Charles Steindel

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Reflecting the somewhat softer tone of the national report, only four states were considered to have statistically significant changes (all increases) in payroll employment in November: California, Florida, Wisconsin, and South Dakota. The other 46 states (and DC) had statistically insignificant gains and losses (only in Texas would a 14,000 job gain be seen as “insignificant,” but putting that change in the context of a job base of nearly 13 million shows why that is the case).

Once again, the 12-month changes show job growth is converging across the nation. Only 3 states saw job gains above 3% in that period led by Nevada’s 3.8%. There does appear to be a somewhat greater tendency toward softness; 10 states (including DC in this group) had job gains under 1.0%, with two (Vermont and Alaska) experiencing declines. The range of unemployment rates has continued to narrow; with Alaska (the high state) edging down to 6.3% and Hawaii up a notch to 2.4% (Hawaii is now tied with Iowa for the lowest rate). West Virginia, Louisiana, and DC report rates above 5%, while Idaho, North Dakota, Minnesota, Nebraska, Vermont, Virginia, and New Hampshire join Hawaii and Iowa with rates under 3%. Note that Virginia (and arguably Minnesota) is the only larger state with an unemployment rate that looks like a notable outlier.

Puerto Rico’s labor market remains bleak. Nonfarm employment fell by 3,100 in November, though the level was 1% higher than the year-earlier figure (which was in the near-aftermath of Maria). The unemployment rate looks reasonably good, falling from 8.0% to 7.7%, which is a remarkably low figure for Puerto Rico. However, this decline, like the comparable one in October, reflects another sharp drop in the island’s labor force which, according to the data, has fallen an astonishing 1.7% over the last two months.
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Reflecting the somewhat softer tone of the national report, only four states were considered to have statistically significant changes (all increases) in payroll employment in November: California, Florida, Wisconsin, and South [...]

State Labor Markets in November

Tom Moeller

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Personal income rose 0.2% during November (4.2% y/y)
following an unrevised 0.5% October increase. A 0.3% gain was expected in the
Action Economics Forecast Survey. Leading last month's rise was a 1.0% hop (5.3%
y/y) in proprietors' income which came after a 1.3% jump. Wages &amp; salaries
rose a lessened 0.2% (4.2% y/y), the weakest rise in six months. Income from
assets held steady (3.5% y/y) after a 0.3% rise, reflecting a 0.4% dividend
decline (+3.8% y/y) and a 0.3% gain (3.2% y/y) in interest income. Rental income
increased 0.5% (4.8% y/y), the same as during October. Transfer payments edged
0.1% higher (5.2% y/y) reflecting a 0.4% decline (+5.7% y/y) in social security
payments. Medicare receipts rose 0.9% (7.5% y/y) but Medicaid income inched just
0.1% higher (4.8% y/y). Veterans benefits rose 0.4% (10.9% y/y) while
unemployment insurance benefits eased 0.4% (-16.7% y/y).

Disposable personal income gained 0.2% (4.7% y/y) following a
0.5% increase. When adjusted for higher prices, disposable income also rose 0.2%
(2.8% y/y).

Personal consumption expenditures improved by a lessened 0.4%
last month (4.7% y/y) after a 0.8% increase. A 0.3% rise had been expected.
Adjusted for higher prices, personal outlays rose 0.3% (2.8% y/y). Real durable
goods outlays increased 0.9% (3.8% y/y) led by a 1.9% rise (8.9% y/y) in
recreational goods &amp; vehicles. Home furnishings &amp; appliance buying
increased 1.3% (4.1% y/y) but motor vehicle expenditures declined 0.4% (-2.2%
y/y). Real outlays on nondurable goods increased 0.6% (3.2% y/y) as fuel outlays
edged 0.1% higher (-0.8% y/y). Clothing spending jumped 1.6% (4.6% y/y) and
spending at restaurants rose 0.3% (2.7% y/y). Real services outlays gained a
lessened 0.2% (2.6% y/y). Spending on housing &amp; utilities rose a steady 0.6%
(2.4% y/y) while financial services &amp; insurance payments gained 0.4% (0.9%
y/y). Recreation services spending decreased 0.8% (+1.4% y/y) while spending at
restaurants fell 0.7% (+3.5% y/y). Health care outlays rose 0.3% (2.9% y/y).

The personal savings rate eased to 6.0%, the lowest level
since March 2013. It has been falling steadily since the February high of 7.4%.
The level of personal savings increased a paltry 1.7% y/y.

The personal consumption chain price index rose 0.1% (1.8%
y/y) after a 0.2% rise. The index excluding food &amp; energy also rose 0.1%
(1.9% y/y) for a second month.

The personal income and consumption figures are available in
Haver's USECON database with detail in the USNA database. The
Action Economics figures are in the AS1REPNA database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Personal Income &amp; Outlays
 (%)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Personal Income</td>
 <td >0.2</td>
 <td >0.5</td>
 <td >0.2</td>
 <td >4.2</td>
 <td >4.4</td>
 <td >2.6</td>
 <td >4.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Wages &amp; Salaries</td>
 <td >0.2</td>
 <td >0.4</td>
 <td >0.3</td>
 <td >4.2</td>
 <td >4.6</td>
 <td >2.9</td>
 <td >5.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Disposable Personal Income</td>
 <td >0.2</td>
 <td >0.5</td>
 <td >0.2</td>
 <td >4.7</td>
 <td >4.4</td>
 <td >2.8</td>
 <td >4.4</td>
 </tr>
 <tr>
 <td class="firstcol" >Personal Consumption Expenditures</td>
 <td >0.4</td>
 <td >0.8</td>
 <td >0.1</td>
 <td >4.7</td>
 <td >4.3</td>
 <td >3.8</td>
 <td >4.0</td>
 </tr>
 <tr>
 <td class="firstcol" >Personal Saving Rate</td>
 <td >6.0</td>
 <td >6.1</td>
 <td >6.3</td>
 <td >6.2 
 (Nov.'17)</td>
 <td >6.7</td>
 <td >6.7</td>
 <td >7.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >PCE Chain Price Index</td>
 <td >0.1</td>
 <td >0.2</td>
 <td >0.1</td>
 <td >1.8</td>
 <td >1.8</td>
 <td >1.1</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Less Food &amp; Energy</td>
 <td >0.1</td>
 <td >0.1</td>
 <td >0.2</td>
 <td >1.9</td>
 <td >1.6</td>
 <td >1.7</td>
 <td >1.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Real Disposable Income</td>
 <td >0.2</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >2.8</td>
 <td >2.6</td>
 <td >1.7</td>
 <td >4.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Real Personal Consumption Expenditures</td>
 <td >0.3</td>
 <td >0.6</td>
 <td >-0.0</td>
 <td >2.8</td>
 <td >2.5</td>
 <td >2.7</td>
 <td >3.7</td>
 </tr>
 </tbody>
 </table>
 
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Personal income rose 0.2% during November (4.2% y/y) following an unrevised 0.5% October increase. A 0.3% gain was expected in the Action Economics Forecast Survey. Leading last month's rise was a 1.0% hop (5.3% y/y) in proprietors' [...]

U.S. Personal Income and Spending Gains Slow; Pricing Power Is Weak

Carol Stone, CBE

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Real gross domestic product increased 3.4% (AR, 3.0% y/y) during Q3'18, a downward revision of 0.1% from November’s second estimate. This followed a 4.2% rise during the second quarter. Participants in the Actions Economics Forecast Survey had expected no change from the 3.5% rate.

Third-quarter corporate profits data were also revised and now show 3.5% growth from Q2 (19.6% y/y) including adjustments for inventory valuation and depreciation, up from 3.3% reported last month. The rise followed 2.1% growth in the second quarter. Profits without inventory & depreciation allowances rose 0.9% (6.1% y/y), also up 0.2% from last month’s report, following a 3.3% Q2 increase.

Domestic final sales increased 2.9% (3.2% y/y), which is revised down 0.2% from November’s estimate. Personal consumption expenditures were revised down to 3.5% growth (2.9% y/y) from 3.6%. Spending on durable goods was reduced to 3.7% (5.6% y/y) from 3.9%. Motor vehicle purchases fell at a 1.8% rate (1.5% y/y), revised from -1.5%. Recreational vehicle purchases growth was reduced from 9.1% to 8.9% (9.3% y/y) and spending growth on home furnishings of 6.3% (6.4% y/y) was revised from 6.8%.

Nondurable goods purchases grew at a 4.6% rate (3.2% y/y), revised from 5.3%. Clothing purchases strengthened 11.0% (5.2% y/y), still the quickest growth since Q4'05, and food & beverages expenditures rose 3.4% (3.6% y/y), revised from 3.8%. Gasoline & fuel oil buying dropped at a 3.4% pace (-1.0% y/y), revised from a 1.2% decrease reported last month.


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Spending on services increased at a 3.2% pace (2.5% y/y). It remained the quickest growth since late 2014. Outlays at restaurants & hotels gained 7.1% (4.2% y/y) which followed an 8.1% Q2 rise. Health care outlays increased 4.7% (2.7% y/y) and financial services insurance rose 1.4% (0.4% y/y), revised from 1.0%. Housing & utilities outlays rose 1.0% (0.5% y/y) while recreation spending fell 1.3% (+0.7% y/y), revised from -0.2%.

Government sector spending also was reduced to 2.6% (2.3 y/y) from 3.3% reported before. Federal government outlays growth was unrevised at 3.5% both q/q and y/y. National defense spending remained at 4.9% growth in the quarter and the 4.2% y/y increase was the strongest since Q1 2010. Outlays by state & local governments were also unrevised, showing a 2.0% growth rate in the quarter (1.5% y/y).

Growth in business fixed investment remained at a 2.5% pace (6.8% y/y). Structures investment, however, was revised to a decline of 3.4% (6.3%) from the -1.7% reported last month. Industrial equipment spending growth was trimmed to 9.5% (4.5% y/y) from 9.8% in last month’s report, while information processing equipment investment grew 7.2% (9.6% y/y). Transportation equipment expenditures declined 3.6% (+5.3% y/y), a slight improvement from last month’s -3.9%. Investment in intellectual products did better than seen before, growing at a 5.6% (7.6% y/y) pace, up from last month’s 4.3% estimate.

Residential investment was revised down to a 3.6% (+0.5% y/y) decline from -2.6%. It remained the third straight quarter of decline.

The chain type GDP prices index was revised upward marginally to a 1.8% increase (2.3% y/y), compared with the Action Economics survey’s 1.7% forecast, following the 3.0% increase in Q2. The PCE price index was increased to 1.6% (2.2% y/y) from 1.5% in last month’s report. Business fixed investment prices increased at a 1.6% pace (1.2% y/y), a bit stronger than the already firm 1.5% of last month’s estimates, making the last two quarters the strongest since 2014. The residential investment price index increased 3.6% (5.7% y/y), unchanged from last month’s tabulation and roughly half the growth during the prior two quarters.

The GDP figures can be found in Haver's USECON and USNA database.
USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts.
Both databases include tables of the newly published not seasonally adjusted data. The Action
Economics consensus estimates can be found in AS1REPNA.

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 <a href="/comment/181221g.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181221g.png"></a>


	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 
 <tr>
 <th class="firstcol" scope="col" ><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM" ;>Chained
 2012 $ (%, AR</a>)</th>
 <th scope="col" >Q3'18 (Third Estimate)</th>
 <th scope="col" >Q3'18 (Second Estimate)</th>
 <th scope="col" >Q2'18</th>
 <th scope="col" >Q1'18</th>
 <th scope="col" >Q3'18 Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 <tbody>
 <tr>
 <td class="firstcol" >Gross Domestic Product</td>
 <td >3.4</td>
 <td >3.5</td>
 <td >4.2</td>
 <td >2.2</td>
 <td >3.0</td>
 <td >2.2</td>
 <td >1.6</td>
 <td >2.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Inventory Effect</td>
 <td >2.3</td>
 <td >2.3</td>
 <td >-1.2</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >0.0</td>
 <td >-0.5</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Final Sales</td>
 <td >1.0</td>
 <td >1.2</td>
 <td >5.4</td>
 <td >1.9</td>
 <td >2.9</td>
 <td >2.2</td>
 <td >2.1</td>
 <td >2.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Foreign Trade Effect</td>
 <td >-2.0</td>
 <td >-1.9</td>
 <td >1.2</td>
 <td >0.0</td>
 <td >-0.4</td>
 <td >-0.3</td>
 <td >-0.3</td>
 <td >-0.8</td>
 </tr>
 <tr>
 <td class="firstcol" >Domestic Final Sales</td>
 <td >2.9</td>
 <td >3.1</td>
 <td >4.0</td>
 <td >1.9</td>
 <td >3.3</td>
 <td >2.5</td>
 <td >2.3</td>
 <td >3.3</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="9" >Demand Components</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Personal Consumption Expenditure</td>
 <td >3.5</td>
 <td >3.6</td>
 <td >3.8</td>
 <td >0.5</td>
 <td >3.0</td>
 <td >2.5</td>
 <td >2.7</td>
 <td >3.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Nonresidential Business Fixed
 Investment</td>
 <td >2.5</td>
 <td >2.5</td>
 <td >8.7</td>
 <td >11.5</td>
 <td >6.8</td>
 <td >5.3</td>
 <td >0.5</td>
 <td >1.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Residential Investment</td>
 <td >-2.6</td>
 <td >-2.6</td>
 <td >-1.4</td>
 <td >-3.4</td>
 <td >0.8</td>
 <td >3.3</td>
 <td >6.5</td>
 <td >10.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Government Spending</td>
 <td >2.6</td>
 <td >2.6</td>
 <td >2.5</td>
 <td >1.5</td>
 <td >2.3</td>
 <td >-0.1</td>
 <td >1.4</td>
 <td >1.9</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="9" >Chain-Type Price Index</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp; GDP</td>
 <td >1.8</td>
 <td >1.7</td>
 <td >3.0</td>
 <td >2.0</td>
 <td >2.3</td>
 <td >1.9</td>
 <td >1.1</td>
 <td >1.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Personal Consumption
 Expenditures</td>
 <td >1.6</td>
 <td >1.5</td>
 <td >2.0</td>
 <td >2.5</td>
 <td >2.2</td>
 <td >1.8</td>
 <td >1.1</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Nonresidential
 Investment</td>
 <td >1.6</td>
 <td >1.5</td>
 <td >2.0</td>
 <td >0.7</td>
 <td >1.2</td>
 <td >0.7</td>
 <td >-0.8</td>
 <td >0.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Residential Investment</td>
 <td >3.6</td>
 <td >3.6</td>
 <td >7.3</td>
 <td >8.8</td>
 <td >5.7</td>
 <td >4.5</td>
 <td >3.6</td>
 <td >2.7</td>
 </tr>
 </tbody>
 
 
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Real gross domestic product increased 3.4% (AR, 3.0% y/y) during Q3'18, a downward revision of 0.1% from November’s second estimate. This followed a 4.2% rise during the second quarter. Participants in the Actions Economics Forecast [...]

U.S. GDP Growth Revised Down 0.1%; Profits Growth Modestly Higher

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 <a href="/comment/181221b.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181221b.png"></a>

Real gross domestic product increased 3.4% (AR, 3.0% y/y) during Q3'18, a downward revision of 0.1% from November's second estimate. This followed a 4.2% rise during the second quarter. Participants in the Actions Economics Forecast Survey had expected no change from the 3.5% rate.

Third-quarter corporate profits data were also revised and now show 3.5% growth from Q2 (19.6% y/y) including adjustments for inventory valuation and depreciation, up from 3.3% reported last month. The rise followed 2.1% growth in the second quarter. Profits without inventory & depreciation allowances rose 0.9% (6.1% y/y), also up 0.2% from last month's report, following a 3.3% Q2 increase.

Domestic final sales increased 2.9% (3.2% y/y), which is revised down 0.2% from November's estimate. Personal consumption expenditures were revised down to 3.5% growth (2.9% y/y) from 3.6%. Spending on durable goods was reduced to 3.7% (5.6% y/y) from 3.9%. Motor vehicle purchases fell at a 1.8% rate (1.5% y/y), revised from -1.5%. Recreational vehicle purchases growth was reduced from 9.1% to 8.9% (9.3% y/y) and spending growth on home furnishings of 6.3% (6.4% y/y) was revised from 6.8%.

Nondurable goods purchases grew at a 4.6% rate (3.2% y/y), revised from 5.3%. Clothing purchases strengthened 11.0% (5.2% y/y), still the quickest growth since Q4'05, and food & beverages expenditures rose 3.4% (3.6% y/y), revised from 3.8%. Gasoline & fuel oil buying dropped at a 3.4% pace (-1.0% y/y), revised from a 1.2% decrease reported last month.

Spending on services increased at a 3.2% pace (2.5% y/y). It remained the quickest growth since late 2014. Outlays at restaurants & hotels gained 7.1% (4.2% y/y) which followed an 8.1% Q2 rise. Health care outlays increased 4.7% (2.7% y/y) and financial services insurance rose 1.4% (0.4% y/y), revised from 1.0%. Housing & utilities outlays rose 1.0% (0.5% y/y) while recreation spending fell 1.3% (+0.7% y/y), revised from -0.2%.


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Government sector spending also was reduced to 2.6% (2.3 y/y) from 3.3% reported before. Federal government outlays growth was unrevised at 3.5% both q/q and y/y. National defense spending remained at 4.9% growth in the quarter and the 4.2% y/y increase was the strongest since Q1 2010. Outlays by state & local governments were also unrevised, showing a 2.0% growth rate in the quarter (1.5% y/y).

Growth in business fixed investment remained at a 2.5% pace (6.8% y/y). Structures investment, however, was revised to a decline of 3.4% (6.3%) from the -1.7% reported last month. Industrial equipment spending growth was trimmed to 9.5% (4.5% y/y) from 9.8% in last month's report, while information processing equipment investment grew 7.2% (9.6% y/y). Transportation equipment expenditures declined 3.6% (+5.3% y/y), a slight improvement from last month's -3.9%. Investment in intellectual products did better than seen before, growing at a 5.6% (7.6% y/y) pace, up from last month's 4.3% estimate.

Residential investment was revised down to a 3.6% (+0.5% y/y) decline from -2.6%. It remained the third straight quarter of decline.

The chain type GDP prices index was revised upward marginally to a 1.8% increase (2.3% y/y), compared with the Action Economics survey's 1.7% forecast, following the 3.0% increase in Q2. The PCE price index was increased to 1.6% (2.2% y/y) from 1.5% in last month's report. Business fixed investment prices increased at a 1.6% pace (1.2% y/y), a bit stronger than the already firm 1.5% of last month's estimates, making the last two quarters the strongest since 2014. The residential investment price index increased 3.6% (5.7% y/y), unchanged from last month's tabulation and roughly half the growth during the prior two quarters.

The GDP figures can be found in Haver's USECON and USNA database.
USNA contains virtually all of the Bureau of Economic Analysis' detail in the national accounts.
Both databases include tables of the newly published not seasonally adjusted data. The Action
Economics consensus estimates can be found in AS1REPNA.

<a href="/comment/181221f.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181221f.png"></a>
 <a href="/comment/181221g.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181221g.png"></a>


	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 
 <tr>
 <th class="firstcol" scope="col" ><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM" ;>Chained
 2012 $ (%, AR</a>)</th>
 <th scope="col" >Q3'18 (Third Estimate)</th>
 <th scope="col" >Q3'18 (Second Estimate)</th>
 <th scope="col" >Q2'18</th>
 <th scope="col" >Q1'18</th>
 <th scope="col" >Q3'18 Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 <tbody>
 <tr>
 <td class="firstcol" >Gross Domestic Product</td>
 <td >3.4</td>
 <td >3.5</td>
 <td >4.2</td>
 <td >2.2</td>
 <td >3.0</td>
 <td >2.2</td>
 <td >1.6</td>
 <td >2.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Inventory Effect</td>
 <td >2.3</td>
 <td >2.3</td>
 <td >-1.2</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >0.0</td>
 <td >-0.5</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Final Sales</td>
 <td >1.0</td>
 <td >1.2</td>
 <td >5.4</td>
 <td >1.9</td>
 <td >2.9</td>
 <td >2.2</td>
 <td >2.1</td>
 <td >2.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Foreign Trade Effect</td>
 <td >-2.0</td>
 <td >-1.9</td>
 <td >1.2</td>
 <td >0.0</td>
 <td >-0.4</td>
 <td >-0.3</td>
 <td >-0.3</td>
 <td >-0.8</td>
 </tr>
 <tr>
 <td class="firstcol" >Domestic Final Sales</td>
 <td >2.9</td>
 <td >3.1</td>
 <td >4.0</td>
 <td >1.9</td>
 <td >3.3</td>
 <td >2.5</td>
 <td >2.3</td>
 <td >3.3</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="9" >Demand Components</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Personal Consumption Expenditure</td>
 <td >3.5</td>
 <td >3.6</td>
 <td >3.8</td>
 <td >0.5</td>
 <td >3.0</td>
 <td >2.5</td>
 <td >2.7</td>
 <td >3.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Nonresidential Business Fixed
 Investment</td>
 <td >2.5</td>
 <td >2.5</td>
 <td >8.7</td>
 <td >11.5</td>
 <td >6.8</td>
 <td >5.3</td>
 <td >0.5</td>
 <td >1.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Residential Investment</td>
 <td >-2.6</td>
 <td >-2.6</td>
 <td >-1.4</td>
 <td >-3.4</td>
 <td >0.8</td>
 <td >3.3</td>
 <td >6.5</td>
 <td >10.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Government Spending</td>
 <td >2.6</td>
 <td >2.6</td>
 <td >2.5</td>
 <td >1.5</td>
 <td >2.3</td>
 <td >-0.1</td>
 <td >1.4</td>
 <td >1.9</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="9" >Chain-Type Price Index</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp; GDP</td>
 <td >1.8</td>
 <td >1.7</td>
 <td >3.0</td>
 <td >2.0</td>
 <td >2.3</td>
 <td >1.9</td>
 <td >1.1</td>
 <td >1.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Personal Consumption
 Expenditures</td>
 <td >1.6</td>
 <td >1.5</td>
 <td >2.0</td>
 <td >2.5</td>
 <td >2.2</td>
 <td >1.8</td>
 <td >1.1</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Nonresidential
 Investment</td>
 <td >1.6</td>
 <td >1.5</td>
 <td >2.0</td>
 <td >0.7</td>
 <td >1.2</td>
 <td >0.7</td>
 <td >-0.8</td>
 <td >0.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Residential Investment</td>
 <td >3.6</td>
 <td >3.6</td>
 <td >7.3</td>
 <td >8.8</td>
 <td >5.7</td>
 <td >4.5</td>
 <td >3.6</td>
 <td >2.7</td>
 </tr>
 </tbody>
 
 
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Real gross domestic product increased 3.4% (AR, 3.0% y/y) during Q3'18, a downward revision of 0.1% from November's second estimate. This followed a 4.2% rise during the second quarter. Participants in the Actions Economics Forecast [...]

Robert Brusca

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GfK provides a forward-looking peek at German consumer confidence. Its estimate for January sees confidence at the same level as in December at an index reading of 10.4. This reading is in the 91st percentile of all readings since January 2002. The German climate remains rarified.

However, the economic climate (where readings are only up-to-date through December) is considerably less robust, having fallen off for a series of months; now the economic climate standing is only in its 59.8 percentile, still North of its median but far closer to being 'average' than to being 'wonderful.'

Income expectations (that also lag by one month) rebounded in December but the series has a legacy of recent weakness. Still, income expectations have a very strong standing at their 88th percentile.

Finally, the propensity to buy (where the reading is up-to-date through December) has fallen off in December after popping higher in November. The propensity to buy has a standing in its 78.4 percentile, a relatively firm reading that I would judge as solid but short of being 'strong.'

These ratings wrap up the GfK story for January. Despite turbulence in the EMU stemming from conflict with Italy and Brexit negotiations with the U.K. and some domestic political rejiggering, Germany's assessment of its confidence is still quite strong although we need to watch the clearly deteriorating views of the economy itself. At some point, consumer confidence has to be underpinned by economic performance (except maybe in Italy but more on that below).

The table offers the most up-to-date views available on Italy, France and the U.K. the next largest economies in the EU (at least for a while longer). These readings are only up-to-date through November and lag the GfK message by a whopping two months.

Italy continues oddly to post queue standings for confidence that rival Germany's. This is odd because while German GDP has advanced strongly since the Great Recession, Italy still has real GDP below its cycle peak after a decade of 'growth.' Yet, Italian confidence is nearly 'on the moon' with a 90th percentile standing. France does not yet show readings for the period of the yellow vest protests, but already in November the French reading is below its median (which occurs at a queue standing of 50) with a queue or count percentile standing at its 41.4 percentile. Confidence in France notched lower in October and stayed there in November. The U.K. also slumped in October and stabilized in November. Like France, U.K. confidence is close to the 40th percentile mark (39.9%). Of course, the U.K. is battling for its Brexit deal. These data are not fresh enough to include any of the new disappointment about the way the EU has played hard-ball with the U.K. over Brexit or the rising prospects for a 'hard' Brexit. Still, U.K. confidence is lagging. French confidence is lagging. Italians may be raising a stink about their allowable fiscal deficit, but none of that seems to affect their perceptions of prospects for 'la Dolce Vita.'


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GfK provides a forward-looking peek at German consumer confidence. Its estimate for January sees confidence at the same level as in December at an index reading of 10.4. This reading is in the 91st percentile of all readings since [...]

GfK Consumer Climate Is Unchanged Month-to-Month

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New orders for durable goods rebounded last month. Overall
durable goods orders increased 0.8% (5.3% y/y) during November following a 4.3% October
decline. A 1.5% increase had been expected in the Action
Economics Forecast Survey. Orders for defense aircraft &amp; parts led the gain
with a nearly one-third increase, and they rose by three-quarters y/y. Orders
for civilian aircraft also were firm and posted a 6.7% rise. Orders for motor
vehicles parts eased 0.2% (+8.7% y/y) after a 0.5% rise. Excluding the
transportation sector entirely, durable goods bookings slipped 0.3% (+4.9% y/y)
after a 0.4% increase.

In the capital goods sector, the gain in civilian aircraft
lifted nondefense orders by 0.7%. Elsewhere, orders weakened. Nondefense capital
goods orders less aircraft fell 0.6% (+6.5% y/y), the third decline in the last four months.

Increased orders for metals accounted for the remainder of
last month's rise in orders overall. Primary metals orders rose 1.0% (9.1% y/y)
and fabricated metals increased 0.5% (5.1% y/y). Working the other way,
machinery bookings declined 1.7% (+7.2 y/y) after three consecutive 0.2% gains.
Orders for electrical equipment &amp; appliances fell 0.7% (+5.7% y/y) after a
1.1% rise. Computer &amp; electronic product orders held steady (6.4% y/y) after
a 2.9% jump. Within that grouping, communication product orders rose 0.8% (5.8% y/y).

Shipments of durable goods rose 0.7% during November (6.2%
y/y) following a 0.4% easing. Excluding the transportation sector, however,
shipments held steady (4.6% y/y) after a 3.3% rise. Unfilled orders for durable
goods eased 0.1% (+4.6% y/y) and excluding transportation, order backlogs rose
0.2% (4.9% y/y). Inventories of durable goods rose 0.3% (4.7% y/y) after a 0.2%
improvement. Excluding transportation, inventories increased 0.3% (5.4% y/y)
following a 0.1% uptick.

The durable goods figures are available in Haver's USECON
database. The Action Economics consensus forecast figure is in the AS1REPNA database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Durable Goods NAICS
 Classification</th>
 <th>Nov</th>
 <th>Oct</th>
 <th>Sep</th>
 <th>Nov Y/Y</th>
 <th>2017</th>
 <th>2016</th>
 <th>2015</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >New Orders (SA, % chg)</td>
 <td >0.8</td>
 <td >-4.3</td>
 <td >-0.0</td>
 <td >5.3</td>
 <td >5.4</td>
 <td >-1.7</td>
 <td >-5.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Transportation</td>
 <td >2.9</td>
 <td >-12.3</td>
 <td >0.9</td>
 <td >6.1</td>
 <td >3.4</td>
 <td >-0.7</td>
 <td >-6.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Total Excluding Transportation</td>
 <td >-0.3</td>
 <td >0.4</td>
 <td >-0.5</td>
 <td >4.9</td>
 <td >6.5</td>
 <td >-2.3</td>
 <td >-4.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Nondefense Capital Goods</td>
 <td >0.7</td>
 <td >-4.7</td>
 <td >-3.2</td>
 <td >0.5</td>
 <td >9.1</td>
 <td >-5.8</td>
 <td >-11.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Excluding Aircraft</td>
 <td >-0.6</td>
 <td >0.5</td>
 <td >-0.6</td>
 <td >6.5</td>
 <td >6.7</td>
 <td >-4.5</td>
 <td >-5.5</td>
 </tr>
 <tr>
 <td class="firstcol" >Shipments</td>
 <td >0.7</td>
 <td >-0.4</td>
 <td >0.9</td>
 <td >6.2</td>
 <td >4.0</td>
 <td >-2.4</td>
 <td >-0.8</td>
 </tr>
 <tr>
 <td class="firstcol" >Unfilled Orders</td>
 <td >-0.1</td>
 <td >-0.2</td>
 <td >0.7</td>
 <td >4.6</td>
 <td >2.0</td>
 <td >-1.2</td>
 <td >-2.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Inventories</td>
 <td >0.3</td>
 <td >0.2</td>
 <td >0.8</td>
 <td >4.7</td>
 <td >4.6</td>
 <td >-3.0</td>
 <td >0.9</td>
 </tr>
 </tbody>
 </table>
 
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New orders for durable goods rebounded last month. Overall durable goods orders increased 0.8% (5.3% y/y) during November following a 4.3% October decline. A 1.5% increase had been expected in the Action Economics Forecast Survey. [...]

U.S. Durable Goods Orders Improvement Paced by Aircraft

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Initial unemployment insurance applications increased to
214,000 (-12.4% y/y) during the week ended December 15 from an unrevised 206,000
during the prior week. Initial claims remained near the lowest level since 1969.
The Action Economics Forecast Survey expected 215,000 initial claims. The
four-week moving average of initial claims eased to 222,000. 
The latest claims figure covers the survey period for
December nonfarm payrolls, and there was a 4.9% decline from the November
period. During the last ten years, there has been a 73% correlation between the
level of initial claims and the m/m change in nonfarm payrolls.
Continuing claims for unemployment insurance rose to 1.688
million (-13.4% y/y) in the week ending December 8 from 1.661 million in the
prior week. The four-week moving average of continuing claims rose to 1.673
million.
The insured unemployment rate held steady at 1.2%, near the
record low. The insured unemployment figures date back to 1971.
Insured rates of unemployment vary widely by state. During
the week ending December 1, the lowest rates were in South Dakota (0.40%), North
Carolina (0.43%), Nebraska (0.44%), Indiana (0.49%) and Florida (0.44%). The
highest rates were in Illinois (1.53%), Connecticut (1.78%), California (1.92%),
New Jersey (2.06%) and Alaska (3.10%). Among the other largest states by
population, the rate was 0.96% in Ohio, 0.93% in Texas, 1.41% in New York, 0.57%
in Georgia and 0.52% in Virginia. These state data are not seasonally adjusted.
Data on weekly unemployment claims going back to 1967 are
contained in Haver's WEEKLY database, and they are summarized monthly in USECON.
Data for individual states are in REGIONW. The expectations figure is
from the Action Economics Forecast Survey, carried in the AS1REPNA
database.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" width="734">Unemployment Insurance (SA, 000s)</th>
 <th width="161">12/15/18</th>
 <th width="162">12/08/18</th>
 <th width="162">12/01/18</th>
 <th width="162">Y/Y %</th>
 <th width="162">2017</th>
 <th width="162">2016</th>
 <th width="162">2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="734">Initial Claims</td>
 <td align="center" width="161">214</td>
 <td align="center" width="162">206</td>
 <td align="center" width="162">233</td>
 <td align="center" width="162">-12.4</td>
 <td align="center" width="162">245</td>
 <td align="center" width="162">263</td>
 <td align="center" width="162">278</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="734">Continuing Claims</td>
 <td align="center" width="161">--</td>
 <td align="center" width="162">1,688</td>
 <td align="center" width="162">1,661</td>
 <td align="center" width="162">-13.4</td>
 <td align="center" width="162">1,961</td>
 <td align="center" width="162">2,136</td>
 <td align="center" width="162">2,267</td>
 </tr>
 <tr>
 <td class="firstcol" width="734">Insured Unemployment Rate (%)</td>
 <td align="center" width="161">--</td>
 <td align="center" width="162">1.2</td>
 <td align="center" width="162">1.2</td>
 <td align="center" width="162">
 1.3 
 (Dec. 2017)
 </td>
 <td align="center" width="162">1.4</td>
 <td align="center" width="162">1.6</td>
 <td align="center" width="162">1.7</td>
 </tr>
 </tbody>
</table>
&nbsp;
&nbsp;
Philadelphia Fed Manufacturing Index Declines; Pricing Pressure Holds Steady 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp;&nbsp; December 20, 2018
The Philadelphia Federal Reserve reported that its General
Factory Sector Business Conditions Index declined to 9.4 during December from
12.9 in November. The Action Economics Forecast Survey median estimate was 15.7.
During all of 2018, the index level eased to 21.1 from 27.4 in 2017. These
figures are diffusion indexes where readings above zero indicate expansion. The
percentage of firms reporting an improvement in business activity fell to 26.4%,
down from the high of 48.2% in May of last year. The number reporting a
weakening environment also fell to 17.0%.
Haver Analytics constructs an ISM-Adjusted General Business
Conditions Index and it eased to 54.6 in December from 55.8 in November. This
measure hit a cycle high of 61.9 in March. During the last ten years, there has
been a 65% correlation between the quarterly ISM-adjusted Philadelphia Fed Index
and quarterly real GDP growth.
Working lower was the shipments index to the lowest point in
just over two years. and the inventories series reversed its November increase.
The new orders index actually reversed most of the deterioration in November.
Unfilled orders also rose while the rise in the delivery times index indicated
slightly slower product delivery speeds. 
The employment index held fairly steady near the level of
this past June. During the last ten years there has been a 79% correlation
between the employment index and the month-to-month change in factory sector
payrolls. Twenty-four percent of respondents reported increased hiring, down
from 30%, while a lessened six percent indicated a decrease. The average
workweek reading fell sharply to its lowest level since late-2016. The index of
future employment improved this month, but remained well below its May high.
The index of prices paid was little changed, but the prices
received index improved to the highest level in four months. Forty-two percent
of firms reported higher prices paid, down from 63.1% in August while a higher
four percent paid less, though this was increased from July's reading of 0%. The
future prices paid index was steady m/m and remained down from the April high.
The index measuring expectations of future business
conditions improved m/m, but remained well below its high early last year.
The survey panel consists of 150 manufacturing companies in
the third Federal Reserve District (which consists of southeastern PA, southern
NJ and Delaware). The diffusion indexes represent the percentage of respondents
indicating an increase minus the percentage indicating a decrease in activity.
The ISM-adjusted figure, calculated by Haver Analytics, is the average of five
diffusion indexes: new orders, shipments, employment, delivery times and
inventories with equal weights (20% each). Each ISM-adjusted index is the sum of
the percent responding &quot;higher&quot; and one-half of the percent responding
&quot;same.&quot;
The figures from the Philadelphia Federal Reserve dating back
to 1968 can be found in Haver's SURVEYS database. The expectation from
the Action Economics Forecast Survey is available in AS1REPNA.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" width="1208">Philadelphia Fed - Manufacturing
 Business Outlook Survey (%, SA)</th>
 <th scope="col" width="94">Dec</th>
 <th scope="col" width="94">Nov</th>
 <th scope="col" width="94">Oct</th>
 <th scope="col" width="94">Dec'17</th>
 <th scope="col" width="94">2018</th>
 <th scope="col" width="94">2017</th>
 <th scope="col" width="94">2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="1208">General Factory Sector Business
 Conditions</td>
 <td align="center" width="94">9.4</td>
 <td align="center" width="94">12.9</td>
 <td align="center" width="94">22.2</td>
 <td align="center" width="94">27.9</td>
 <td align="center" width="94">21.1</td>
 <td align="center" width="94">27.4</td>
 <td align="center" width="94">4.9</td>
 </tr>
 <tr>
 <td class="firstcol" width="1208">ISM-Adjusted Business Conditions</td>
 <td align="center" width="94">54.6</td>
 <td align="center" width="94">55.8</td>
 <td align="center" width="94">55.7</td>
 <td align="center" width="94">57.5</td>
 <td align="center" width="94">57.7</td>
 <td align="center" width="94">57.2</td>
 <td align="center" width="94">48.3</td>
 </tr>
 <tr>
 <td class="firstcol" width="1208">&nbsp;&nbsp;New Orders</td>
 <td align="center" width="94">14.5</td>
 <td align="center" width="94">9.1</td>
 <td align="center" width="94">19.3</td>
 <td align="center" width="94">28.2</td>
 <td align="center" width="94">21.1</td>
 <td align="center" width="94">25.4</td>
 <td align="center" width="94">4.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1208">&nbsp;&nbsp;Shipments</td>
 <td align="center" width="94">10.0</td>
 <td align="center" width="94">21.6</td>
 <td align="center" width="94">24.5</td>
 <td align="center" width="94">23.9</td>
 <td align="center" width="94">22.8</td>
 <td align="center" width="94">26.8</td>
 <td align="center" width="94">6.9</td>
 </tr>
 <tr>
 <td class="firstcol" width="1208">&nbsp;&nbsp;Unfilled Orders</td>
 <td align="center" width="94">9.7</td>
 <td align="center" width="94">-4.8</td>
 <td align="center" width="94">-2.3</td>
 <td align="center" width="94">12.8</td>
 <td align="center" width="94">7.1</td>
 <td align="center" width="94">11.9</td>
 <td align="center" width="94">-5.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1208">&nbsp;&nbsp;Delivery Time</td>
 <td align="center" width="94">6.7</td>
 <td align="center" width="94">5.0</td>
 <td align="center" width="94">0.2</td>
 <td align="center" width="94">11.0</td>
 <td align="center" width="94">9.5</td>
 <td align="center" width="94">10.6</td>
 <td align="center" width="94">-4.6</td>
 </tr>
 <tr>
 <td class="firstcol" width="1208">&nbsp;&nbsp;Inventories</td>
 <td align="center" width="94">-0.2</td>
 <td align="center" width="94">9.5</td>
 <td align="center" width="94">-0.8</td>
 <td align="center" width="94">-1.1</td>
 <td align="center" width="94">7.3</td>
 <td align="center" width="94">2.8</td>
 <td align="center" width="94">-9.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="1208">&nbsp;&nbsp;Number of Employees</td>
 <td align="center" width="94">18.3</td>
 <td align="center" width="94">16.3</td>
 <td align="center" width="94">19.5</td>
 <td align="center" width="94">19.7</td>
 <td align="center" width="94">21.5</td>
 <td align="center" width="94">16.2</td>
 <td align="center" width="94">-5.6</td>
 </tr>
 <tr>
 <td class="firstcol" width="1208">&nbsp; Average Workweek</td>
 <td align="center" width="94">0.5</td>
 <td align="center" width="94">6.3</td>
 <td align="center" width="94">20.8</td>
 <td align="center" width="94">12.6</td>
 <td align="center" width="94">15.8</td>
 <td align="center" width="94">14.9</td>
 <td align="center" width="94">-5.4</td>
 </tr>
 <tr>
 <td class="firstcol" width="1208">&nbsp; Prices Paid</td>
 <td align="center" width="94">38.0</td>
 <td align="center" width="94">39.3</td>
 <td align="center" width="94">38.2</td>
 <td align="center" width="94">27.8</td>
 <td align="center" width="94">46.2</td>
 <td align="center" width="94">30.4</td>
 <td align="center" width="94">13.5</td>
 </tr>
 <tr>
 <td class="firstcol" width="1208">Expectations - General Business
 Conditions; Six Months Ahead</td>
 <td align="center" width="94">31.7</td>
 <td align="center" width="94">27.2</td>
 <td align="center" width="94">33.8</td>
 <td align="center" width="94">52.7</td>
 <td align="center" width="94">36.9</td>
 <td align="center" width="94">47.1</td>
 <td align="center" width="94">33.7</td>
 </tr>
 </tbody>
</table>

&nbsp;
U.S. Leading Economic Indicators Rise Slightly 
by <a href="http://www.haver.com/comment/Moeller.html">Tom
Moeller</a>&nbsp; December 20, 2018
The Conference Board's Composite Index of Leading Economic
Indicators edged 0.1% higher (5.9% y/y) during October following a 0.6%
September gain, revised from 0.5%. It was the smallest rise since May. No change
in the index level had been expected in the Action Economics Forecast Survey.
The series is comprised of 10 components which tend to precede changes in the
overall economy.
Movement amongst the components of the index remained mixed
last month. Weakness was led by declines in the unemployment insurance claims
component as well as lower stock prices and fewer building permits. Offsetting
these negative influences were improved consumer expectations for
business/economic conditions, a steeper interest rate spread between 10-Year
Treasuries &amp; Fed funds, higher ISM New Orders index and more nondefense
capital goods orders. The average workweek and new orders for consumer goods had
no effect on the index.
Three-month growth in the leading index declined to 4.8%
(AR), the weakest growth since June.
The Index of Coincident Economic Indicators increased 0.2%
(2.2% y/y) in October following a 0.1% uptick. Each of the index components
contributed positively including changes in personal income less transfer
payments, industrial production, nonagricultural payroll employment and
manufacturing &amp; trade sales.
Three-month growth in the coincident index held steady at
2.3% (AR). It remained improved from 1.6% growth early in the year, but below
its 3.6% peak as of December.
The Index of Lagging Economic Indicators increased 0.4% (2.4%
y/y) after a 0.2% decline, revised from -0.1%. It was the largest rise since
May. The median duration of unemployment, the average prime rate charged by
banks, the CPI for services and the consumer installment credit/personal income
ratio contributed positively to the index change. The change in commercial &amp;
industrial loans outstanding and the change in unit labor costs contributed
negatively to the index change. The ratio of business inventories-to-sales had
no effect on the index change.
The three-month growth in the lagging index jumped to 1.9%,
the quickest growth since June.
The ratio of coincident-to-lagging indicators is often
considered to be another leading indicator of economic activity. As economic
slack diminishes relative to current performance, the ratio will rise. It eased
to 99.2 last month and reversed most of its September rise.
The Conference Board figures are available in Haver's BCI
database; the components are available there, and most are also in USECON.
The expectations are in the AS1REPNA database. Visit the Conference
Board's <a href="http://www.conference-board.org/">site</a> for coverage of
leading indicator series from around the world.
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="831">Business Cycle Indicators (%)</th>
 <th scope="col" width="148">Nov</th>
 <th scope="col" width="148">Oct</th>
 <th scope="col" width="148">Sep</th>
 <th scope="col" width="148">Nov Y/Y</th>
 <th scope="col" width="148">2017</th>
 <th scope="col" width="148">2016</th>
 <th scope="col" width="148">2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="831">Leading</td>
 <td align="center" width="148"></td>
 <td align="center" width="148">0.1</td>
 <td align="center" width="148">0.6</td>
 <td align="center" width="148">5.9</td>
 <td align="center" width="148">4.1</td>
 <td align="center" width="148">1.2</td>
 <td align="center" width="148">4.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="831">Coincident</td>
 <td align="center" width="148"></td>
 <td align="center" width="148">0.2</td>
 <td align="center" width="148">0.1</td>
 <td align="center" width="148">2.2</td>
 <td align="center" width="148">1.8</td>
 <td align="center" width="148">1.3</td>
 <td align="center" width="148">2.2</td>
 </tr>
 <tr>
 <td class="firstcol" width="831">Lagging</td>
 <td align="center" width="148"></td>
 <td align="center" width="148">0.4</td>
 <td align="center" width="148">-0.2</td>
 <td align="center" width="148">2.4</td>
 <td align="center" width="148">2.6</td>
 <td align="center" width="148">2.9</td>
 <td align="center" width="148">3.7</td>
 </tr>
 </tbody>
</table>


</body>

</html>

Initial unemployment insurance applications increased to 214,000 (-12.4% y/y) during the week ended December 15 from an unrevised 206,000 during the prior week. Initial claims remained near the lowest level since 1969. The Action [...]

U.S. Initial Claims for Unemployment Insurance Rise

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<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/181220j.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181220j.png"></a>
 <a href="/comment/181220k.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181220k.png"></a>

The Conference Board's Composite Index of Leading Economic
Indicators improved 0.2% (5.2% y/y) during November following a 0.3% October
decline, revised from +0.1%. No change in the index level had been expected in
the Action Economics Forecast Survey. The series is comprised of 10 components
which tend to precede changes in the overall economy.

Movement amongst the components of the index remained mixed
last month. Positive influences on the index were a greater number of building
permits, a higher ISM new orders index, improved consumer expectations for
business/economic conditions, a steeper interest rate spread between 10-Year
Treasuries &amp; Fed funds, more nondefense capital goods orders as well as more
consumer goods &amp; material orders. Negative influences on the index was
provided by lower stock prices, a decline in average weekly hours-worked and
higher initial unemployment insurance claims.

Three-month growth in the leading index declined to 2.2%
(AR), the weakest growth in two years.

The Index of Coincident Economic Indicators increased 0.2%
(2.1% y/y) in November following a 0.1% uptick during October, revised from
0.2%. Each of the index components contributed positively including changes in
personal income less transfer payments, industrial production, nonagricultural
payroll employment and manufacturing &amp; trade sales.

Three-month growth in the coincident index eased to 1.9%
(AR). That was below the 3.6% peak as of December 2017 and below the 3.1% growth
rate in August.

The Index of Lagging Economic Indicators increased 0.4% last
month (2.8% y/y) following a 0.5% October rise, revised from 0.4%. The change in
commercial &amp; industrial loans outstanding, the average duration of
unemployment, the six-month change in unit labor costs and the consumer
installment credit/personal income ratio contributed positively to the index
change. Six-month growth in the services CPI contributed negatively. The average
prime rate and the ratio of business inventories-to-sales had no effect on the
index change.

The three-month growth in the lagging index strengthened
2.7%, the quickest growth since June and up from no change as of August.

The ratio of coincident-to-lagging indicators is often
considered to be another leading indicator of economic activity. As economic
slack diminishes relative to current performance, the ratio will rise. It eased
to 99.0 last month, the lowest level since June.

The Conference Board figures are available in Haver's BCI
database; the components are available there, and most are also in USECON.
The expectations are in the AS1REPNA database. Visit the Conference
Board's <a href="http://www.conference-board.org/">site</a> for coverage of
leading indicator series from around the world.

<a href="/comment/181220l.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181220l.png"></a>
 <a href="/comment/181220m.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181220m.png"></a>

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Business Cycle Indicators (%)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Leading</td>
 <td >0.2</td>
 <td >-0.3</td>
 <td >0.6</td>
 <td >5.2</td>
 <td >4.1</td>
 <td >1.2</td>
 <td >4.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Coincident</td>
 <td >0.2</td>
 <td >0.1</td>
 <td >0.2</td>
 <td >2.1</td>
 <td >1.8</td>
 <td >1.3</td>
 <td >2.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Lagging</td>
 <td >0.4</td>
 <td >0.5</td>
 <td >-0.2</td>
 <td >2.8</td>
 <td >2.6</td>
 <td >2.9</td>
 <td >3.7</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The Conference Board's Composite Index of Leading Economic Indicators improved 0.2% (5.2% y/y) during November following a 0.3% October decline, revised from +0.1%. No change in the index level had been expected in the Action [...]

U.S. Leading Economic Indicators Increase

Next year's inflation forecasts are on the rise and above target

Disrupted global supply chains placing upward pressure on US goods prices

Construction of data centers has overtaken transportation construction in US

Elevated energy prices putting intense upward pressure on input prices around the globe

US is big leader in global surge in private AI investment

Larger-than-usual income tax refunds this year are supporting consumer spending

Sharply rising share of AI-related jobs

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

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Andrew Cates

**US Outperformance Holds; Europe and China Continue to Disappoint**
One of the most persistent features of the global macro landscape in 2026 has been the widening divergence between growth outcomes in the United States and those in Europe and China. Citigroup’s global growth surprise indices—which measure the gap between actual economic releases and consensus expectations—capture this divergence with unusual clarity. US data have continued to surprise on the upside, supported by resilient consumer spending, a stronger-than-expected labour market and the ongoing AI-driven capital spending boom. The picture elsewhere is less encouraging. Growth surprises have turned negative across the euro area, reflecting the cumulative toll of elevated energy costs, weak industrial activity and subdued business confidence. And China's growth surprise index has also fallen sharply in recent weeks, with weaker-than-expected retail sales and fixed asset investment data for May this week reinforcing concerns that domestic demand remains fragile and that policy support is yet to gain meaningful traction.

260618Z1.jpg

**The Oil Risk Premium in the UK Has Been Fading**
One of the more notable features of UK markets this year has been the close relationship between oil prices and two-year gilt yields. The link is not mechanical, but in an economy heavily exposed to imported energy, swings in oil prices can materially alter the inflation outlook and, by extension, expectations for Bank of England policy. That relationship was on display again this week. A softer-than-expected UK CPI reading for May—helped in part by easing energy price pressures—led investors to scale back expectations that inflation would remain persistently above target, pushing two-year gilt yields to their lowest level in six weeks. The question now is whether this marks the start of a more sustained easing in inflation pressures or merely a temporary reprieve. Much will depend on whether the recent decline in oil prices following the US-Iran ceasefire agreement proves durable.

260618Z2.jpg

**The AI Investment Boom Is Rewriting the Rule Book for the Chip Industry**
If the divergence in global growth surprises noted above tells a story of a world economy under strain, the semiconductor sales data tell a very different one — of a technology-driven investment cycle that is accelerating almost regardless of the broader macro environment. Global semiconductor sales have surged to record levels over the past twelve months, driven primarily by insatiable demand for the chips that underpin AI infrastructure: graphics processing units, high-bandwidth memory, and advanced logic chips. Data centre capital expenditure from the hyperscalers continues to exceed even the most optimistic forecasts from a year ago, and the investment pipeline shows no sign of moderating. The gains are concentrated in AI-adjacent products; legacy chips for consumer electronics and industrial applications remain relatively soft.

260618Z3.jpg

**Copper Holds Firm As Oil Retreats**
The commodity markets are telling two quite different stories this week, and the contrast is instructive. Oil has moved sharply lower on the US-Iran MoU news as investors trim the conflict risk premium that has been embedded in energy markets since March — a welcome development for inflation and central bank optionality alike. But the three commodities shown in this chart tell a different story. Copper, one of the most reliable proxies for global electricity infrastructure investment, remains near multi-year highs, reflecting the extraordinary volume of data centre construction, grid expansion and electrification spending flowing through the global economy. Aluminium — energy-intensive to produce and increasingly in demand for the structural components of both data centres and electric vehicles — has, until quite recently, held its ground. Lithium hydroxide, the battery-grade refining product that sits at the heart of the energy storage supply chain, has seen some cyclical softness but remains structurally underpinned by the scale of demand being projected for grid-scale storage and electric mobility over the next decade.

260618Z4.jpg

**Is Energy Availability a Binding Constraint on Growth?**
This next chart is a scatter plot that maps electricity generation per capita against GDP growth per capita across a broad sample of countries over the past five years. The positive relationship is striking. Economies with higher electricity generation per capita, including the United States, have generally delivered stronger GDP growth, while those with more constrained electricity systems have tended to lag. The obvious objection is reverse causality: richer economies generate more electricity because they have more to power. That is partly true. But the broader evidence is difficult to dismiss. The US shale revolution delivered an abundance of cheap energy that supported a sustained period of industrial outperformance relative to many advanced economies. Mainstream commentary often attributed this advantage to factors such as labour market flexibility or technological innovation, but energy costs were arguably at least as important.

260618Z5.jpg

**Corporate America Is Investing from a Position of Unusual Financial Strength**
The surge in US corporate investment—particularly in AI infrastructure, data centres and semiconductors—has inevitably drawn comparisons with the late-1990s dot-com boom. Yet the financial balance data suggest an important difference. During the dot-com era, US non-financial corporates moved into a financial deficit approaching 4% of GDP, relying heavily on external financing to fund investment. Today, despite another ambitious investment cycle, the sector remains in surplus, currently around 1.8% of GDP. Corporate America is investing aggressively, but it is still generating more cash than it is spending. The boom is being financed largely through profits rather than debt. Risks remain—not least the growing fiscal burden on the federal government—but the balance-sheet fragilities that turned previous investment booms into systemic crises appear far less pronounced. If a major constraint emerges in the years ahead, it may be energy and resources rather than leverage.

260618Z6.jpg

The signing of a Memorandum of Understanding (MoU) between the United States and Iran earlier this week has offered financial markets their most significant moment of geopolitical relief since the Middle East conflict escalated in early March. Oil prices fell sharply on the news, short-dated bond yields moved lower across several major economies, and risk assets recovered ground. But relief, as investors have learnt repeatedly over the past three months, is arguably not the same as resolution. The MoU sets a framework for negotiations rather than a final settlement, and the history of US-Iran diplomacy is not one that encourages complacency. Meanwhile, the Federal Reserve — concluding its June meeting yesterday under new chair Kevin Warsh — held rates steady but delivered a distinctly hawkish dot plot that shifted the median year-end projection from a cut to a hike, a reminder that the easing cycle the market had been pricing is no longer the base case. Against this backdrop, this week's charts take stock of where the global economy presently stands — and what the underlying data, beneath the geopolitical noise, are telling us. The picture that emerges is one of divergence. The United States continues to outperform consensus growth expectations while Europe and China disappoint (chart 1). UK short-dated yields have tracked oil prices with unusual consistency this year, and today's softer-than-expected CPI print for May — arriving just as the MoU has knocked crude lower — potentially changes the policy calculus for the Bank of England (chart 2). Global semiconductor sales, meanwhile, are storming ahead regardless of the geopolitical noise, powered by AI infrastructure spending that shows no sign of fatigue (chart 3). A cross-section of commodity prices tells two stories simultaneously: the geopolitical risk premium is draining out of oil, but the metals and materials the AI economy actually needs — copper, uranium, critical minerals — are holding firm (chart 4). Meanwhile a cross-country scatter of electricity generation and GDP growth over the past five years raises a question that deserves more attention than it typically gets: is energy availability a constraint on growth, or merely a consequence of it? The evidence, we would argue, points firmly in one direction (chart 5). And finally, for all the comparisons being drawn between the current investment boom and the late 1990s, the financial balance of the US corporate sector tells a rather different story — one that matters for how any correction might unfold (chart 6).

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/7rw2v1Ri8gUVHbFrZfgANL?utm_source=generator&si=75d98727e9524d75" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Between Relief and Reality

Winnie Tapasanun

260618N12.jpg

260618O12.jpg

The current general activity diffusion index rebounded to a slightly stronger-than-expected 10.3 in June following a 27.1-point drop to -0.4 in May, the latest Manufacturing Business Outlook Survey (MBOS) from the Federal Reserve Bank of Philadelphia showed, indicating a return to expansion in manufacturing activity in the Third Federal Reserve District this month. A reading of 10.0 for June had been expected by the Action Economics Forecast Survey. June marked the fifth m/m increase in six months, showing a sharp improvement from -1.4 in June 2025. In June, 32.1% of firms reported increases in current general activity (up from 22.5% in May), while 21.9% reported decreases (down from 22.9%); 45.4% reported no change (down from 54.6%). Survey responses were collected from June 8 to June 15.

Haver Analytics calculates an ISM-adjusted current activity diffusion index from five key components using the methodology along the lines of the national ISM index. The index rose to 53.1 in June after a 4.8-point decline to a contraction-level 49.7 in May, indicating manufacturing activity expanded for the third time in four months; it was slightly above 51.0 in June 2025.

In the latest survey, the new orders index surged to 27.3 in June following a 34.7-point plunge to -1.7 in May, signaling new orders expanded for the sixth time in seven months. The shipments index rebounded to 14.9 this month from 4.9 in May, registering the seventh consecutive expansion. The unfilled orders index advanced to 10.5 from -2.5, indicating expansion for the first time since July 2025 and the highest level since January 2025. In contrast, the inventories index dropped to -8.5 in June from 6.6 in May, showing inventories contracted for the second time in three months and at the lowest level since July 2024. Meanwhile, the delivery times index increased to -2.6 this month from -10.4 in May (the lowest reading since March 2024).

On the labor front, the number of employees index climbed to 7.9 in June from -2.8 in May, indicating employment expanded for the first time in three months and at the highest level since January. In June, a higher 17.0% of respondents reported increases in employment, while 9.2% reported declines; 73.8% reported no change in employment levels. The average employee workweek index fell to -6.5 this month, the first negative reading and lowest since February, from 1.2 in May.

Inflation indicators were mixed in June. The prices paid index rose to 53.2 this month following an 11.4-point drop to 47.9 in May. A higher 53.5% of respondents reported increases in input prices in June, while only 0.4% reported decreases. The prices received index fell to 20.3, a four-month low, after a 7.2-point May decline to 26.3. In June, 20.3% of respondents reported increases in prices received, while 0.0% reported decreases.

The future indexes remained in positive territory, signaling continued overall growth over the next six months, with most future indicators rising. The future general activity diffusion index edged down to 50.2 in June from 53.2 in May, staying positive since February 2024. Future indexes for new orders (60.8 vs. 53.5) and shipments (60.3 vs. 45.7) increased in June (vs. May) and remained positive. Notably, the future capital expenditures index rose to 41.2 this month, the highest level since June 2021, from 30.9 in May. The following future indexes slipped in June (vs. May) but stayed in positive territory: employment (30.8 vs. 31.7), unfilled orders (17.3 vs. 19.2), and inventories (10.0 vs. 11.8). Prices continued to increase, with the future prices paid index easing to a still-elevated 63.2 in June from 70.0 in May and the future prices received index rising to 67.2, the highest level since August 2021, from 60.5.

The Manufacturing Business Outlook Survey (MBOS), conducted by the Federal Reserve Bank of Philadelphia, is a monthly survey of manufacturers in the Third Federal Reserve District. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants. The diffusion indexes in the MBOS represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. The indexes range from -100 to +100 with positive values indicating an increase in activity. The series from the survey dating back to May 1968 can be found in Haver’s **SURVEYS** database. The expectations forecast figures are from the Action Economics Forecast Survey in **AS1REPNA**.

260618P12.jpg

260618Q12.jpg

- Current General Activity Index up 10.7 pts. to 10.3 in June; fifth rise in six months.
- New Orders (27.3), sixth expansion in seven mths.; Shipments (14.9), seventh straight expansion; Unfilled Orders (10.5), first expansion since July ’25.
- Employment (7.9), a five-month high after two mths. of contraction.
- Inflation indicators: Prices Paid up (53.2); Prices Received down (20.3, a four-month low).
- Future General Activity Index down to a still-expansion-level 50.2; most subindexes up and positive; future price indexes remaining above long-run avgs.

U.S. Philadelphia Fed Index Returns to Positive Territory in June

260618E.jpg

Unemployment in the European Monetary Union stayed at 6.3% in April, just a tick above its all-time low. In the more inclusive EU, the unemployment rate hovered at 6%, just two tenths of a percentage point above its all-time low. Unemployment conditions in the monetary union remain low without many signs of acceleration.

The unemployment rate in April fell in Italy, Ireland, Greece, Portugal, and the Netherlands. The unemployment rate increased month-to-month in Finland.

In March, the unemployment rate declined in Austria, Belgium, Germany, Finland, Italy, and the Netherlands. It rose month-to-month in Greece and Luxembourg.

Over three months, the unemployment rate in these 12-early reporting monetary union members fell in five countries: Belgium, Germany, Italy, Ireland, and the Netherlands. In contrast, unemployment rose in five countries: Portugal, Greece, France, Finland, and Austria.

Over six months, unemployment rates fell in six countries: the Netherlands, Portugal, Italy, Germany, Belgium, and Austria. This was against increases in six countries: Greece, Finland, France, Luxembourg, Spain, and Ireland.

Year over year, the degree of inflation progress is much thinner, with the unemployment rates falling in only three countries Italy, Spain, and Portugal with increases in unemployment for all the other countries in the table.

Unemployment rates continue to rank low in the monetary union, with only three monetary union countries having their unemployment rates ranked above 50%, putting them above their respective medians on data back to the year 2000. Those three countries are Luxembourg, Finland, and Austria. For the remaining countries, the rankings of their unemployment rates over this period are not even as high as their 30th percentiles. Italy, at present, is experiencing its lowest unemployment rate of the period.

Unemployment conditions in the monetary union remain solid. The past two weeks were significant for monetary policy and global economics, with the ECB raising rates, Japan raising rates, and the United States keeping rates unchanged but moving away from an easing bias in policy that had been in effect for quite a number of months. Today the Bank of England, after experiencing some significant inflation progress, decided to keep its policy on hold for another session. An agreement between the U.S. and Iran securing an opening of the Strait of Hormuz was signed, paving the way for potentially improved oil flows, lower inflation, and less uncertainty in the period ahead.

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EMU Unemployment Remains Low

Sandy Batten

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Total retail sales rose a much larger-than-expected 0.9% m/m (6.9%y/y) in May following a slightly downwardly revised 0.4% monthly gain in April (previously 0.5% m/m), according to data released by the U.S. Census Bureau. The Action Economics Forecast Survey looked for a 0.5% m/m gain. Excluding autos, other sales increased 0.8% m/m (7.5% y/y) after an unrevised 0.7% m/m increase in April. Expectations were for a 0.5% monthly rise.

Elevated retail gasoline prices continued to boost the value of gasoline sales in May. Gasoline sales increased 3.4% m/m (26.5% y/y) in May on top of a 2.8% m/m increase in April. However, both monthly increases were slower than the 14.2% monthly jump reported in March. Gasoline sales accounted for 31% of total sales in May. However, sales were solid even without gasoline sales. Total sales excluding gasoline rose 0.7% m/m in April, up from 0.2% m/m in April. Sales excluding both autos and gasoline increased 0.5% m/m in May, the same monthly gain as in April.

The control group of sales (total sales excluding food services, autos, gasoline and building materials that the BEA uses to construct PCE in the national accounts) posted another solid increase in May, rising 0.7% m/m (6.3% y/y) following an unrevised 0.5% monthly increase in April. The strong performance at the end of Q1 followed by solid gains in April and May put the April-May level of control group sales up 8.6% at an annual rate from the Q1 average, pointing to another solid contribution by consumption to overall GDP growth in Q2. Consumer spending remains surprisingly resilient notwithstanding the recent hit to disposable income from the marked increase in energy prices.

Sales generally increased across major sectors in May. Auto sales rebounded, rising 1.2% m/m in May and more than reversing the 0.9% monthly decline in April. This was the third gain in auto sales in the past four months. Furniture sales rose 1.0% m/m but sales at electronics and appliance stores slipped 0.5% m/m. Building material sales gained 1.0% m/m on top of a 1.1% monthly increase in April. Clothing sales rose 0.3% m/m. Sales at general merchandise stores gained 0.4% m/m in May. Miscellaneous sales jumped 2.3% m/m in May, their first monthly gain in three months. Sales by nonstore retailers continued their strong performance, increasing 1.5% m/m in May on top of a 1.1% monthly rise in April. Over the first five months of this year, nonstore retail sales have risen 7.2%, not annualized. By contrast, food sales were unchanged in May from April while sales at restaurants edged down 0.1% m/m in May, their first monthly decline in four months.

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Total sales increased 0.9% m/m in May, nearly twice expectations.
- Auto sales rebounded, rising 1.2% m/m in May, more than reversing a 0.9% monthly decline in April. 
- Gasoline sales rose 3.4% m/m in May.
- Excluding auto and gasoline sales, remaining sales increased by a solid 0.5% m/m in May, the same monthly increase as in April.
- Sales of the retail control group that is used to construct PCE rose 0.7% m/m in May and are 8.6% annualized above the Q1 average.

U.S. Retail Sales Jumped More than Expected in May

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Mortgage applications fell 3.8% w/w (+8.6% y/y) in the week ending June 12 following a 10.8% rebound in the week ending June 5, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. The latest reading was the fourth w/w fall in five weeks, lowering the index to 269.5. Applications for loans to purchase a house slid 3.4% (+3.0% y/y) in the June 12 week, down for the fourth time in five weeks, after a 7.3% rise in the previous week. Applications for loan refinancing dropped 4.5% (+17.0% y/y) in the June 12 week, the seventh w/w decline in eight weeks, following a 15.3% jump in the June 5 week.

The effective interest rate on a 30-year fixed-rate loan was unchanged at 6.78% in the week ending June 12; it was above a low of 6.24% in the February 27 week but below a peak of 8.12% in the week of October 20, 2023. The rate on 15-year fixed-rate mortgages edged up 2bps to 6.18% in the June 12 week, the highest in three weeks, from 6.16% in the previous week; it was up from a low of 5.60% in the week of September 20, 2024 but down from a high of 7.44% in the week of October 27, 2023. Meanwhile, the rate on 30-year jumbo loans declined 4bps to 6.78% in the June 12 week from 6.82% in the prior week; it was above a low of 6.25% in the February 27 week but below a high of 7.99% in the week of October 27, 2023. The rate on a 5-year ARM fell 7bps to 6.16% in the June 12 week, the first w/w decline in six weeks, from 6.23% in the previous week (the highest since the week of August 15, 2025); it was above a low of 5.38% in the February 20 week but below a high of 7.31% in the week of October 27, 2023.

The share of applications for refinancing an existing loan edged up to 40.3% of total applications in the week ending June 12—the fourth w/w increase in five weeks and the highest level since the May 15 week—after rising to 40.2% in the week ending June 5; it remained below a peak of 61.9% in the January 16 week but above a low of 34.6% in the week of May 23, 2025. The adjustable-rate mortgage (ARM) share of activity slipped to 8.5% in the June 12 week from 8.6% in the prior week; it was below a peak of 12.9% in the week of September 12, 2025 but above a low of 4.7% in the week of January 3, 2025.

The average size of a mortgage loan fell 1.5% w/w (+3.7% y/y) to $394,100 in the June 12 week, the lowest level since the April 3 week, after a 0.4% rebound to $399,900 in the June 5 week. The average size of a purchase loan dropped 1.9% (+4.0% y/y) to $456,600 in the June 12 week following a 2.8% recovery to $465,300 in the prior week. The average size of a loan to refinance a mortgage fell 0.4% (+7.0% y/y) to $301,400 in the June 12 week on top of a 2.3% decline to $302,500 in the previous week, marking the third consecutive w/w fall, the sixth decline in seven weeks, and the lowest level since the week of July 25, 2025.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

- Purchase applications -3.4% w/w, down for fourth time in five weeks; refinance applications -4.5% w/w, seventh fall in eight weeks.
- Effective interest rate on 30-year fixed loans unchanged at 6.78%, up from a late-February low of 6.24%.
- Average loan size down for the second time in three weeks, lowest since the April 3 week.

Economy in Brief

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State Labor Markets in November

U.S. Personal Income and Spending Gains Slow; Pricing Power Is Weak

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