Tom Moeller

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>U.S. import prices were raised during the last year by two
forces, higher energy prices and the lower dollar. The Bureau of Labor
Statistics indicated that last month import prices rose 0.9% in April
and roughly matched Consensus expectations for a 0.8% increase.
Excluding petroleum, import prices gained 0.3% after easier increases
during the prior two months. During the last twelve months, the gain in
energy prices remained strong at 58.7% and non-oil import price gains
reached a new high of 3.3%.</p>
<p>Petroleum prices rose 3.3% last month, the strongest gain
since January. Through April, prices rose 9.3% after last year's 78.6%
increase from December to December. That strength faded in May. So far
this month, Brent crude oil prices averaged close to $80 per barrel
versus $85 last month.</p>
<p>For non-oil imports, prices also have picked up with the lower
dollar as well as the firmer economy. Prices rose 0.3% in April
following little change during the prior two months. As a result,
prices rose at a 2.5% rate since December. That's down from the 6.8%
peak reached in January but up from the 4.1% decline last year. (During
the last ten years, there has been a negative 81% correlation between
the nominal trade-weighted exchange value of the US dollar vs. major
currencies and the y/y change in non-oil import prices.)</p>
<p>Despite the macro-forces behind strength in non-oil import
prices, the detail showed very limited gains. Stronger food &amp;
beverage prices have provided the lift this year with an 11.7% (AR)
gain since December. That compares to a 2.8% decline during 2009.
Prices for nonauto consumer goods have been under control. The
unchanged reading last month capped a 0.6% YTD gain versus a 0.3%
decline last year. Apparel prices have been unchanged YTD after a 0.1%
decline last year. Furniture prices fell 6.7% YTD after little change
last year while appliance prices have strengthened by 4.0% after last
year's more modest increase. Imported auto prices fell at a 1.1% rate
YTD after a 0.4% uptick last year.Capital goods ticked up 0.1% last
month (-1.3% YTD) and excluding computers, prices rose 0.2% (-0.5% YTD)
following a 0.7% gain last year.</p>
<p>Total export prices rose 1.2% last month after a 0.7% March
increase. The rise reflected a 1.4% jump (9.0% YTD) in non-agricultural
export prices and a 0.7% drop in agricultural goods prices (-4.3% YTD).</p>
<p>The import and export price series can be found in Haver's <b>USECON
</b>database. Detailed figures are available in the <b>USINT</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA, %)</a></b></th>
<th scope="col"><b>April</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>April Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>0.9</td>
<td>0.5</td>
<td>-0.1</td>
<td>11.1</td>
<td>-11.5</td>
<td>11.5</td>
<td>4.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>3.3</td>
<td>2.7</td>
<td>-0.8</td>
<td>58.7</td>
<td>-35.9</td>
<td>37.7</td>
<td>11.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonpetroleum</td>
<td>0.3</td>
<td>-0.1</td>
<td>0.1</td>
<td>3.3</td>
<td>-4.1</td>
<td>5.3</td>
<td>2.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Export - All Commodities</td>
<td>1.2</td>
<td>0.7</td>
<td>-0.3</td>
<td>5.7</td>
<td>-4.6</td>
<td>6.0</td>
<td>4.9</td>
</tr>
</tbody>
</table>
</body></html>

U.S. import prices were raised during the last year by two forces, higher energy prices and the lower dollar. The Bureau of Labor Statistics indicated that last month import prices rose 0.9% in April and roughly matched Consensus [...]

U.S. Initial Jobless Insurance Claims Slip To Low-End Of Recent Range

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>U.S. import prices were raised during the last year by two
forces, higher energy prices and the lower dollar. The Bureau of Labor
Statistics indicated that last month import prices rose 0.9% in April
and roughly matched Consensus expectations for a 0.8% increase.
Excluding petroleum, import prices gained 0.3% after easier increases
during the prior two months. During the last twelve months, the gain in
energy prices remained strong at 58.7% and non-oil import price gains
reached a new high of 3.3%.</p>
<p>Petroleum prices rose 3.3% last month, the strongest gain
since January. Through April, prices rose 9.3% after last year's 78.6%
increase from December to December. That strength faded in May. So far
this month, Brent crude oil prices averaged close to $80 per barrel
versus $85 last month.</p>
<p>For non-oil imports, prices also have picked up with the lower
dollar as well as the firmer economy. Prices rose 0.3% in April
following little change during the prior two months. As a result,
prices rose at a 2.5% rate since December. That's down from the 6.8%
peak reached in January but up from the 4.1% decline last year. (During
the last ten years, there has been a negative 81% correlation between
the nominal trade-weighted exchange value of the US dollar vs. major
currencies and the y/y change in non-oil import prices.)</p>
<p>Despite the macro-forces behind strength in non-oil import
prices, the detail showed very limited gains. Stronger food &amp;
beverage prices have provided the lift this year with an 11.7% (AR)
gain since December. That compares to a 2.8% decline during 2009.
Prices for nonauto consumer goods have been under control. The
unchanged reading last month capped a 0.6% YTD gain versus a 0.3%
decline last year. Apparel prices have been unchanged YTD after a 0.1%
decline last year. Furniture prices fell 6.7% YTD after little change
last year while appliance prices have strengthened by 4.0% after last
year's more modest increase. Imported auto prices fell at a 1.1% rate
YTD after a 0.4% uptick last year.Capital goods ticked up 0.1% last
month (-1.3% YTD) and excluding computers, prices rose 0.2% (-0.5% YTD)
following a 0.7% gain last year.</p>
<p>Total export prices rose 1.2% last month after a 0.7% March
increase. The rise reflected a 1.4% jump (9.0% YTD) in non-agricultural
export prices and a 0.7% drop in agricultural goods prices (-4.3% YTD).</p>
<p>The import and export price series can be found in Haver's <b>USECON
</b>database. Detailed figures are available in the <b>USINT</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
  <colgroup><col><col><col><col><col><col><col></colgroup>
  <thead><tr>
    <th scope="col" class="firstcol"><b><a 
 href="http://www.haverselect.com/dlx/USECON/@E8/@E807/@E807.HTM">Import/Export
Prices (NSA, %)</a></b></th>
    <th scope="col"><b>April</b></th>
    <th scope="col"><b>March</b></th>
    <th scope="col"><b>February</b></th>
    <th scope="col"><b>April Y/Y</b></th>
    <th scope="col"><b>2009</b></th>
    <th scope="col"><b>2008</b></th>
    <th scope="col"><b>2007</b></th>
  </tr>
  </thead>
  <tbody>
    <tr class="odd">
      <td class="firstcol">Import - All Commodities</td>
      <td>0.9</td>
      <td>0.5</td>
      <td>-0.1</td>
      <td>11.1</td>
      <td>-11.5</td>
      <td>11.5</td>
      <td>4.2</td>
    </tr>
    <tr>
      <td class="firstcol">&nbsp; Petroleum</td>
      <td>3.3</td>
      <td>2.7</td>
      <td>-0.8</td>
      <td>58.7</td>
      <td>-35.9</td>
      <td>37.7</td>
      <td>11.6</td>
    </tr>
    <tr>
      <td class="firstcol">&nbsp; Nonpetroleum</td>
      <td>0.3</td>
      <td>-0.1</td>
      <td>0.1</td>
      <td>3.3</td>
      <td>-4.1</td>
      <td>5.3</td>
      <td>2.7</td>
    </tr>
    <tr class="odd">
      <td class="firstcol">Export - All Commodities</td>
      <td>1.2</td>
      <td>0.7</td>
      <td>-0.3</td>
      <td>5.7</td>
      <td>-4.6</td>
      <td>6.0</td>
      <td>4.9</td>
    </tr>
  </tbody>
</table>
<span id="articletitle">U.S. Initial Jobless Insurance
Claims Slip To Low-End Of Recent Range</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> May 13, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Bureau of Labor Statistics reported that initial claims
for jobless insurance fell 4,000 to 444,000 after the prior week's
lessened 3,000 drop. As was the case last week, the latest level
remained near this cycle's lowest but disappointed Consensus
expectations for 440,000 claims. Last week's figure was down from the
recession peak of 651,000 reached in March of 2009. The four-week
moving average of initial claims increased slightly to 450,500.</p>
<p>A 12,000 increase in continuing claims for unemployment
insurance during the latest week followed a lessened 38,000 drop during
the prior week. Claims were down by one-third from the June '09 peak.
The overall decline is a function of the improved job market but also
reflects the exhaustion of 26 weeks of unemployment benefits.
Continuing claims provide an indication of workers' ability to find
employment. The four-week average of continuing claims at 4.640M
remained near the cycle low. This series dates back to 1966.</p>
<p>Extended benefits for unemployment insurance rose w/w to
218,812. However, they were down by three-quarters from a peak of
597,688 reached in November.</p>
<p>The insured unemployment rate remained at 3.6% where it has
been since mid-February. The rate reached a high of 4.9% during May.
During the last ten years, there has been a 96% correlation between the
level of the insured unemployment rate and the overall rate of
unemployment published by the Bureau of Labor Statistics.</p>
<p>The highest insured unemployment rates in the week ending
April 24 were in Alaska (6.6 percent), Puerto Rico (6.3), Oregon (5.8),
Nevada (5.1), California (4.9), Pennsylvania (4.8), Wisconsin (4.8),
Montana (4.7), North Carolina (4.6), Rhode Island (4.6), Connecticut
(4.5), and Idaho (4.5). The lowest insured unemployment rates were in
Virginia (2.1), Texas (2.2), Georgia (2.8), Wyoming (2.9), Maryland
(3.0), Florida (3.1), Ohio (3.2), New York (3.5) and Maine (3.7). These
data are not seasonally adjusted but the overall insured unemployment
rate is.</p>
<p>The unemployment insurance claims data is available in Haver's
<b>WEEKLY</b> database and the state data is in the <b>REGIONW</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
  <colgroup><col><col><col><col><col><col><col></colgroup>
  <thead><tr>
    <th scope="col" class="firstcol"><b><a 
 ;=""
 href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM"
 style="color: black;">Unemployment Insurance (000s)</a></b></th>
    <th scope="col"><b>05/08/10</b></th>
    <th scope="col"><b>05/01/10</b></th>
    <th scope="col"><b>04/24/10</b></th>
    <th scope="col"><b>Y/Y</b></th>
    <th scope="col"><b>2009</b></th>
    <th scope="col"><b>2008</b></th>
    <th scope="col"><b>2007</b></th>
  </tr>
  </thead>
  <tbody>
    <tr class="odd">
      <td class="firstcol">Initial Claims</td>
      <td>444</td>
      <td>448</td>
      <td>451</td>
      <td>-29.0%</td>
      <td>572</td>
      <td>419</td>
      <td>321</td>
    </tr>
    <tr>
      <td class="firstcol">Continuing Claims</td>
      <td>--</td>
      <td>4,627</td>
      <td>4,615</td>
      <td>-27.6%</td>
      <td>5,809</td>
      <td>3,340</td>
      <td>2,549</td>
    </tr>
    <tr class="odd">
      <td class="firstcol">Insured Unemployment Rate (%)</td>
      <td>--</td>
      <td>3.6</td>
      <td>3.6</td>
      <td>4.9 (5/2009)</td>
      <td>4.4</td>
      <td>2.5</td>
      <td>1.9</td>
    </tr>
  </tbody>
</table>
<span id="articletitle">U.S. Fiscal 'YTD Budget Deficit
Narrows</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> May 13, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Federal government's April budget balance totaled $-82.7B
which was four times the April '09 deficit. Nevertheless, the Fiscal
'YTD deficit narrowed to $799.7B and was somewhat smaller than the
FY'09 deficit of $802.3B.</p>
<p>Though the recession ended, net revenues during the first
seven months of FY'10 still fell 4.5% y/y. Individual income tax
receipts fell 11.6% y/y as the unemployment rate remained elevated. The
rate of decline, however, is down from the peak 29.0% at the end of
last year. Corporate tax receipts firmed by 8.9% versus the first seven
months of last fiscal year with improved corporate profits.
Year-to-date, employment taxes fell 4.8% (just lightly off the peak
rate of decline) but unemployment insurance tax receipts improved by
12.3% versus the first seven months of last fiscal year. Estate
&amp; gift taxes fell by nearly one-quarter this fiscal year.</p>
<p>Overall outlays fell 2.9% so far this fiscal year versus FY'09
as a commerce &amp; housing credit expired. Social Security
payments (21% of outlays) rose 6.7% and net interest payments (5% of
outlays) rose 7.9% with higher rates. Medicare expenditures (12% of
outlays) rose 11.0% and other health care services spending (10% of
outlays) rose 12.4%. "Income security" spending (11% of outlays)
continued to jump by one-quarter while defense spending (19% of total
outlays) rose 7.8%.</p>
<p>The Government's financial data are available in Haver's <b>USECON</b>
database, with extensive detail available in the specialized <b>GOVFIN</b>.</p>
<p><span class="detailTitle" style="width: 400px;"><b>True
Legislators Becoming Scarce in Congress</b> from the American
Enterprise Institute can be found <a 
 href="http://www.aei.org/article/102038">here</a>.</span></p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513h.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513i.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
  <colgroup><col><col><col><col><col><col></colgroup>
  <thead><tr>
    <th scope="col" class="firstcol"><a 
 href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E106021.HTM"><b>US
Government Finance</b></a> &nbsp;</th>
    <th scope="col"><b>April</b></th>
    <th scope="col"><b>FY 'YTD</b></th>
    <th scope="col"><b>FY 'YTD</b></th>
    <th scope="col"><b>FY 2009</b></th>
    <th scope="col"><b>FY 2008</b></th>
    <th scope="col"><b>FY 2007</b></th>
  </tr>
  </thead>
  <tbody>
    <tr class="odd">
      <td class="firstcol">Budget Balance</td>
      <td>$-82.7B</td>
      <td>$-799.7B</td>
      <td>&nbsp;--</td>
      <td>$-1,417.1B</td>
      <td>$-454.8B</td>
      <td>$-161.5B</td>
    </tr>
    <tr>
      <td class="firstcol">Net Revenues</td>
      <td>$245.3B</td>
      <td>$1,199.2B</td>
      <td>-4.5%</td>
      <td>-16.6%</td>
      <td>-1.7%</td>
      <td>6.7%</td>
    </tr>
    <tr class="odd">
      <td class="firstcol">Net Outlays</td>
      <td>$328.0B</td>
      <td>$1,998.8B</td>
      <td>-2.9%</td>
      <td>18.2%</td>
      <td>9.1%</td>
      <td>2.8%</td>
    </tr>
  </tbody>
</table>
<span id="articletitle">UK Trade Deficit Worsens As
Exports Lag Imports</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> May 13, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100513j.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The UK trade picture deteriorated in March With exports up by
1% on the month as imports screamed higher by 5.2%. This put exports in
a severe shortfall position for March and ballooned the deficit. Of
course in March the situation had been completely reversed and the
deficit was much smaller. Over the various intervals in the table,
3-mo, 6-mo and 12-mo, export and import growth rate pairs are very
similar in each period (with both growth rates steadily rising). But
imports are stronger over three months compared to exports which, in
turn, are stronger over six- and twelve-months. But since the UK trade
balance is in deficit to start, those periods in which exports did grow
faster did not did not do much good, as the deficit widened in each of
them (three months compared to six months and six months compared to
twelve-months).</p>
<p>The trade balance is a tough to talk about in the
recession-to-recovery periods since its impact on the economy and its
meaning are conflicted. Obviously a wider trade deficit weakens GDP as
the trade balance is a subtraction from GDP. But paradoxically strong
imports which contribute to a widening of the deficit (all other things
equal) are a sign of revived domestic demand and of STRONGER GDP growth.</p>
<p>So the signal from trade about the UK economy is somewhat
muddled. In the chart above the trend for the deficit shows that amid
some volatility the deficit is getting larger indicating that imports
are outpacing exports or at least more of less tracking with them. More
importantly, the growth rate for imports is steadily rising (as is the
trend for exports). That suggests a revival in demand in the UK
economy. So while the trade gap is widening and that is siphoning off
some of the impact of this rising domestic demand, reducing its spur to
domestic growth, the evidence from trade is that the UK economy is
still in the improving mode as domestic demand is underpinning imports
and rising strongly.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="6" scope="col"> <b>UK Trade
trends for goods</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="2">m/m%</td>
<td style="font-weight: bold;" colspan="3">%
Saar</td>
</tr>
<tr class="grey1">
<td class="firstcol">&nbsp;</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>3M</td>
<td>6M</td>
<td>12M</td>
</tr>
<tr class="grey1">
<td class="firstcol">Balance*</td>
<td>-&#163; 52 </td>
<td>-&#163; 6.31 </td>
<td>-&#163; 7.26 </td>
<td>-&#163; 7.14 </td>
<td>-&#163; 6.87 </td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol"><b>Exports</b></td>
</tr>
<tr>
<td class="firstcol">All Exp</td>
<td>1.0%</td>
<td>8.0%</td>
<td>10.9%</td>
<td>23.6%</td>
<td>15.7%</td>
</tr>
<tr>
<td class="firstcol">Capital gds</td>
<td>0.8%</td>
<td>1.3%</td>
<td>2.4%</td>
<td>13.1%</td>
<td>-0.4%</td>
</tr>
<tr>
<td class="firstcol">Road Vehicles</td>
<td>-2.1%</td>
<td>4.0%</td>
<td>-29.4%</td>
<td>28.6%</td>
<td>45.1%</td>
</tr>
<tr>
<td class="firstcol">Basic Materials</td>
<td>13.1%</td>
<td>46.9%</td>
<td>174.7%</td>
<td>84.6%</td>
<td>57.9%</td>
</tr>
<tr>
<td class="firstcol">Food Feed Bev
&amp; Tbco</td>
<td>0.6%</td>
<td>8.0%</td>
<td>-0.6%</td>
<td>15.6%</td>
<td>10.7%</td>
</tr>
<tr>
<td class="firstcol">Other Exports</td>
<td>0.9%</td>
<td>8.6%</td>
<td>15.6%</td>
<td>23.7%</td>
<td>15.2%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol"><span style="font-weight: bold;">IMPORTS</span></td>
</tr>
<tr>
<td class="firstcol">All IMP</td>
<td>5.2%</td>
<td>-0.3%</td>
<td>16.1%</td>
<td>21.4%</td>
<td>14.0%</td>
</tr>
<tr>
<td class="firstcol">Capital gds</td>
<td>2.4%</td>
<td>-0.4%</td>
<td>0.0%</td>
<td>23.1%</td>
<td>9.0%</td>
</tr>
<tr>
<td class="firstcol">Road Vehicles</td>
<td>8.2%</td>
<td>-1.0%</td>
<td>5.6%</td>
<td>30.7%</td>
<td>60.9%</td>
</tr>
<tr>
<td class="firstcol">Basic Materials</td>
<td>10.8%</td>
<td>-3.2%</td>
<td>73.6%</td>
<td>22.8%</td>
<td>24.6%</td>
</tr>
<tr>
<td class="firstcol">Food Feed Bev
&amp; Tbco</td>
<td>1.8%</td>
<td>1.9%</td>
<td>-5.0%</td>
<td>8.6%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">Other Imports</td>
<td>5.5%</td>
<td>-0.3%</td>
<td>22.8%</td>
<td>21.7%</td>
<td>11.5%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">*Stg Blns;
mo or period
average</td>
</tr>
</tbody>
</table>
</body>
</html>


Robert Brusca

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>It was hardly a spectacular number for Q1 GDP from EMU
although the 0.2% Q/Q gain did beat the expected gain of just 0.1% Q/Q.
GDP is rising Yr/Yr for the first time Since Q3 2008 and that is
something. France, Italy, the Netherlands and Germany have positive
Yr/Yr gains for GDP among the early GDP reporters. The UK and Greece
are still showing Yr/Yr GDP declines. Germany and France show the
strongest EU/EMU Yr/Yr gains among those that have reported at 1.5% and
1.2%, respectively. Both are short of the US mark of 2.5%. The US
recovery seems to have gathered pace while in Europe growth rates are
still struggling to cobble together positive numbers.</p>
<p>Obviously in the current situation we are eager to see results
from Spain, Portugal and Ireland, but they have not yet reported. This
morning Spain did announce some further budget cuts and Portugal said
in was in the midst of planning more cuts. Greece&#8217;s GDP is still
falling but at least the pace of decline did not worsen this quarter.</p>
<p>Gold is making new highs on the expectation that the European
debt bomb will explode. But what we see instead is evidence that, at
least to start things out, the key problem-countries are taking some of
the needed steps toward austerity and success. Spain and Portugal seem
to be using the new EMU financial back-stop to good purpose by using
its protective influence as a chance to make some much-needed changes.
I think that this sort of effort flies in the face of the gold market
speculation. Greece remains a problem issue, since its people are not
really on board for what its politicians signed them up for. But that
could change when the Greek people realize that there is no &#8216;plan B&#8217;
for them. They are at the end of their rope with this bailout offer.
And, if they are the only problem country in EMU and the rest get their
act in order, I don&#8217;t see how an intransigent Greece, by itself, drives
gold prices higher &#8211; certainly not form here.</p>
<p>Today the Euro-Area also released March industrial output
figures. MFG IP grew at a 14.8% pace in Q1 in the Zone. In the quarter
output gains were led by France Italy and Germany, in that order,
followed by the UK at 4.9% and then Spain at -4.3%. Among these five
large EU countries only Spain showed a quarterly drop in IP, but all
had Yr/Yr increases from March of one year ago; the UK&#8217;s 3.3% Yr-o-Yr
gain from March of 2009 is the smallest gain of the lot on that basis.</p>
<p>That's quit a bit better than the GDP report seems. Of course,
part of the problem is that Europe&#8217;s growth is substantially export-led
and that MFG is pulling the whole economy ahead. The consumer sector
remains weak and the services sector ahs not gotten into gear.
Consumers remain the largest piece of the economy so the bulging IP
numbers make for great headlines but the &#8216;bulge&#8217; is all &#8216;steroids&#8217;
since it takes consumer participation and job growth to make great
economic growth (GDP). Europe is not there yet. We conclude these
points about sector participations from the other monthly data we have
in hand since Euro-GDP reports come in a &#8216;flash&#8217; format without any
detail. The detail will be filled in later. We are all interested in
that detail, about sectors and about member by member economic
performance. We have yet to see it.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> <b>Euro-Area
And Main G-10 Country GDP Results</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Quarter over
quarter-Saar</td>
<td colspan="4">Year/Year</td>
</tr>
<tr>
<td class="firstcol">GDP</td>
<td>Q1-10</td>
<td>Q4-09</td>
<td>Q3-09</td>
<td>Q1-10</td>
<td>Q4-09</td>
<td>Q3-09</td>
<td>Q2-09</td>
</tr>
<tr class="grey1">
<td class="firstcol">EMU-15</td>
<td>0.8%</td>
<td>0.2%</td>
<td>1.6%</td>
<td>0.5%</td>
<td>-2.2%</td>
<td>-4.1%</td>
<td>-4.9%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.5%</td>
<td>2.2%</td>
<td>1.0%</td>
<td>1.2%</td>
<td>-0.4%</td>
<td>-2.6%</td>
<td>-3.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany</td>
<td>0.6%</td>
<td>0.7%</td>
<td>2.9%</td>
<td>1.5%</td>
<td>-2.2%</td>
<td>-4.8%</td>
<td>-5.8%</td>
</tr>
<tr>
<td class="firstcol">Greece</td>
<td>-3.1%</td>
<td>-3.1%</td>
<td>-1.9%</td>
<td>-2.3%</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-1.9%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy</td>
<td>2.1%</td>
<td>-0.2%</td>
<td>1.5%</td>
<td>0.6%</td>
<td>-2.8%</td>
<td>-4.7%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">The Netherlands</td>
<td>1.0%</td>
<td>1.5%</td>
<td>2.3%</td>
<td>0.1%</td>
<td>-2.6%</td>
<td>-4.0%</td>
<td style="color: red;">-5.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">UK</td>
<td>0.8%</td>
<td>2.0%</td>
<td>-1.2%</td>
<td>-0.3%</td>
<td>-3.1%</td>
<td>-5.3%</td>
<td style="color: red;">-5.9%</td>
</tr>
<tr>
<td class="firstcol">US</td>
<td>3.2%</td>
<td>5.6%</td>
<td>2.2%</td>
<td>2.5%</td>
<td>0.1%</td>
<td>-2.6%</td>
<td style="color: red;">-3.8%</td>
</tr>
</tbody>
</table>
</body></html>

It was hardly a spectacular number for Q1 GDP from EMU although the 0.2% Q/Q gain did beat the expected gain of just 0.1% Q/Q. GDP is rising Yr/Yr for the first time Since Q3 2008 and that is something. France, Italy, the Netherlands [...]

EMU GDP Is On The Mend

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512d.jpg" style="width: 353px; height: 265px; float: left;" align="left"></p>
<p>After stabilizing a bit for a few months, the U.S. foreign
trade deficit broke from its range and deepened in March. The deficit
of $40.4B compared to a little-revised $39.4B during February. The
latest figure roughly matched Consensus expectations for a deficit of
$40.0B. Nevertheless, the latest deficit was the deepest since December
of 2008.</p>
<p>Both imports and exports were strong during March. The 3.1%
increase in total imports reflected a 10.0% increase (72.4% y/y) in
imports of petroleum products as crude oil prices rose m/m to $74.32
per barrel. The economic recovery in the U.S. also caused the quantity
of petroleum imports to jump 7.4% m/m, even though the level remains
down 2.5% y/y following declines during the prior several years.</p>
<p>Non-oil imports again reflected the economic recovery with a
2.6% gain which was the seventh solid increase in the last nine months.
These gains followed a 17.7% decline for all of last year. The increase
has been led by imports of automotive vehicles &amp; parts which
surged by nearly two-thirds y/y. Real nonauto consumer goods imports
rose another 1.1% m/m (9.1% y/y) and capital goods imports jumped 1.2%
m/m (16.7% y/y). Finally, services imports slipped 1.3% (+9.1% y/y).
U.S. travels abroad increased 1.1% (4.5% y/y) while passenger fares
surged 4.8% (5.6% y/y). "Other" transportation services imports jumped
for the seventh consecutive month, posting a 3.8% increase (18.1% y/y).</p>
<p>Nominal exports jumped 3.2% (20.4% y/y) due to a 3.4% surge
(16.9% y/y) in real merchandise exports. That was the strongest y/y
gain since 1997. Real exports of non-auto consumer goods led the
strength with a 5.7% jump (11.0% y/y). Real capital goods exports
followed with a 1.2% gain (10.8% y/y) and auto exports nudged up by
0.4% (53.5% y/y). Exports of services rose 0.9% (11.9% y/y) with a
12.8% y/y gain in travel.</p>
<p>By country, the trade deficit with mainland China held roughly
stable at $16.9B, roughly half its peak of $27.9B in October of 2008.
Trade with China surged as exports jumped by roughly 33% y/y and
imports rose by a lesser 14.7%. With Japan, the trade deficit deepened
to $5.2B as imports surged by roughly 50%, due to the U.S. economic
recovery, and exports rose 14.6% y/y. With the European Union, the
trade deficit increased to $7.1B as exports rose 6.0% y/y but imports
from Europe surged 15.8%.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE01/@EE01.HTM">Foreign
Trade&nbsp;</a></b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">U.S. Trade Deficit</td>
<td>$40.4B</td>
<td>$39.4B</td>
<td>$37.0B</td>
<td>$28.8B (3/09)</td>
<td>$378.6B</td>
<td>$695.9B</td>
<td>$701.4B</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports - Goods
&amp; Services (m/m)</td>
<td>3.2%</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>20.4%</td>
<td>-14.9%</td>
<td>11.2%</td>
<td>13.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports - Goods
&amp; Services</td>
<td>3.1</td>
<td>1.6</td>
<td>-1.8</td>
<td>24.2</td>
<td>-23.4</td>
<td>7.6</td>
<td>6.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>10.0</td>
<td>1.9</td>
<td>-3.6</td>
<td>72.4</td>
<td>-44.1</td>
<td>37.0</td>
<td>9.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>2.6</td>
<td>1.1</td>
<td>-1.8</td>
<td>20.4</td>
<td>-21.0</td>
<td>1.5</td>
<td>4.8</td>
</tr>
</tbody>
</table>
</body></html>

After stabilizing a bit for a few months, the U.S. foreign trade deficit broke from its range and deepened in March. The deficit of $40.4B compared to a little-revised $39.4B during February. The latest figure roughly matched [...]

U.S. Trade Deficit Deepens With Higher Oil Prices & Economic Recovery

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<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Bureau of Labor Statistics reported that labor market
conditions remained in a state of flux during March. The latest Job
Openings &amp; Labor Turnover Survey (JOLTS) indicated that the <b>job
openings rate </b>held steady at 2.0% with a downwardly revised
February reading. <i>The job openings rate is the number of job
openings on the last business day of the month as a percent of total
employment plus job openings. </i>Job availability fell 1.8%
after the downwardly revised February decline. Nevertheless, the latest
availability level was improved by 0.9% year-to-year. Last year job
availability fell 17.8% following a 29.7% decline during 2008. The
series dates back to December 2000.</p>
<p>Improvement in the government sector's job openings rate
compensated for a modest deterioration in the private-sector during the
last two months and returned it to the highest level since early last
year. The private-sector job openings rate was steady following modest
improvement in January. That reflected fewer professional, education
&amp; health services jobs but the number of factory and retail
trade jobs grew strongly.</p>
<p>The <b>hires rate</b> moved up modestly to its
highest since late-2008. <i>The hires rate is the number of
hires during the month divided by employment.</i>The level of
hiring rose 10% from its low in June of last year. The gain was led by
a 48.5% rise in hiring in the construction sector and a 28.6% rise in
factory jobs.</p>
<p>The job separations rate remained at the series' low of 3.1%
with the actual number of separations off 14.7% year-to-year. <i>Separations
include quits, layoffs, discharges, and other separations as well as
retirements. </i>The <b>layoff &amp; discharge rate </b>alone
remained at the nineteen-month low of 1.4% as the actual number of
layoffs fell 25.7% y/y after the 12.6% increase during 2009.</p>
<p>The JOLTS survey dates only to December 2000 but has followed
the movement in nonfarm payrolls, though the actual correlation between
the two series is low. A description of the Jolts survey and the latest
release from the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/pdf/jolts.pdf">here</a>
and the figures are available in Haver's <b>USECON</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS (Job Openings &amp; Labor
&nbsp;Turnover Survey)</a></b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>March '09</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td colspan="8"><b>Job Openings, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>2.0</td>
<td>2.0</td>
<td>2.2</td>
<td>2.0</td>
<td>1.9</td>
<td>2.2</td>
<td>3.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>2,694</td>
<td>2,647</td>
<td>2,854</td>
<td>2,671</td>
<td>2,531</td>
<td>3,078</td>
<td>4,378</td>
</tr>
<tr class="odd">
<td colspan="8"><b>Hires, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>3.3</td>
<td>3.1</td>
<td>3.2</td>
<td>3.0</td>
<td>37.3</td>
<td>41.1</td>
<td>45.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>4,242</td>
<td>4,011</td>
<td>4,087</td>
<td>4,095</td>
<td>48,649</td>
<td>56,082</td>
<td>63,234</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol"><b>Layoffs
&amp;
Discharges, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>1.4</td>
<td>1.4</td>
<td>1.5</td>
<td>1.9</td>
<td>20.7</td>
<td>17.7</td>
<td>16.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>1,830</td>
<td>1,823</td>
<td>1,953</td>
<td>2,462</td>
<td>27,683</td>
<td>24,589</td>
<td>22,606</td>
</tr>
</tbody>
</table>
</body></html>

The Bureau of Labor Statistics reported that labor market conditions remained in a state of flux during March. The latest Job Openings & Labor Turnover Survey (JOLTS) indicated that the job openings rate held steady at 2.0% with a [...]

JOLTS: U.S. Job Openings Steady But Hires & Fires Diverge

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<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Bureau of Labor Statistics reported that labor market
conditions remained in a state of flux during March. The latest Job
Openings &amp; Labor Turnover Survey (JOLTS) indicated that the <b>job
openings rate </b>held steady at 2.0% with a downwardly revised
February reading. <i>The job openings rate is the number of job
openings on the last business day of the month as a percent of total
employment plus job openings. </i>Job availability fell 1.8%
after the downwardly revised February decline. Nevertheless, the latest
availability level was improved by 0.9% year-to-year. Last year job
availability fell 17.8% following a 29.7% decline during 2008. The
series dates back to December 2000.</p>
<p>Improvement in the government sector's job openings rate
compensated for a modest deterioration in the private-sector during the
last two months and returned it to the highest level since early last
year. The private-sector job openings rate was steady following modest
improvement in January. That reflected fewer professional, education
&amp; health services jobs but the number of factory and retail
trade jobs grew strongly.</p>
<p>The <b>hires rate</b> moved up modestly to its
highest since late-2008. <i>The hires rate is the number of
hires during the month divided by employment.</i>The level of
hiring rose 10% from its low in June of last year. The gain was led by
a 48.5% rise in hiring in the construction sector and a 28.6% rise in
factory jobs.</p>
<p>The job separations rate remained at the series' low of 3.1%
with the actual number of separations off 14.7% year-to-year. <i>Separations
include quits, layoffs, discharges, and other separations as well as
retirements. </i>The <b>layoff &amp; discharge rate </b>alone
remained at the nineteen-month low of 1.4% as the actual number of
layoffs fell 25.7% y/y after the 12.6% increase during 2009.</p>
<p>The JOLTS survey dates only to December 2000 but has followed
the movement in nonfarm payrolls, though the actual correlation between
the two series is low. A description of the Jolts survey and the latest
release from the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/pdf/jolts.pdf">here</a>
and the figures are available in Haver's <b>USECON</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS
(Job Openings &amp; Labor
&nbsp;Turnover Survey)</a></b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>March '09</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td colspan="8"><b>Job Openings, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>2.0</td>
<td>2.0</td>
<td>2.2</td>
<td>2.0</td>
<td>1.9</td>
<td>2.2</td>
<td>3.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>2,694</td>
<td>2,647</td>
<td>2,854</td>
<td>2,671</td>
<td>2,531</td>
<td>3,078</td>
<td>4,378</td>
</tr>
<tr class="odd">
<td colspan="8"><b>Hires, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>3.3</td>
<td>3.1</td>
<td>3.2</td>
<td>3.0</td>
<td>37.3</td>
<td>41.1</td>
<td>45.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>4,242</td>
<td>4,011</td>
<td>4,087</td>
<td>4,095</td>
<td>48,649</td>
<td>56,082</td>
<td>63,234</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol"><b>Layoffs
&amp;
Discharges, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>1.4</td>
<td>1.4</td>
<td>1.5</td>
<td>1.9</td>
<td>20.7</td>
<td>17.7</td>
<td>16.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>1,830</td>
<td>1,823</td>
<td>1,953</td>
<td>2,462</td>
<td>27,683</td>
<td>24,589</td>
<td>22,606</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Trade Deficit Deepens With
Higher Oil Prices &amp; Economic Recovery</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> May 12, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512d.jpg" style="width: 353px; height: 265px; float: left;" align="left"></p>
<p>After stabilizing a bit for a few months, the U.S. foreign
trade deficit broke from its range and deepened in March. The deficit
of $40.4B compared to a little-revised $39.4B during February. The
latest figure roughly matched Consensus expectations for a deficit of
$40.0B. Nevertheless, the latest deficit was the deepest since December
of 2008.</p>
<p>Both imports and exports were strong during March. The 3.1%
increase in total imports reflected a 10.0% increase (72.4% y/y) in
imports of petroleum products as crude oil prices rose m/m to $74.32
per barrel. The economic recovery in the U.S. also caused the quantity
of petroleum imports to jump 7.4% m/m, even though the level remains
down 2.5% y/y following declines during the prior several years.</p>
<p>Non-oil imports again reflected the economic recovery with a
2.6% gain which was the seventh solid increase in the last nine months.
These gains followed a 17.7% decline for all of last year. The increase
has been led by imports of automotive vehicles &amp; parts which
surged by nearly two-thirds y/y. Real nonauto consumer goods imports
rose another 1.1% m/m (9.1% y/y) and capital goods imports jumped 1.2%
m/m (16.7% y/y). Finally, services imports slipped 1.3% (+9.1% y/y).
U.S. travels abroad increased 1.1% (4.5% y/y) while passenger fares
surged 4.8% (5.6% y/y). "Other" transportation services imports jumped
for the seventh consecutive month, posting a 3.8% increase (18.1% y/y).</p>
<p>Nominal exports jumped 3.2% (20.4% y/y) due to a 3.4% surge
(16.9% y/y) in real merchandise exports. That was the strongest y/y
gain since 1997. Real exports of non-auto consumer goods led the
strength with a 5.7% jump (11.0% y/y). Real capital goods exports
followed with a 1.2% gain (10.8% y/y) and auto exports nudged up by
0.4% (53.5% y/y). Exports of services rose 0.9% (11.9% y/y) with a
12.8% y/y gain in travel.</p>
<p>By country, the trade deficit with mainland China held roughly
stable at $16.9B, roughly half its peak of $27.9B in October of 2008.
Trade with China surged as exports jumped by roughly 33% y/y and
imports rose by a lesser 14.7%. With Japan, the trade deficit deepened
to $5.2B as imports surged by roughly 50%, due to the U.S. economic
recovery, and exports rose 14.6% y/y. With the European Union, the
trade deficit increased to $7.1B as exports rose 6.0% y/y but imports
from Europe surged 15.8%.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE01/@EE01.HTM">Foreign
Trade&nbsp;</a></b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">U.S. Trade Deficit</td>
<td>$40.4B</td>
<td>$39.4B</td>
<td>$37.0B</td>
<td>$28.8B (3/09)</td>
<td>$378.6B</td>
<td>$695.9B</td>
<td>$701.4B</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports - Goods
&amp; Services (m/m)</td>
<td>3.2%</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>20.4%</td>
<td>-14.9%</td>
<td>11.2%</td>
<td>13.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports - Goods
&amp; Services</td>
<td>3.1</td>
<td>1.6</td>
<td>-1.8</td>
<td>24.2</td>
<td>-23.4</td>
<td>7.6</td>
<td>6.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>10.0</td>
<td>1.9</td>
<td>-3.6</td>
<td>72.4</td>
<td>-44.1</td>
<td>37.0</td>
<td>9.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>2.6</td>
<td>1.1</td>
<td>-1.8</td>
<td>20.4</td>
<td>-21.0</td>
<td>1.5</td>
<td>4.8</td>
</tr>
</tbody>
</table>
<span id="articletitle">EMU GDP Is On The Mend</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> May 12, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100512g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>It was hardly a spectacular number for Q1 GDP from EMU
although the 0.2% Q/Q gain did beat the expected gain of just 0.1% Q/Q.
GDP is rising Yr/Yr for the first time Since Q3 2008 and that is
something. France, Italy, the Netherlands and Germany have positive
Yr/Yr gains for GDP among the early GDP reporters. The UK and Greece
are still showing Yr/Yr GDP declines. Germany and France show the
strongest EU/EMU Yr/Yr gains among those that have reported at 1.5% and
1.2%, respectively. Both are short of the US mark of 2.5%. The US
recovery seems to have gathered pace while in Europe growth rates are
still struggling to cobble together positive numbers.</p>
<p>Obviously in the current situation we are eager to see results
from Spain, Portugal and Ireland, but they have not yet reported. This
morning Spain did announce some further budget cuts and Portugal said
in was in the midst of planning more cuts. Greece&#8217;s GDP is still
falling but at least the pace of decline did not worsen this quarter.</p>
<p>Gold is making new highs on the expectation that the European
debt bomb will explode. But what we see instead is evidence that, at
least to start things out, the key problem-countries are taking some of
the needed steps toward austerity and success. Spain and Portugal seem
to be using the new EMU financial back-stop to good purpose by using
its protective influence as a chance to make some much-needed changes.
I think that this sort of effort flies in the face of the gold market
speculation. Greece remains a problem issue, since its people are not
really on board for what its politicians signed them up for. But that
could change when the Greek people realize that there is no &#8216;plan B&#8217;
for them. They are at the end of their rope with this bailout offer.
And, if they are the only problem country in EMU and the rest get their
act in order, I don&#8217;t see how an intransigent Greece, by itself, drives
gold prices higher &#8211; certainly not form here.</p>
<p>Today the Euro-Area also released March industrial output
figures. MFG IP grew at a 14.8% pace in Q1 in the Zone. In the quarter
output gains were led by France Italy and Germany, in that order,
followed by the UK at 4.9% and then Spain at -4.3%. Among these five
large EU countries only Spain showed a quarterly drop in IP, but all
had Yr/Yr increases from March of one year ago; the UK&#8217;s 3.3% Yr-o-Yr
gain from March of 2009 is the smallest gain of the lot on that basis.</p>
<p>That's quit a bit better than the GDP report seems. Of course,
part of the problem is that Europe&#8217;s growth is substantially export-led
and that MFG is pulling the whole economy ahead. The consumer sector
remains weak and the services sector ahs not gotten into gear.
Consumers remain the largest piece of the economy so the bulging IP
numbers make for great headlines but the &#8216;bulge&#8217; is all &#8216;steroids&#8217;
since it takes consumer participation and job growth to make great
economic growth (GDP). Europe is not there yet. We conclude these
points about sector participations from the other monthly data we have
in hand since Euro-GDP reports come in a &#8216;flash&#8217; format without any
detail. The detail will be filled in later. We are all interested in
that detail, about sectors and about member by member economic
performance. We have yet to see it.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> <b>Euro-Area
And Main G-10 Country GDP Results</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Quarter over
quarter-Saar</td>
<td colspan="4">Year/Year</td>
</tr>
<tr>
<td class="firstcol">GDP</td>
<td>Q1-10</td>
<td>Q4-09</td>
<td>Q3-09</td>
<td>Q1-10</td>
<td>Q4-09</td>
<td>Q3-09</td>
<td>Q2-09</td>
</tr>
<tr class="grey1">
<td class="firstcol">EMU-15</td>
<td>0.8%</td>
<td>0.2%</td>
<td>1.6%</td>
<td>0.5%</td>
<td>-2.2%</td>
<td>-4.1%</td>
<td>-4.9%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>0.5%</td>
<td>2.2%</td>
<td>1.0%</td>
<td>1.2%</td>
<td>-0.4%</td>
<td>-2.6%</td>
<td>-3.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany</td>
<td>0.6%</td>
<td>0.7%</td>
<td>2.9%</td>
<td>1.5%</td>
<td>-2.2%</td>
<td>-4.8%</td>
<td>-5.8%</td>
</tr>
<tr>
<td class="firstcol">Greece</td>
<td>-3.1%</td>
<td>-3.1%</td>
<td>-1.9%</td>
<td>-2.3%</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-2.5%</td>
<td style="color: red;">-1.9%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy</td>
<td>2.1%</td>
<td>-0.2%</td>
<td>1.5%</td>
<td>0.6%</td>
<td>-2.8%</td>
<td>-4.7%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">The Netherlands</td>
<td>1.0%</td>
<td>1.5%</td>
<td>2.3%</td>
<td>0.1%</td>
<td>-2.6%</td>
<td>-4.0%</td>
<td style="color: red;">-5.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">UK</td>
<td>0.8%</td>
<td>2.0%</td>
<td>-1.2%</td>
<td>-0.3%</td>
<td>-3.1%</td>
<td>-5.3%</td>
<td style="color: red;">-5.9%</td>
</tr>
<tr>
<td class="firstcol">US</td>
<td>3.2%</td>
<td>5.6%</td>
<td>2.2%</td>
<td>2.5%</td>
<td>0.1%</td>
<td>-2.6%</td>
<td style="color: red;">-3.8%</td>
</tr>
</tbody>
</table>
</body></html>

Louise Curley

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100511i.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100511j.jpg" style="width: 312px; height: 265px;"></p>
<p>A number of economic variables in the Chinese economy have
been updated for April over the past few days. Although still
relatively low, 2.8% in April, the inflation rate based on the Consumer
Price Index has been rising steadily. In September of last year the
Consumer Price index was declining at rate of almost 1% from the
previous year. Inflation at the Producer level is considerably higher.
In April, the year to year percent change in the Producer Price Index
was 6.8%, up from 5.9% in March and from -6.99% in September of last
year. The year to year changes in the CPI and PPI are shown in the
first chart.
</p>
<p>Although the year to year increase in retail trade in April of
18.5%, up from 18.0% in March, did not top February's 22.1% increase,
the rate of growth in retail sales continues at relatively high levels
historically as can be seen in the second chart. This chart also
includes the year to year percent changes in Industrial Production.
After an almost uninterrupted increase in the growth of production from
January 2009 when the year to year increase was 3.8% to January 2010
when the year to year increase was 20.7% growth appears to be
decelerating. In April it was 17.8%. While the year to year percent
increases in industrial production have only recently begun to
decelerate, the year to year increase in fixed investments has been on
a downtrend since mid 2009 as shown in the third chart.
</p>
<p>The final piece of information on China's economy recently
released concerns the balance of trade in goods. In March, China
recorded the first deficit in its balance of trade in goods since
February, 2004. Even then a trade deficit for China was unusual. One
has to go back to the early nineties to find more than an occasional
deficit in China's trade in goods. The deficit was the result of a drop
in exports and a surge in imports principally of raw materials. Exports
recovered in April and imports declined with the result that a surplus
on trade of $9.6 billion US was recorded as can be seen in the fourth
chart. </p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100507k.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100511l.jpg" style="width: 312px; height: 265px;">
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>CHINA</b></th>
<th scope="col"><b>Apr 10&nbsp;</b></th>
<th scope="col"><b>Mar 10&nbsp;</b></th>
<th scope="col"><b>Feb 10&nbsp;</b></th>
<th scope="col"><b>Jan 10</b></th>
<th scope="col"><b>Dec 09</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Sep 09</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Producer Price
Index (Y/Y % chg)</td>
<td>6.80</td>
<td>5.90</td>
<td>5.40</td>
<td>4.30</td>
<td>1.70</td>
<td>-2.08</td>
<td>-5.80</td>
<td>-6.99</td>
</tr>
<tr>
<td class="firstcol">Consumer Price
Index (Y/Y % chg)</td>
<td>2.8</td>
<td>2.4</td>
<td>2.7</td>
<td>1.5</td>
<td>1.9</td>
<td>0.6</td>
<td>-0.5</td>
<td>-0.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Trade (Y/Y
% chg)</td>
<td>18.5</td>
<td>18.0</td>
<td>22.1</td>
<td>14.0</td>
<td>12.5</td>
<td>15.8</td>
<td>16.2</td>
<td>15.5</td>
</tr>
<tr>
<td class="firstcol">Industrial
Production (Y/Y % chg)</td>
<td>17.80</td>
<td>18.10</td>
<td>20.69</td>
<td>20.69</td>
<td>18.50</td>
<td>19.20</td>
<td>16.10</td>
<td>13.90</td>
</tr>
<tr class="odd">
<td class="firstcol">Investment in
Fixed Assets (Y/Y % chg)</td>
<td>26.1</td>
<td>26.4</td>
<td>26.6</td>
<td>28.6</td>
<td>30.5</td>
<td>32.1</td>
<td>33.1</td>
<td>33.3</td>
</tr>
<tr>
<td class="firstcol">Balance of Trade
in Goods (Bil US$)</td>
<td>9.6</td>
<td>-3.1</td>
<td>9.6</td>
<td>12.0</td>
<td>10.7</td>
<td>12.5</td>
<td>14.7</td>
<td>13.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports of Goods
(Bil US$)</td>
<td>123.9</td>
<td>118.7</td>
<td>129.6</td>
<td>114.2</td>
<td>123.3</td>
<td>107.9</td>
<td>106.2</td>
<td>103.7</td>
</tr>
<tr>
<td class="firstcol">Imports of Goods
(Bil US$)</td>
<td>114.3</td>
<td>121.8</td>
<td>120.0</td>
<td>102.2</td>
<td>112.6</td>
<td>95.4</td>
<td>91.5</td>
<td>90.2</td>
</tr>
</tbody>
</table>
</body></html>

A number of economic variables in the Chinese economy have been updated for April over the past few days. Although still relatively low, 2.8% in April, the inflation rate based on the Consumer Price Index has been rising steadily. In [...]

A Potpourri Of April Data For China

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100510g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>After a jackrabbit jump the OECD trend restored Leading
Economic indicators are slowing their pace. Still, viewed over six
months which is the OECD&#8217;s preferred way of using them, the grow rates
across the OECD region remain quite strong, Japan is even accelerating
to the second best growth rate in the table. Still, all rates decay
over three-months compared to six months.</p>
<p>The challenge to growth, however, is for the period ahead.
Evidence is that China is slowing. The Greek crisis and its knock-on
effects damaged Europe and have more permanently helped to re-shape
Europe&#8217;s political power structure.</p>
<p>Now a new support package is in place for Greece and a one
trillion dollar backstop for Europe&#8217;s laggards has been set up. The ECB
is supporting this with bond purchases and the Fed has reactivated its
swap lines to help. How much will these new actions compensate for the
damage that came before them? How weak will China actually be? And how
much if at all will the US economy and its financial markets be damaged
by its one-off (?) intra-day thousand point drop in the DJIA from last
week? Investing dollars, yen and euros want to know.</p>
<p>As of March things look good across the OECD area. The most
up-to-date economic data from the US have been very upbeat. Europe&#8217;s
most recent readings have been good as well, but the new investor
confidence reading from Sentix turned sharply and decisively into
negative territory.</p>
<p>Nonetheless it&#8217;s a good thing to have the economies hit by
these adverse forces while they are gaining momentum. All the trends
will bear watching. Upward momentum bolstered with these new pushes by
policymakers yet may carry the day.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="5" scope="col"><b>OECD
Trend-restored leading Indicators</b> </th>
</tr>
</thead>
<tbody>
<tr style="font-weight: bold;" class="even">
<td colspan="5" class="firstcol">Growth progression-SAAR</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD</td>
<td style="color: red;">5.6%</td>
<td style="color: red;">7.3%</td>
<td>10.2%</td>
<td style="color: red;">-11.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD7</td>
<td style="color: red;">6.0%</td>
<td style="color: red;">7.8%</td>
<td>10.5%</td>
<td style="color: red;">-12.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Ezone</td>
<td style="color: red;">2.9%</td>
<td style="color: red;">5.1%</td>
<td>9.4%</td>
<td style="color: red;">-11.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Japan</td>
<td style="color: red;">8.0%</td>
<td>9.1%</td>
<td>8.8%</td>
<td style="color: red;">-14.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD US</td>
<td style="color: red;">8.4%</td>
<td style="color: red;">9.7%</td>
<td>11.5%</td>
<td style="color: red;">-12.8%</td>
</tr>
<tr style="font-weight: bold;">
<td colspan="5" class="firstcol">Six month
readings at
6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD</td>
<td style="color: red;">7.3%</td>
<td>13.1%</td>
<td>-10.8%</td>
<td style="color: red;">-11.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD7</td>
<td style="color: red;">7.8%</td>
<td>13.3%</td>
<td><span style="color: red;">-13.1%</span></td>
<td style="color: red;">-11.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Eur</td>
<td style="color: red;">5.1%</td>
<td>13.8%</td>
<td>-9.0%</td>
<td style="color: red;">-13.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Japan</td>
<td>9.1%</td>
<td>8.6%</td>
<td style="color: red;">-18.1%</td>
<td style="color: red;">-10.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD US</td>
<td style="color: red;">9.7%</td>
<td>13.4%</td>
<td style="color: red;">-14.6%</td>
<td style="color: red;">-11.1%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol"><span style="color: red; font-weight: bold;">Slowdowns</span>
indicated by BOLD RED</td>
</tr>
</tbody>
</table>
</body></html>

After a jackrabbit jump the OECD trend restored Leading Economic indicators are slowing their pace. Still, viewed over six months which is the OECD’s preferred way of using them, the grow rates across the OECD region remain quite [...]

OECD LEIs Continue To Advance

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

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Charts of the Week: Tariff Truce, Tenuous Trust

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

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

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

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

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

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

250501H20.jpg

250501I20.jpg

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

U.S. Light Vehicle Sales Fall in April

250501J5.jpg

250501K5.jpg

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

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

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

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

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

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

250501L5.jpg

250501M5.jpg

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

U.S. ISM Manufacturing Index Indicates Contraction in April

Winnie Tapasanun

250501N.jpg

250501O.jpg

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

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

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

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

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

250501P.jpg

250501Q.jpg

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

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

Carol Stone, CBE

250501A8.jpg

250501B8.jpg

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

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

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

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

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

250501C8.jpg

250501D8.jpg

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

Economy in Brief: May 2010

Jump to:

U.S. Initial Jobless Insurance Claims Slip To Low-End Of Recent Range

U.S. Initial Jobless Insurance Claims Slip To Low-End Of Recent Range

EMU GDP Is On The Mend

U.S. Trade Deficit Deepens With Higher Oil Prices & Economic Recovery

JOLTS: U.S. Job Openings Steady But Hires & Fires Diverge

JOLTS: U.S. Job Openings Steady But Hires & Fires Diverge

A Potpourri Of April Data For China

OECD LEIs Continue To Advance