orders component improved sharply to the highest level since last September and the employment measure rose as well to its highest since September. 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 prices paid index rose and reversed all of the moderate decline in February.
Expectations for business conditions in six months rose to the highest level this year. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050315g.jpg" width="353">
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">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Mar &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Business Conditions (diffusion index)</td>
<td>19.61</td>
<td>19.19</td>
<td>28.15</td>
<td>28.76</td>
<td>16.17</td>
<td>7.19</td>
</tr>
</tbody>
</table>
</body>
</html>

The Empire State Index of General Business Conditions in New York's manufacturing industries inched higher in March to 19.61 but remained well below its level a year ago. The new orders component improved sharply to the highest level [...]

Empire State Index Eased Higher Again

<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/050315e.jpg" width="353">
Total business inventories jumped 0.9% in January following an unrevised 0.2% December rise. The pace of inventory accumulation has accelerated markedly since 2002 but has not kept pace with the improvement in sales growth. Consequently the ratio of inventories-to-sales fell through last year and in January remained at the record low.
Inventory accumulation was strongest in January at the factory level where a 1.3% gain was the largest monthly increase since 1988.
Wholesale inventories jumped 1.1%. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.
Retail inventories rose 0.4% in January following a 0.3% December increase. Accumulation of non-auto retail inventories, however, again was quite strong up 0.8% led by a 19.8% y/y gain in building materials and a 7.8% y/y rise in furniture &amp; electronics.
Overall business sales jumped 0.8% (+11.1% 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/@ED/@ED06/@ED0601/@ED0601.HTM">Business Inventories</a></th>
<th scope="col">Jan</th>
<th scope="col">Dec</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</td>
<td>0.9%</td>
<td>0.2%</td>
<td>8.6%</td>
<td>7.9%</td>
<td>1.9%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.4%</td>
<td>0.3%</td>
<td>6.4%</td>
<td>6.0%</td>
<td>5.0%</td>
<td>6.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>0.8%</td>
<td>1.1%</td>
<td>7.5%</td>
<td>6.5%</td>
<td>2.9%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>1.1%</td>
<td>0.4%</td>
<td>12.3%</td>
<td>11.2%</td>
<td>2.2%</td>
<td>0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>1.3%</td>
<td>0.1%</td>
<td>8.5%</td>
<td>7.5%</td>
<td>-1.3%</td>
<td>-1.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

Total business inventories jumped 0.9% in January following an unrevised 0.2% December rise. The pace of inventory accumulation has accelerated markedly since 2002 but has not kept pace with the improvement in sales growth. [...]

U.S. Inventories Up

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

250502A5.jpg

250502B5.jpg

Nonfarm payrolls increased 177,000 (1.2% y/y) during April after rising 185,000 in March, revised from 228,000, and 102,000 in February, revised from 117,000. Expectations had been for a 130,000 rise in the Action Economics Forecast Survey. The latest figure left the three-month average change at 155,000 in April, down from 232,000 in January.

Average hourly earnings rose 0.2% during April after unrevised increases of 0.3% in March and 0.2% in February. Earnings growth of 3.8% y/y was below the 5.9% high in March 2022.

The unemployment rate, measured in the household survey, held m/m at an expected 4.2% in April, and compared to 4.1% in February and 4.0% in January. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, eased to 7.8% in April from 7.9% in March.

In the **establishment survey**, private-sector employment rose 167,000 (1.2% y/y) after a 170,000 March increase. Factory sector jobs edged 1,000 lower (-0.7% y/y) following a 3,000 gain. Construction sector employment increased 11,000 (1.7% y/y), after rising 7,000 in March.

Private service-producing sector employment increased 156,000 (1.4% y/y) in April after improving 161,000 in March. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 70,000 (3.4% y/y) last month following a 74,000 March increase. Leisure & hospitality employment rose 24,000 (1.3% y/y) after a 38,000 gain. Trade, transportation & utilities rose 32,000 (0.9% y/y) in April following a 25,000 March increase. Professional & business services employment rose 17,000 (-0.1% y/y) following a 3,000 rise while temporary help employment rose 3,600 (-3.9% y/y) following a 2,700 decline. Financial activities employment improved 14,000 (1.2% y/y) after a 6,000 gain. The number of information sector jobs held steady (-0.4% y/y) last month after falling 2,000 in March.

Government sector payrolls rose 10,000 (1.3% y/y) last month after increasing 15,000 in March. The number of local government jobs increased 13,000 (1.4% y/y) following a 17,000 gain. State government employment rose 6,000 (1.8% y/y) following a 2,000 March increase but federal government payrolls fell 9,000 (-0.3% y/y), the third consecutive monthly decline.

Private-sector average hourly earnings rose 0.2% (3.8% y/y) in April after increasing 0.3% in March. Earnings in the goods-producing sector eased 0.1% (+4.0% y/y) following a 0.6% gain. Earnings in construction rose 0.3% (3.6% y/y), after a 0.2% rise but factory sector earnings declined 0.3% (+4.3% y/y) after surging 0.8% in March. In the private services-sector, earnings rose 0.2% (3.7% y/y) in April for the third straight month. Information sector pay increased 1.0% (5.2% y/y) last month after easing 0.1%, and financial activities earnings rose 0.5% (4.3% y/y) for the second straight month. Trade, transportation & utilities sector pay increased 0.4% (3.4% y/y) after 0.6%. Professional & business sector earnings increased 0.1% (4.4% y/y) after 0.2% in March. Leisure & hospitality earnings held steady (+3.8% y/y) following a 0.6% March increase.

250502C5.jpg

250502D5.jpg

The length of the average workweek held steady at 34.3 hours in April. The workweek in the goods-producing sector eased to 39.8 hours from 40.0 hours. The construction sector average workweek eased to 39.0 hours from 39.3 hours while the factory sector workweek moved lower to 40.0 hours from 40.2. The average workweek in the private service sector held at 33.2 hours. Professional & business service hours fell to 36.3 hours from 36.4 while trade, transportation & utilities hours improved to 34.3 from 34.0 hours. Private education hours rose slightly to 32.8, but leisure & hospitality held steady at 25.5 hours.

In the **household survey**, the unemployment rate held at 4.2% in April as employment rose 436,000 and the size of the labor force increased 518,000. The labor force participation rate edged up to 62.6% last month from 62.5% in March. It remained below the high of 63.3% early in 2020. The rate for teenagers declined to 36.9%. For workers aged 20-24, the rate held steady at 72.1%, up from 71.8% six months earlier. For workers aged 25-54 the rate rose to 83.6%, a five-month high. For individuals 55 and over, the rate improved to 38.4% in April.

The employment/population ratio for all workers in April rose to 60.0%. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

250502X5.jpg

250502F5.jpg

- Job growth spreads across most sectors.
- Earnings growth trend decelerates.
- Jobless rate holds steady.

U.S. Job Growth Is Firm in April but March Gain Is Lessened

Winnie Tapasanun

250502F32.jpg

250502G32.jpg

Total factory orders rose a slightly less-than-expected 4.3% m/m in March after rises of 0.5% in February and 1.8% in January, data from the U.S. Census Bureau showed. A 4.5% m/m March increase had been expected in the Action Economics Forecast Survey. The March reading was the third successive monthly rise and the largest since July 2024. The year-on-year rate accelerated to 6.0% in March, the highest since November 2022, from 2.3% in February. Notably, orders for nondefense aircraft & parts soared 139.0% in March following a 7.4% drop in February and a 92.9% surge in January. Factory orders excluding defense rose 4.8% (5.9% y/y), the largest of three straight m/m/ rises, after a 0.4% February increase. Factory orders excluding the transportation sector fell 0.2% (+1.1% y/y), the first m/m fall since August, after rising 0.3% in February, January and December.

Durable goods orders jumped 9.2% (11.9% y/y) in March, the third consecutive m/m gain and the biggest since July 2024, on top of a 0.8% increase in February (matching +9.2% m/m in the advance report on April 24). The March jump reflected m/m orders increases of 27.1% (the largest m/m surge since July 2024; 31.2% y/y) in transportation equipment, 1.1% (4.9% y/y) in primary metals, 0.5% (-0.4% y/y) in furniture & related products, 0.1% (2.5% y/y) in fabricated metal products, and 0.1% (0.9% y/y) in machinery. To the downside, durable goods orders for computers & electronic products (-1.3%; +2.7% y/y) and electrical equipment, appliances & components (-1.0%; +4.2% y/y) declined m/m in March.

Nondurable goods orders, which equal nondurable goods shipments, fell 0.3% (+0.4% y/y) in March, the first m/m fall since September, after a 0.1% uptick in February. The March fall reflected m/m drops of 2.4% (-9.3% y/y) in petroleum & coal products and 0.9% (-1.2% y/y) in apparel. To the upside, the following nondurable goods shipments rose m/m in March: leather & allied products (1.5%; 8.6% y/y), beverage & tobacco products (0.7%; 5.8% y/y), paper products (0.6%; 2.3% y/y), printing (0.3%; 3.8% y/y), textile mills (0.3%; 0.8% y/y), chemical products (0.2%; 5.4% y/y), plastics & rubber products (0.2%; 0.4% y/y), food products (0.1%; 1.8% y/y), and textile products (0.1%; 2.1% y/y).

Total shipments slipped 0.1% (+2.0% y/y) in March, the first m/m easing since October, after a 0.7% increase in February. Excluding transportation, shipments were virtually unchanged m/m (+1.1% y/y) in March following six straight m/m gains. Shipments of durable goods industries inched up 0.1% (3.8% y/y) in March, the smallest of four consecutive m/m increases, after a 1.3% advance in February. This reflected m/m durable goods shipments rises of 1.2% (5.6% y/y) in primary metals, 0.9% (0.1% y/y) in furniture & related products, 0.8% (-0.2% y/y) in nonmetallic mineral products, 0.4% (0.0% y/y) in machinery, 0.3% (1.8% y/y) in fabricated metal products, 0.2% (4.5% y/y) in computers & electronic products, 0.2% (-2.1% y/y) in wood products, and 0.1% (3.0% y/y) in electrical equipment, appliances & components. In contrast, durable goods shipments for transportation equipment (-0.5%; +7.3% y/y) and miscellaneous durable goods (-0.1%; +2.9% y/y) fell m/m in March following three successive m/m increases.

Unfilled orders rose 2.0% (2.3% y/y) in March, up for the eighth month in nine, after a 0.1% uptick in February. Excluding transportation, unfilled orders dipped 0.1% (+0.7% y/y) in March, the first m/m easing since May 2024, after holding steady in February. Backlogs of durable goods rose 2.0% (2.3% y/y) in March, reflecting m/m rises of 3.1% (3.1% y/y) in transportation equipment and 0.2% (2.4% y/y) in electrical equipment, appliances & components.

Inventories edged up 0.1% (0.9% y/y) in March, the fifth straight m/m increase, after rising at the same pace in the prior two months. Excluding transportation, inventories were up 0.1% (0.5% y/y) in March, the fifth consecutive m/m rise. Durable goods inventories ticked up 0.1% (1.0% y/y) in March after holding steady in February and January; nondurable goods inventories edged up 0.1% (0.8% y/y), the fifth successive m/m increase.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

250502H32.jpg

250502I32.jpg

- March manufacturers’ new orders +4.3% m/m; +6.0% y/y, highest since Nov. ’22.
- Durable goods orders (+9.2%) jump m/m, while nondurable goods orders (-0.3%) and shipments (-0.1%) decline m/m.
- Transportation equipt. orders +27.1% m/m, w/ a 139.0% m/m surge in nondefense aircraft & parts orders.
- Unfilled orders +2.0%, the eighth m/m rise in nine months.
- Inventories +0.1%, the fifth consecutive m/m increase.

U.S. Factory Orders Increase for the Third Straight Month in March

Robert Brusca

250502E.jpg

The global manufacturing data showed broad weakening in April as conditions weakened across more than half of the contributing early reporters in the S&P survey of manufacturing. Of the 18 early reporting countries, more than half of them showed deceleration over six months and 12 months. Over three months, only 8 of 18 showed deterioration and that's about as good as it got in this report. In the current month, month-to-month changes showed more than half of the survey contributors showing weaker results than the month before. In the S&P framework, manufacturing improved month-to-month for the U.S.; however, looking at sequential averages for the U.S., U.K., European monetary union, Canada, and Japan, we see a steady weakening and results over 12 months, over six months versus 12 months, and for three months versus 6 months. The highly developed countries are not doing particularly well.

Asian economies are also showing slight deterioration but doing a little better than the developed countries in general.

Only five of the 18 reporting countries have queue percentile standings in their data back to January 2021 that are above their medians. Readings at or above the 50% mark are at or above the median standing. Canada is showing the weakest manufacturing result on record over this span, in terms of its queue percentile standing which is at 0 in the current month.

I showed the graphic for the Baltic dry goods index in this report rather than statistics on the manufacturing PMI data because the Baltic data, which reflect shipping volume for dry goods - that is excluding things like oil - is weak but it's only in the neighborhood where it's been for some time. There has been a great deal of talk about how tariffs may have impacted trade flows, expected trade flows, shipping, shipping rates, and the like. However, according to the Baltic dry goods index, there isn't much evidence that this is occurring right now and affecting the current data. That may still lie ahead but for now it's not baked in the cake.

250502.jpg

Globally Manufacturing Weakens

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.

Economy in Brief: March 2005

Jump to:

Housing Starts Higher in February

Industrial Production Increase Due To Autos & High Tech

U.S. Current Account Deficit Another Record

U.S. Current Account Deficit Another Record

German Analysts and Institutional Investors More Positive Regarding Overall Economy but Profit Expectations Are Mixed

Chain Store Sales Recovered

Empire State Index Eased Higher Again

U.S. Inventories Up