Tom Moeller

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April has been a firm month for energy prices and a gallon of regular
gasoline averaged its highest price since October 2008. Last
week, it remained near the prior week's high of $2.85 which was up by
77% since the December, 2008 low. Yesterday, the spot market price for
a gallon of regular gasoline held onto its level late last week. The
figures are reported by the U.S. Department of Energy and can be found
in Haver's WEEKLY &amp; DAILY databases.
Crude oil costs slipped last week but an upward trend has been
behind the rise in gasoline prices. The price for a barrel of light
sweet crude (WTI) again fell slightly last week to $83.04 but for the
month averaged $84.22 versus $81.01 during March. Prices remain up by
two-and-one half times the 2008 low.
A firming of demand has helped energy prices move higher.
Weekly gasoline usage was up 1.1% last week versus one year ago and
that compares with a 3.0% decline in early-February. The demand for
residual fuel oil jumped 10.5% but distillate demand fell 4.1% y/y.
Inventories of crude oil and petroleum products rose slightly last
month but were down slightly from one year ago. That contrasts with a
strong inventory accumulation into September of last year.
U.S. natural gas prices were steady last week at $4.00 per
mmbtu (+15.8% y/y). Prices reached a high of $6.50 early in January.
Nevertheless, prices remained nearly double the September low.
The energy price data can be found in Haver's WEEKLY
database while the daily figures are in DAILY.
The gasoline demand figures are in OILWKLY.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427h.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"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">04/26/10</th>
<th scope="col">04/19/10</th>
<th scope="col">04/12/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.85</td>
<td>2.86</td>
<td>2.86</td>
<td>39.0%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>83.04</td>
<td>84.60</td>
<td>85.97</td>
<td>73.6%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>
</body></html>

April has been a firm month for energy prices and a gallon of regular gasoline averaged its highest price since October 2008. Last week, it remained near the prior week's high of $2.85 which was up by 77% since the December, 2008 low. [...]

U.S. Petroleum Prices Maintain Their Higher Level

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427b.jpg" style="width: 312px; height: 265px;">
Earlier improvement in home prices continued to weaken during
February. Seasonally adjusted, the Case-Shiller Home Price Index
slipped 0.1% and continued its sideways pattern since September.
Nevertheless, the 0.7% increase versus last February compares to a
19.0% y/y rate of decline at its worst, roughly one year ago.
The narrower 10 City Composite Index rose a seasonally
adjusted 0.1% (1.5% y/y). Over the last year, prices rose 1.5% versus a
19.4% decline at its worst.
The performance of home prices continues to vary around the
country. During February, the 12-month gain in prices was strongest in
the West. Prices in Washington D.C. and Dallas rose moderately but
widespread declines were logged elsewhere.
The Case-Shiller home price series are value-weighted, i.e., a
greater index weight is assigned to more expensive homes. The
S&amp;P/Case-Shiller home price series can be found in Haver's USECON
database and the city data highlighted below is in the REGIONAL
database.
Achieving Fiscal Sustainability is the
title of this morning's speech by Fed Chairman Ben S. Bernanke and it
can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20100427a.htm">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427d.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">S&amp;P/Case-Shiller
Home Price Index (SA)</th>
<th scope="col">February m/m</th>
<th scope="col">January m/m</th>
<th scope="col">December m/m</th>
<th scope="col">Feb. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">20 City Composite Index</td>
<td>-0.1</td>
<td>0.3</td>
<td>0.3</td>
<td>0.7</td>
<td>-13.3</td>
<td>-15.7</td>
<td>-3.8</td>
</tr>
<tr>
<td colspan="8"> Regional
Indicators</td>
</tr>
<tr class="odd">
<td class="firstcol">
Atlanta</td>
<td>-0.9</td>
<td>-0.5</td>
<td>0.0</td>
<td>-0.9</td>
<td>-11.6</td>
<td>-8.5</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Boston</td>
<td>-0.5</td>
<td>0.3</td>
<td>0.7</td>
<td>1.8</td>
<td>-4.9</td>
<td>-5.7</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Chicago</td>
<td>-1.0</td>
<td>-0.8</td>
<td>-0.7</td>
<td>-2.9</td>
<td>-14.2</td>
<td>-10.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Dallas</td>
<td>-1.4</td>
<td>-0.2</td>
<td>0.1</td>
<td>2.7</td>
<td>-2.3</td>
<td>-3.3</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">
Denver</td>
<td>-0.2</td>
<td>-0.1</td>
<td>-0.0</td>
<td>3.7</td>
<td>-2.8</td>
<td>-4.9</td>
<td>-1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Los Angeles</td>
<td>0.2</td>
<td>1.9</td>
<td>1.2</td>
<td>5.4</td>
<td>-15.4</td>
<td>-24.2</td>
<td>-5.2</td>
</tr>
<tr class="odd">
<td class="firstcol">
New York</td>
<td>-0.2</td>
<td>-0.2</td>
<td>-0.4</td>
<td>-4.1</td>
<td>-9.8</td>
<td>-7.4</td>
<td>-2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">
San Francisco</td>
<td>0.4</td>
<td>0.5</td>
<td>0.8</td>
<td>12.0</td>
<td>-18.4</td>
<td>-24.3</td>
<td>-4.5</td>
</tr>
</tbody>
</table>
</body></html>

Earlier improvement in home prices continued to weaken during February. Seasonally adjusted, the Case-Shiller Home Price Index slipped 0.1% and continued its sideways pattern since September. Nevertheless, the 0.7% increase versus [...]

Case-Shiller Home Price IndexContinues Sideways Movement

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Earlier improvement in home prices continued to weaken during
February. Seasonally adjusted, the Case-Shiller Home Price Index
slipped 0.1% and continued its sideways pattern since September.
Nevertheless, the 0.7% increase versus last February compares to a
19.0% y/y rate of decline at its worst, roughly one year ago.
The narrower 10 City Composite Index rose a seasonally
adjusted 0.1% (1.5% y/y). Over the last year, prices rose 1.5% versus a
19.4% decline at its worst.
The performance of home prices continues to vary around the
country. During February, the 12-month gain in prices was strongest in
the West. Prices in Washington D.C. and Dallas rose moderately but
widespread declines were logged elsewhere.
The Case-Shiller home price series are value-weighted, i.e., a
greater index weight is assigned to more expensive homes. The
S&amp;P/Case-Shiller home price series can be found in Haver's USECON
database and the city data highlighted below is in the REGIONAL
database.
Achieving Fiscal Sustainability is the
title of this morning's speech by Fed Chairman Ben S. Bernanke and it
can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20100427a.htm">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427d.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">S&amp;P/Case-Shiller
Home Price Index (SA)</th>
<th scope="col">February m/m</th>
<th scope="col">January m/m</th>
<th scope="col">December m/m</th>
<th scope="col">Feb. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">20 City Composite Index</td>
<td>-0.1</td>
<td>0.3</td>
<td>0.3</td>
<td>0.7</td>
<td>-13.3</td>
<td>-15.7</td>
<td>-3.8</td>
</tr>
<tr>
<td colspan="8"> Regional
Indicators</td>
</tr>
<tr class="odd">
<td class="firstcol">
Atlanta</td>
<td>-0.9</td>
<td>-0.5</td>
<td>0.0</td>
<td>-0.9</td>
<td>-11.6</td>
<td>-8.5</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Boston</td>
<td>-0.5</td>
<td>0.3</td>
<td>0.7</td>
<td>1.8</td>
<td>-4.9</td>
<td>-5.7</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Chicago</td>
<td>-1.0</td>
<td>-0.8</td>
<td>-0.7</td>
<td>-2.9</td>
<td>-14.2</td>
<td>-10.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">
Dallas</td>
<td>-1.4</td>
<td>-0.2</td>
<td>0.1</td>
<td>2.7</td>
<td>-2.3</td>
<td>-3.3</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">
Denver</td>
<td>-0.2</td>
<td>-0.1</td>
<td>-0.0</td>
<td>3.7</td>
<td>-2.8</td>
<td>-4.9</td>
<td>-1.7</td>
</tr>
<tr class="odd">
<td class="firstcol">
Los Angeles</td>
<td>0.2</td>
<td>1.9</td>
<td>1.2</td>
<td>5.4</td>
<td>-15.4</td>
<td>-24.2</td>
<td>-5.2</td>
</tr>
<tr class="odd">
<td class="firstcol">
New York</td>
<td>-0.2</td>
<td>-0.2</td>
<td>-0.4</td>
<td>-4.1</td>
<td>-9.8</td>
<td>-7.4</td>
<td>-2.8</td>
</tr>
<tr class="odd">
<td class="firstcol">
San Francisco</td>
<td>0.4</td>
<td>0.5</td>
<td>0.8</td>
<td>12.0</td>
<td>-18.4</td>
<td>-24.3</td>
<td>-4.5</td>
</tr>
</tbody>
</table>
U.S. Petroleum Prices Maintain
Their Higher Level 
by <a href="/comment/Moeller.html">Tom
Moeller</a> April 27, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427f.jpg" style="width: 312px; height: 265px;">

April has been a firm month for energy prices and a gallon of regular
gasoline averaged its highest price since October 2008. Last
week, it remained near the prior week's high of $2.85 which was up by
77% since the December, 2008 low. Yesterday, the spot market price for
a gallon of regular gasoline held onto its level late last week. The
figures are reported by the U.S. Department of Energy and can be found
in Haver's WEEKLY &amp; DAILY databases.
Crude oil costs slipped last week but an upward trend has been
behind the rise in gasoline prices. The price for a barrel of light
sweet crude (WTI) again fell slightly last week to $83.04 but for the
month averaged $84.22 versus $81.01 during March. Prices remain up by
two-and-one half times the 2008 low.
A firming of demand has helped energy prices move higher.
Weekly gasoline usage was up 1.1% last week versus one year ago and
that compares with a 3.0% decline in early-February. The demand for
residual fuel oil jumped 10.5% but distillate demand fell 4.1% y/y.
Inventories of crude oil and petroleum products rose slightly last
month but were down slightly from one year ago. That contrasts with a
strong inventory accumulation into September of last year.
U.S. natural gas prices were steady last week at $4.00 per
mmbtu (+15.8% y/y). Prices reached a high of $6.50 early in January.
Nevertheless, prices remained nearly double the September low.
The energy price data can be found in Haver's WEEKLY
database while the daily figures are in DAILY.
The gasoline demand figures are in OILWKLY.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427g.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427h.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"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">04/26/10</th>
<th scope="col">04/19/10</th>
<th scope="col">04/12/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.85</td>
<td>2.86</td>
<td>2.86</td>
<td>39.0%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>83.04</td>
<td>84.60</td>
<td>85.97</td>
<td>73.6%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>
U.S. Consumer Confidence Improves
Further 
by <a href="/comment/Moeller.html">Tom
Moeller&nbsp;</a> April 27, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427i.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Improvement in consumers' mood continued this month according
to the Conference Board. Their consumer confidence index rose 10.7% m/m
to 57.9, its highest level since September 2008. The gain handily
outpaced the Consensus expectation for a rise to 53.5. During the last
ten years there has been an 86% correlation between the level of
consumer confidence and the y/y change in real consumer spending. The
Conference Board data can be found in Haver's CBDB
database.
Consumers' assessment of the present situation jumped 13.5%
m/m after a similar March rise, off a near-record low. Jobs were seen
as hard to get by a reduced 45.0% of respondents but jobs were seen as
plentiful by only 4.8%. That was up just slightly from the series'
historic low reached in November. Also improved was the percentage of
respondents who saw business conditions as good. The percentage of
consumers who thought business conditions were bad fell to 40.2%, off
ten points from its peak during the recession.
The expectations component of confidence also improved m/m to
its highest level just before the recession. Improved expectations for
employment led the gain but expectations for business conditions and
income rose just slightly. Expectations for the inflation rate in
twelve months slipped to 5.3% and that remained down from last year's
high of 7.7%. Interest rates in twelve months were expected to be
higher by an increased 56.3%, the highest since 2007. A much-reduced
12.2% expected rates to fall. An increased 35.0% of respondents
expected stock prices to rise. That was near the recent high.
A reduced 2.0% of those surveyed plan to buy a home during the
next six months. An improved 27.4% plan to buy a major appliance,
though 30.9% planned to buy one back in 2007. An improved 5.1% plan to
buy an automobile versus 6.0% in 2007 and a greater 2.3% plan to buy a
new one, just off the series' historic low.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427j.jpg" style="width: 312px; height: 265px;"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427k.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">Conference
Board&nbsp;(SA, 1985=100)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y %</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer
Confidence Index</td>
<td>57.9</td>
<td>52.3</td>
<td>46.4</td>
<td>41.9</td>
<td>45.2</td>
<td>57.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>28.6</td>
<td>25.2</td>
<td>21.7</td>
<td>12.2</td>
<td>24.0</td>
<td>69.9</td>
<td>128.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>77.4</td>
<td>70.4</td>
<td>62.9</td>
<td>51.8</td>
<td>59.3</td>
<td>50.0</td>
<td>86.4</td>
</tr>
</tbody>
</table>
An Assortment Of Consumer
Confidence Indicators 
by <a href="/comment/Curley.html">Louise
Curley</a> April 27, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427l.jpg" style="width: 353px; height: 265px;" align="right">France,
Germany, Italy and Switzerland released indicators of consumer
confidence today.&nbsp; The latest data for the Swiss indicator,
the UBS Consumption Indicator, are for March.&nbsp; Those for
Italy, ISAE's consumer survey, and France, INSEE's household survey,
are for April and those for Germany, GfK's consumer climate survey,
May.
After some loss of confidence at the end of last year and
early
this year, due largely to the rise in energy prices, consumer
confidence in Switzerland, Italy and Germany has recovered as can be
seen in the first chart.&nbsp; French consumers, however, have on
balance become more negative, as shown in the second chart.&nbsp;
It should be noted that since its inception in April, 1986, that the
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100427m.jpg" style="width: 353px; height: 265px;" align="right">only
time the non seasonally adjusted French measure of consumer
confidence has reported a positive balance of opinion was during the
period from July 1999 to May 2001, as seen in the second
chart.&nbsp; The average balance of opinion over the whole span is
-18.&nbsp;&nbsp;
 The measures of consumer confidence vary from
country to country.&nbsp; Balances of opinion in German and France,
an index with a base year of 1980 for Italy and a so-called index for
Switzerland.&nbsp; The Swiss indicator has no base year and is an
index in the sense that "it points to, identifies or highlights a
particular trend or condition" (Definition of index, no.3 in Chambers
21st Century Dictionary).&nbsp; One way to judge current values is
to relate them to the average of the data over its history, which is
shown in the last column of the following table.&nbsp; Consumer
confident in Germany at 3.8 in May is above its long term average of
3.3, as is Swiss consumer confidence, which in March was 1.708 compared
with its long term average of 1.501.&nbsp; In April, French
consumer confidence at -37 was well below its long term average of -18
while Italian consumer confidence of 107.7 was&nbsp; moderately
below its long term average of 112.7
(1980=100).&nbsp;&nbsp;&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">May 10&nbsp;</th>
<th scope="col">Apr 10&nbsp;</th>
<th scope="col">Mar 10</th>
<th scope="col">Feb 10</th>
<th scope="col">Jan 10</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Average*</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany: GFK
Consumer Climate % Bal</td>
<td>3.8</td>
<td>3.4</td>
<td>3.2</td>
<td>3.3</td>
<td>3.4</td>
<td>3.6</td>
<td>3.9</td>
<td>3.3</td>
</tr>
<tr class="odd">
<td class="firstcol">France: INSEE
Household Survey</td>
<td>&nbsp;--</td>
<td>-37</td>
<td>-35</td>
<td>-34</td>
<td>-29</td>
<td>-33</td>
<td>-32</td>
<td>-18</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy: ISAE
Consumer Survey1980=100</td>
<td>&nbsp;--</td>
<td>107.7</td>
<td>105.3</td>
<td>107.2</td>
<td>112.1</td>
<td>111.2</td>
<td>111.2</td>
<td>112.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Switzerland: UBS
Consumption Indicator</td>
<td>&nbsp;--</td>
<td>&nbsp;--</td>
<td>1.708</td>
<td>1.201</td>
<td>1.322</td>
<td>1.201</td>
<td>1.279</td>
<td>1.501</td>
</tr>
<tr>
<td class="firstcol" colspan="9">*Average
over the span
of available
data</td>
</tr>
</tbody>
</table>

</body></html>

Case-Shiller Home PriceIndexContinues Sideways Movement

Louise Curley

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100426a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Almost two weeks ago, the Department of Statistics in
Singapore released its flash estimate of first quarter year over the
year growth of the economy of the city state--13.1%. The year to year
growth in the manufacturing sector was estimated at 30.0%, as shown in
the first chart.
Today March data for industrial production and five industry
clusters--Electronics, Chemicals, Biomedicals, Precision Engineering
and Transport were released. We have aggregated the monthly data to
quarterly data for comparison with the GDP data. The year to year
increases in Industrial Production are very close to those for
Manufacturing in the GNP data, as can be seen in the table below.
The 30.0% year to year change in the quarterly GNP data for
manufacturing in the first quarter of 2010 was due to a 70.3% year to
year increase in the production of Electronics, a 37.2% increase in the
production of Biomedicals, a 32.0% increase in the production of
Precision Engineering products and a 17.3% increase in the production
of Chemicals. The production of Transport equipment actually declined
14.2% in the first quarter. The year to year percent changes in the
quarterly data for the production of Electronics, Chemicals, Precision
Engineering and Transport clusters are shown in the second chart. The
year to year changes in the production of Biomedicals is shown in a
separate, the third, chart. The pattern of production in all five has
been erratic but most notably in that of Biomedicals.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100426b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100426c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Singapore:
Year to Year % Change</th>
<th scope="col">Q1 10&nbsp;</th>
<th scope="col">Q4 09&nbsp;</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q1 09</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3 08</th>
<th scope="col">Q2 08</th>
<th scope="col">Q1 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Gross Domestic
Product</td>
<td>13.1</td>
<td>4.0</td>
<td>0.6</td>
<td>-3.1</td>
<td>-9.4</td>
<td>-4.2</td>
<td>0.0</td>
<td>2.5</td>
<td>6.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Manufacturing</td>
<td>30.0</td>
<td>2.2</td>
<td>2.6</td>
<td>-0.4</td>
<td>-23.8</td>
<td>-10.7</td>
<td>-11.0</td>
<td>-5.6</td>
<td>12.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Industrial
Production&nbsp; (2007=100)y/y%</td>
<td>32.9</td>
<td>2.5</td>
<td>7.5</td>
<td>-0.6</td>
<td>-23.8</td>
<td>-10.7</td>
<td>-10.9</td>
<td>-5.6</td>
<td>12.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Electronics</td>
<td>70.3</td>
<td>28.0</td>
<td>-1.2</td>
<td>-19.4</td>
<td>-36.6</td>
<td>-23.2</td>
<td>-5.4</td>
<td>-0.9</td>
<td>3.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Chemicals</td>
<td>17.3</td>
<td>12.9</td>
<td>-5.3</td>
<td>-16.5</td>
<td>-22.6</td>
<td>-16.9</td>
<td>-0.1</td>
<td>1.0</td>
<td>1.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Biomedicals</td>
<td>37.2</td>
<td>-24.2</td>
<td>64.3</td>
<td>64.9</td>
<td>-23.5</td>
<td>1.46</td>
<td>-35.8</td>
<td>-28.1</td>
<td>49.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Precision Engineering</td>
<td>32.0</td>
<td>5.5</td>
<td>-15.8</td>
<td>-22.0</td>
<td>-29.1</td>
<td>-15.5</td>
<td>-7.1</td>
<td>-2.7</td>
<td>-2.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Transport</td>
<td>-14.2</td>
<td>-16.7</td>
<td>-8.6</td>
<td>-2.0</td>
<td>7.2</td>
<td>8.2</td>
<td>5.4</td>
<td>9.9</td>
<td>4.7</td>
</tr>
</tbody>
</table>
</body></html>

Almost two weeks ago, the Department of Statistics in Singapore released its flash estimate of first quarter year over the year growth of the economy of the city state--13.1%. The year to year growth in the manufacturing sector was [...]

The Components Of The 30% Y/Y Growth In Singapore's Manufacturing Production In Q 1

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
It's not that an $8,000 home-buyer tax credit alone lifted
March new home sales, it's that it will no longer be offered by the
Federal government after next week.The result was that new
home sales jumped 26.9% from February to 411,000 (AR). March
sales were the highest level since last July but it followed four
consecutive months of decline. The latest greatly exceeded of Consensus
expectations for 325,000 sales.
Home prices dipped last month, but that followed a firm
February increase. The net-result was a 4.3% price increase versus last
March which was the cycle low. Nevertheless, prices remain down 18.5%
from the 2007 peak.Price discounts have been lowering the inventory of
unsold homes to its lowest level since 1991. At the current sales rate,
the months' supply of unsold homes dropped to 6.7 from its 2009 high of
12.4 months. However, despite all this improvement it still
took a record median 14.4 months to sell a new home as of March.
A rebound from severe winter weather probably helped sales in
the Northeast. They rose by more than one-third from February and were
double last year's level. That monthly increase failed, however, to
make up the February decline. Sales in South also showed a hefty 43.5%
rise m/m but were up just 18.5% from last March. Elsewhere, the
credit's positive effect seemed smaller. Sales in the West sales rose
5.7% but they were up by one-quarter from last year while sales in the
Mid-west rose just 4.3% after a 13.0% February decline.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423g.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">US
New Homes</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Sales
(SAAR, 000s)</td>
<td>411</td>
<td>324</td>
<td>338</td>
<td>23.8%</td>
<td>372</td>
<td>481</td>
<td>769</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>38</td>
<td>28</td>
<td>41</td>
<td>100.0</td>
<td>31</td>
<td>35</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>49</td>
<td>47</td>
<td>54</td>
<td>11.4</td>
<td>54</td>
<td>69</td>
<td>118</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>231</td>
<td>161</td>
<td>168</td>
<td>18.5</td>
<td>201</td>
<td>264</td>
<td>409</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>93</td>
<td>88</td>
<td>75</td>
<td>25.7</td>
<td>87</td>
<td>113</td>
<td>178</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>214,000</td>
<td>221,600</td>
<td>215,800</td>
<td>4.3</td>
<td>214,500</td>
<td>230,408</td>
<td>243,742</td>
</tr>
</tbody>
</table>
</body></html>

It's not that an $8,000 home-buyer tax credit alone lifted March new home sales, it's that it will no longer be offered by the Federal government after next week.The result was that new home sales jumped 26.9% from February to 411,000 [...]

U.S. New Home Sales Jump With Tax Credit, But It Still Took A Long Time To Close The Deal

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
IFO surges: Germany&#8217;s
IFO indicators are rising very sharply in April. The biz climate index
lies 6.5% above its average; the Biz expectations index lies some 8.2%
above its average mark as well. Biz expectations a positioned in the
94.5th percentile of their range, an extremely high standing, while
current conditions are only at the 51.2 percentile&#8217; just above the
mid-point.
Sectors are
strong: Services, retailing, and MFG sectors all are
advancing with retailing making a strong move in the past month after
having languished badly. The MFG sector is driving higher at a
consistent and vibrant pace.
Report aligns
with strength elsewhere despite irregularities in e-Zone -
The IFO report reinforces the strong readings earlier by the Zew survey
of financial experts. It is a survey for April and is very up-to-date.
e-Zone orders though March were released today and were also quite
solid. The UK, however, reported a somewhat disappointing Q2 GDP gain.
Greece threw in the towel and asked for aid. Obviously the EU/EMU is a
melting pot of differing economic circumstances.
Strength seems
to dominate worries: For now the good news is that the
German economy is firing on all cylinders. The MFG sector continues to
be strong and the retailing sector has started to show some strong
gains at long last. The Markit indices on services and MFG were not
just up in April, but were up strongly. On the back of that strong
report from Markit we can conclude that the growth prospects for Europe
are looking up despite the irregularities and challenges it faces.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">IFO
Survey: Germany </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="5">Percent:
Yr/Yr</td>
<td style="font-weight: bold;" colspan="4">INDEX
NUMBERS</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>Apr 
10</td>
<td>Mar 
10</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>CURRENT</td>
<td>Mar 
10</td>
<td>Curr/Avg</td>
<td>Percentile</td>
</tr>
<tr>
<td class="firstcol">Biz Climate</td>
<td>21.5%</td>
<td>19.6%</td>
<td>15.2%</td>
<td>15.5%</td>
<td>14.8%</td>
<td>101.6</td>
<td>98.2</td>
<td>106.5%</td>
<td>72.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current
Situation</td>
<td>19.4%</td>
<td>14.5%</td>
<td>6.5%</td>
<td>5.3%</td>
<td>2.1%</td>
<td>99.3</td>
<td>94.5</td>
<td>104.6%</td>
<td>51.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Biz
Expectations</td>
<td>23.8%</td>
<td>24.8%</td>
<td>24.4%</td>
<td>26.8%</td>
<td>28.9%</td>
<td>104.0</td>
<td>102.0</td>
<td>108.2%</td>
<td>94.5%</td>
</tr>
<tr class="odd">
<td colspan="10" class="firstcol">Average
&amp;
Range Since Jul-92</td>
</tr>
</tbody>
</table>
</body></html>

IFO surges: Germany’s IFO indicators are rising very sharply in April. The biz climate index lies 6.5% above its average; the Biz expectations index lies some 8.2% above its average mark as well. Biz expectations a positioned in the [...]

IFO Follows Zew Lead And Pops

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Durable goods orders figures can be volatile month-to-month,
thus discerning trends can be challenging. The latest figures present
that difficulty. March orders slid 1.3% after a revised 1.1% February
increase. Consensus expectations had been for a 0.2% uptick. These
numbers on the surface give the appearance of a stall in the factory
sector's improvement. However, volatility of big-ticket aircraft orders
accounts for much of the variation. They slid 42.2% m/m as nondefense
aircraft orders plunged by two-thirds (-10.1% y/y).
In addition, a 2.5% increase (5.3% y/y) in March motor vehicle
orders made up declines in the prior two months. Excluding the
transportation sector altogether, durable goods orders continued to
firm after the recent recession. A 2.8% rise last month (13.5% y/y) was
the fourth strong gain in five months and the 13.5% y/y surge was the
strongest since mid-2006. As a result, further strength in shipments
and production of manufactured durable goods is likely.
Improvement in other sectors of durable manufacturing
continued last month, and it was broad-based. Primary metals orders
increased 3.5% and they're up by one-half from last March. Machinery
orders rose 8.6% (22.3% y/y) for the fourth strong gain in five months
while electrical equipment orders jumped 4.9% (11.0% y/y). The
technology sector also improved. Orders for computers &amp; related
equipment jumped 3.4% (6.9% y/y).
Shipments of durable goods followed the gains in orders and
they posted a 1.2% increase (4.8% y/y) after two months of slight
decline. Shipments of primary metals led the gain with a 4.4% increase
(33.7% y/y) along with a 4.3% jump in machinery shipments (2.4% y/y). A
1.9% increase (0.2% y/y) in transportation sector shipments along with
a 1.1% rise (2.8% y/y) in electrical equipment. Shipments of computers
&amp; electronic products lagged and posted a 2.3% decline (+8.0%
y/y), the fourth in five months. Semiconductor shipments were notably
weak (10.7% y/y) for the second consecutive month.
A turn away from inventory decumulation is helping the factory
sector's improvement. Durable goods inventories rose 0.2% (-7.2% y/y)
for the third month of modest increase. Nevertheless, inventories
remained well below past levels. Since the December 2008 peak
inventories were down 11.1%. Finally, backlogs of durable goods orders
slipped 0.3% and remained down 5.2% y/y.
The durable goods figures are available in Haver's USECON
database.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100423c.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"><a ;="" href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification
</a>(%)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Durable Goods Orders</td>
<td>-1.3</td>
<td>1.1</td>
<td>3.8</td>
<td>11.9</td>
<td>-19.8</td>
<td>-6.0</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">
Excluding Transportation</td>
<td>2.8</td>
<td>1.7</td>
<td>-0.8</td>
<td>13.5</td>
<td>-17.3</td>
<td>-1.4</td>
<td>-0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-7.5</td>
<td>6.1</td>
<td>3.9</td>
<td>12.7</td>
<td>-23.9</td>
<td>-7.0</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">Excluding Aircraft</td>
<td>4.0</td>
<td>2.1</td>
<td>-4.4</td>
<td>12.6</td>
<td>-18.2</td>
<td>-0.5</td>
<td>-2.7</td>
</tr>
</tbody>
</table>
</body></html>

Durable goods orders figures can be volatile month-to-month, thus discerning trends can be challenging. The latest figures present that difficulty. March orders slid 1.3% after a revised 1.1% February increase. Consensus expectations [...]

U.S. Durable Goods Orders Slump With Aircraft

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

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Andrew Cates

**Energy shock lifts inflation, trims growth**
The IMF’s latest WEO revisions for 2026 broadly reflect the classic stagflationary impact of the recent Middle East energy shock, with growth downgraded and inflation revised higher across most major economies. Higher energy prices act as a tax on real incomes while simultaneously pushing up costs. That said, the picture is not uniform: a number of economies—notably the US, China and India—have seen growth upgrades, reflecting stronger-than-expected momentum so far in 2026. By contrast, the UK stands out at the stagflationary extreme, combining one of the largest growth downgrades with a relatively strong inflation uplift—consistent with its weaker underlying momentum, greater energy sensitivity and more persistent domestic inflation dynamics. More broadly, while the global revisions remain modest—pointing to resilience in activity—the message is that disinflation is no longer a smooth glide back to target but increasingly contingent on energy prices and geopolitical developments.

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**Markets largely shrug off rising economic pessimism**
Notwithstanding a more downbeat assessment from economists—including the IMF’s stagflationary tilt to the outlook—there has been remarkably little follow-through into financial markets. Measures of systemic stress in both the US and UK remain low by historical standards, suggesting that investors are, for now, largely looking through the Middle East conflict. There are several possible explanations: corporate profits remain resilient, the AI-driven investment narrative continues to dominate market thinking, and markets may be assuming that any energy shock will be temporary and contained. In effect, investors appear to be pricing a benign baseline in which geopolitical risks do not materially disrupt growth, inflation expectations or policy. The UK is a partial exception, with a somewhat more visible uptick in stress, which aligns more closely with the IMF’s more challenging growth-inflation trade-off and the economy’s greater sensitivity to energy prices.

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**Volatility falls despite deteriorating growth surprises**
Market optimism is also increasingly at odds with the incoming data flow. Typically, equity volatility declines when growth surprises are positive and inflation surprises are benign. However, the recent pattern has broken that relationship. Growth surprises across the G10 have turned increasingly negative (our series is inverted in the chart below), yet volatility has continued to fall. In other words, markets are becoming less sensitive to weakening macro data, continuing to price a benign outlook even as the data deteriorate. This divergence reinforces the broader theme: investors are, for now, looking through both geopolitical risks and softer economic momentum, placing greater weight on resilience in earnings, the AI-driven narrative and the assumption that policy will remain supportive.

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**Inflation Nowcasts Have Jumped**
Incoming data suggest that headline inflation has moved higher in recent weeks, broadly in line with expectations given the rise in energy prices following the Middle East shock. Nowcasts for CPI across the major economies show a clear rebound in March and April from the lows seen at the start of 2026, with the move occurring in a relatively synchronised fashion. This reinforces the view that the recent pickup in inflation is being driven primarily by a common external factor—energy.

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**Energy shock not yet feeding into underlying inflation**
However, the detailed breakdown of March inflation outcomes suggests that this remains, for now, a largely headline-driven phenomenon. While headline CPI prints were firm across most economies, core inflation—stripping out energy and food—was more subdued and in some cases weaker. This indicates that there has been very limited pass-through from higher energy prices into broader goods and services inflation at this early stage. In other words, the shock is still being absorbed rather than propagated. That distinction is critical for policy and markets alike: as long as second-round effects remain contained, central banks may be able to look through the near-term rise in inflation, even as headline rates move higher.

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**Inflation Expectations Rising as Growth Sentiment Falters**
It remains early days, and much will hinge on how inflation expectations evolve from here. The latest ZEW survey for Germany already conveys the hallmarks of a classic stagflationary shock, with macroeconomic expectations weakening even as inflation expectations have ratcheted sharply higher. This shift is important: while the recent rise in headline inflation has so far shown limited pass-through into core, a sustained increase in expectations would raise the risk of second-round effects and make the inflation process more persistent. In that sense, the ZEW data highlight the key fault line in the current environment—whether the energy-driven shock remains contained, or begins to embed itself more broadly through expectations and pricing behaviour.

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Financial markets have remained notably calm in recent weeks despite rising geopolitical tensions in the Middle East, a more downbeat macroeconomic narrative and elevated uncertainty. Measures of financial stress and volatility remain low, and equity markets continue to look through both the conflict and softer data. That resilience sits alongside a more nuanced macro backdrop. The IMF’s latest WEO revisions point to a classic stagflationary energy shock—growth downgraded and inflation revised higher—although the global impact remains modest and uneven, with some economies still benefiting from stronger momentum (chart 1). At the same time, market pricing appears increasingly detached from the data flow, with volatility declining even as growth surprises have turned more negative relative to inflation (charts 2 and 3). Incoming inflation data reinforce the idea of a largely headline-driven shock, with nowcasts rising in line with higher energy prices but only limited pass-through into core inflation so far (charts 4 and 5). However, it remains early days. Survey evidence, such as the latest ZEW release, suggests that inflation expectations may already be responding in a more concerning way, with a marked rise alongside weakening growth sentiment (chart 6). Taken together, the key question for markets is whether this remains a contained, energy-driven shock that can be looked through—or whether it begins to embed more persistently via expectations, forcing a reassessment of the currently benign outlook.

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Charts of the Week: Risks Build, Markets Shrug

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The onset of the war in Iran appears to have hit the German economy extremely hard as the Ifo survey shows very substantial and broad-based decline across its survey in April. The Ifo survey features readings for five sectors as well as an aggregate reading, and it surveys them for climate, current conditions, and expectations. The decline in the Ifo survey is present for all three concepts and across all five sectors, marking the weakening in April as a highly significant and extremely disturbing development. Only manufacturing in the current conditions survey escapes a month-to-month decline.

**The Ifo sequences**: The **climate** reading fell both overall and across each of the five sectors. **Current conditions** declined for the overall and for four of the five sectors, with manufacturing the sole exception. **Expectations** declined for the overall and for all sectors. Several of the sector declines were for a very substantial magnitude, especially when compared to historic changes in these indexes.

**Monthly changes in readings—severe broad deterioration**
The month-to-month change in the climate reading has weakened more month-to-month 19% of the time. That overall result, however, is boosted by manufacturing where the monthly change has been weaker 35% of the time (on data back to 2011). However, all other sectors have seen climate weaker m/m only 2.3% to 6.3% of the time! The current situation readings weakened, with the headline weakening more m/m 11% of the time. This was boosted by manufacturing, the only sector that improved on the month; its ranking on change was in its 85th percentile—quite good and truly stand-alone good news. The other current changes by sector ranged from construction being weaker 1.7% of the time, to retailing that has been weaker about 30% of the time in terms of m/m changes. Expectation changes were uniformly terrible, with the headline drop weaker only 6.3% of the time and sector change month-to-month weaker between 9% and 1.7% of the time. The monthly weakening was uniform and substantial. I document it with these calculations, but you can also see it on the chart above.

**Climate**: The bottom line is that the all-sector index for climate fell to -20.3 in April from -18 in March, placing it at a 10.5 percentile standing on data since 1993. The sector ranking is the highest for construction with a 42.2 percentile standing and the weakness for services at a 1.1 percentile standing—weaker than the table reading nearly 99% of the time. In terms of percentile standing levels or monthly changes, conditions are closing in on grim.

**Current conditions**: Current conditions saw the all-sector index slip to -5.3 in April from -2.4 in March. The headline ranking stands at a 9.8 percentile mark, making it—like the climate reading—weaker than its current reading only about 10% of the time. The strongest reading under current conditions is for construction which has a 60.6 percentile standing; it is the only ranking in the table above its historic median. Manufacturing, the only sector in the survey that improved month-to-month, has a 22.5 percentile standing, while services record the weakest percentile standing under current conditions, at an 8.4 percentile standing.

**Expectations:** The all-sector index for expectations fell to -25.3 in April from -19.9 in March, placing it at a 6.3 percentile standing. The percentile standings across sectors range from a high of 9.5% for manufacturing to a low of 1.5% for retailing. Up until earlier this year, the Ifo was showing signs of improvement; however, all of that has simply collapsed in the last month. Weakness is across economic concepts and sectors, as documented above. For reference, the table also gives a separate set of rankings on where the various indexes stand since the invasion of Ukraine, since that was another marked event that drove the index, that had been improving after Covid, down to lower levels.  Ranked even on this reduced scale looking at conditions only since the invasion of Ukraine, when conditions have generally been weaker, the current rankings across the Ifo survey remained extremely weak. This is a very disturbing survey for the German economy.

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Germany

German Ifo Plunges Everywhere

Sandy Batten

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The National Activity Index published by the Federal Reserve Bank of Chicago (CFNAI) slipped to -0.20 in March from an upwardly revised +0.03 in February (previously (-0.11). This is the lowest monthly reading since last November. Smoothing out the monthly volatility, the index's three-month moving average (CFNAI-MA3) declined to -0.03 in March from an upwardly revised +0.03 in February (previously -0.01).

This index is expressed in standard deviation units from zero (with a value of zero defined as trend real GDP growth). Research at the FRB Chicago indicates that readings on the 3-month average of -0.70 or below are consistent with the economy being in a recession. Therefore, even though the March reading on the 3-month average was negative, it indicates that the US economy is still growing, just slightly slower than trend, and is well away from recessionary conditions. The 3-month average would be much deeper in negative territory if the economy was at risk of contracting.

The National Activity Index is a composite of 85 economic indicators, grouped into four major categories: production and income; employment, unemployment, and hours worked; personal consumption and housing; sales, orders, and inventories. Three of the four broad categories of indicators used to construct the index decreased from February, and three categories made negative contributions in March. Production-related indicators contributed –0.20 to the CFNAI in March, down from +0.13 in February. The sales, orders, and inventories category's contribution to the CFNAI was –0.01 in March, down from +0.05 in February. Employment-related indicators contributed +0.02 to the CFNAI in March, up from –0.15 in February. The personal consumption and housing category's contribution to the CFNAI was –0.01 in March, down from a neutral value in February.

The CFNAI Diffusion Index, which measures the breadth of the change in the component series and is also a three-month moving average, increased to –0.04 in March from –0.08 in February. This is the highest reading since February 2025. A reading of zero indicates that all of the indicators are growing at their long-term average. If all of the underlying indicators in a given month are below their long-run averages, the diffusion index will equal -1. If all of the indicators are above their long-run averages, it will equal +1. Thirty-four of the 85 individual indicators made positive contributions to the CFNAI in March, while 51 made negative contributions. Forty-three indicators improved from February to March, while 40 indicators deteriorated and two were unchanged. Of the indicators that improved, 16 made negative contributions.

These figures are available in Haver's **SURVEYS** database.

- The monthly reading fell to -0.20 in March from an upwardly revised +0.03 in February.
- The three-month average slipped from +0.03 to -0.03.
- Despite the slip in March, the index points to near-trend economic growth and is well above recession territory.

Chicago Fed National Activity Index Slipped in March

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance rose by 6,000 to 214,000 in the week ending April 18, from 208,000 in the week ending April 11, revised from 207,000. The four-week average rose 750 to 210,750 in the week ending April 18, from 210,000 the April 11 week, revised from 209,750. The Action Economics/Haver Analytics Survey looked for 210,000 claims to have been filed.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—rose by 12,000 to 1.821 million in the week ending April 11, from 1.809 million in the week ending April 4. The four-week moving average rose to 1.812 million in the latest week from 1.811 million in the March 28 week. The insured unemployment rate remained at 1.2% in the week of April 11. It has remained at that level since the week of November 29, 2025.

The insured unemployment rate varied greatly across individual states and territories. In the week ending April 4, the highest unemployment rates were in New Jersey (2.51%), Massachusetts (2.37%), Rhode Island (2.31%), Washington (2.25%), Minnesota (2.11%), and California (2.02%). The lowest rates were in Florida (0.30%), Louisiana (0.31%), Arkansas (0.35%), Alabama (0.36%), North Carolina (0.39%), Tennessee (0.46%), South Dakota (0.47%), Kansas and Virginia (both 0.49%). Rates in other notable states include New York (1.92%), Illinois (1.82%), Pennsylvania (1.52%), and Texas (1.04%). These state data are not seasonally adjusted.

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

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- New claims rose by 6,000 to 214,000.
- Continuing claims rose by 12,000 to 1.821 million.
- The insured unemployment rate remained at 1.2%.


U.S. Initial Unemployment Claims Rose in the Week of April 18

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**Manufacturing looks strong while service sectors weaken**
S&P's April flash PMI readings show some very mixed results. For the United States, India, Australia, and the United Kingdom, there is a strengthening in the readings month-to-month for services, manufacturing, and the composite.

For Japan, France, and the European Monetary Union as a whole, there is improvement in the manufacturing sector on the month but a weaker services reading and a weaker composite overall.

Germany is the only responding area in the table showing weakness all around—in all three sectors—a weaker composite, a weaker manufacturing sector, and a weaker services sector in April. For Germany, this follows a weaker composite and service sector in March as well.

Most reporters—France, the United Kingdom, Japan, Australia, and India—had weaker readings for all three metrics in March: the composite, services, and manufacturing. The March exceptions were the United States, Germany, and the European Monetary Union; in each case, the exception was that the manufacturing sector improved month-to-month, while the composite and services both weakened.

This has been a period of weakening—in March and April—since the war in Iran began. The 48 separate sector readings produced 30 readings that were weaker month-to-month in March and April. Among the 16 composite readings, 12 reported weaker conditions month-to-month. In March, the immediate aftermath of the outbreak of war brought instantaneous step backs across the PMI readings, while April, responding to at least a military success in the area, has shown a significant bounce back that is now more common than further weakness.

The sequential data over three months, six months, and 12 months are based only on completed data; therefore, they're up to date through March. On that basis, we have triple sector weakness in the U.S., India, and Australia, with only Japan and the United Kingdom showing triple-sector improvement over three months. However, if we look at six months compared to 12 months, we have triple sector strength in the Monetary Union, Germany, France, the United Kingdom, Japan, and Australia. India and the U.S. each show only one stronger sector over that comparison—services in India’s case and manufacturing in the U.S. case.

**Ranking Peculiarity**
The ranking data take the current flash data and compare them to the history of observations back to January 2022. What is quite surprising is that, on that timeline, the manufacturing sectors of all the countries in the table—except for Australia and India—show manufacturing standings in their respective 80th to 90th percentiles. Meanwhile, services standings are typically in the 30th percentile or lower.

**Odd Impact of War**
If the war in Iran has an impact on something, we would expect that to fall on the goods trade sector. We would expect this to have an impact on manufacturing although it's the opposite thing that's happening. Manufacturing is showing a revival, while services sectors are showing weaker performance across these countries generally. India is an interesting case, with manufacturing only in its 32nd percentile; however, India’s raw diffusion reading for manufacturing is the strongest raw diffusion reading in the table. What India's ranking is telling us is that India had been extremely strong over the period since 2022, and now compared to that past standard, it's relatively weaker. However, it's still strong in absolute terms, showing a great deal of strength based on its pure diffusion value, just not in comparison to historic performance.

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**Next?**
At this point, it's not clear to me at least what these PMI data are telling us since the strength in manufacturing is a curiosity as is the weakness in the services sector. You see these two phenomena displayed in the chart above, in the case of the European Monetary Union’s flash readings as well.

**War breeds negative effects**
It's not a surprise that war would take some toll on consumer confidence or that it would be reflected in the services sector. However, seeing the kind of weakness being portrayed now in services against the strength in manufacturing is simply a bit hard to rationalize and understand. So, I think we're going to have to keep an eye on these readings as well as other readings in the months ahead to try to discern how global events, the war, conditions in the Strait of Hormuz, inflation currency shifts, and central bank policy are playing out across these various countries. None of what is happening is obvious to me. Japan clearly continues to benefit from a weak yen as its manufacturing sector is flying high, at its best reading since January 2022.

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