Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100405g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>So far only the UK is showing a sharp shift in its rate of
money growth. But the e-Zone is showing a small money growth revival.
US money growth has been dropping very rapidly but is showing a hint of
stability- still its sequential rates of growth continue to ramp down.
Japan&#8217;s money growth that has so very steady has taken a step lower.
But Japan&#8217;s Tankan report suggests that the economy there is getting
better and that the downturn in money growth may not be signaling a new
round of weakness. In truth central banks have not taken their cues
from money growth for some time. Is that about to change?</p>
<p>EMU, the US and the UK have seen the biggest winding down in
money growth rates from their cycle peaks. The UK has seen that
wind-down give way to a bounce. The US shows a hint of some
stabilization in money growth but real balances are contacting over the
most recent three-months. EMU shows only a slowing in the pace of money
supply deceleration in its Yr/Yr trends but real balances over
three-months have posted positive growth. . In the Zone Credit to
residents and loans continue to contract in real terms but they are
slowing their pace of contraction, too.</p>
<p>Money growth rates seem to be showing signs - or at least
hints -of stabilization. In the US the jobs figures for March hint that
the period of job contraction may have some to a close. In Japan the
tankan report was better than expected. EMU and the UK continue to blow
and hot and cold reports back and forth. Europe still seems to be
having a tough time posting consistent growth numbers. EMU, in
particular is dealing with PR issues and the reality of very divergent
circumstances across member countries, challenging the ECB. The UK
continues to get battered with some seasonably extreme weather but also
to continue to issue a very uneven stream of economic reports.</p>
<p>In the wake of the US jobs report the entire global picture is
looking better. Commodity prices tell a story of new confidence in
growth prospects. Money supply trends do not wave any cautionary flags
about building inflation, however. The UK has persistently high money
growth and is also experiencing an inflation overshoot. The Bank of
England has said it will let it run its course since it views the
overshoot as being not problematical. In the US, with job growth coming
on stream, &#8216;inflationists&#8217; are sounding warning signals. In Europe
recent German inflation reports have been boosted by rising oil prices,
this will make the ECB wary regardless of other zone issues. Bond
yields are moving up.</p>
<p>It is true that there is a shifting of trends and of risks but
it is really even more subtle than what it seems. There remains a great
deal of slack in the global economy. In the US alone the recession
displaced eight and one-half million people (net!). Putting 162,000
back to work in one month can&#8217;t ramp up much of an inflation risk can
it? I suspect that fears of inflation are overdone and commodity prices
which are reacting to something else (call it perceived scarcity) are
acting as a misaligned lighting rod for inflation fears.</p>
<p>We do think this cycle is entering a different, better, growth
phase globally, but we do not think inflation is much of a threat. We
think this confusion will however drive prices and bond yields quite
possibly too far ahead whatever risks may emerge.</p>
<a href="http://www.haver.com/COMMENT/archive.htm">
</a>
<p></p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"><b>Look at
Global and Euro Liquidity Trends</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Saar-all</td>
<td style="font-weight: bold;" colspan="3">Euro Measures (E13):
Money &amp; Credit</td>
<td style="font-weight: bold;" colspan="3">G-10 Major Markets:
Money</td>
<td style="font-weight: bold;">Memo</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">&#8364;-Supply M2</td>
<td style="font-weight: bold;">Credit:Resid</td>
<td style="font-weight: bold;">Loans</td>
<td style="font-weight: bold;">$US M2</td>
<td style="font-weight: bold;">&#163;UK M4</td>
<td style="font-weight: bold;">&#165;Jpn M2+Cds</td>
<td style="font-weight: bold;">OIL:WTI</td>
</tr>
<tr class="odd">
<td class="firstcol">3-MO</td>
<td>3.1%</td>
<td>0.1%</td>
<td>0.7%</td>
<td>0.4%</td>
<td>33.8%</td>
<td>1.6%</td>
<td style="color: red;">-10.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-MO</td>
<td>0.6%</td>
<td style="color: red;">-0.2%</td>
<td style="color: red;">-0.1%</td>
<td>2.5%</td>
<td>21.1%</td>
<td>2.4%</td>
<td>14.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">12-MO</td>
<td>1.4%</td>
<td style="color: red;">-0.2%</td>
<td style="color: red;">-0.8%</td>
<td>2.1%</td>
<td>11.0%</td>
<td>2.7%</td>
<td>94.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">2Yr</td>
<td>4.7%</td>
<td>3.0%</td>
<td>1.9%</td>
<td>5.7%</td>
<td>14.3%</td>
<td>2.4%</td>
<td style="color: red;">-10.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">3Yr</td>
<td>6.9%</td>
<td>6.4%</td>
<td>4.9%</td>
<td>6.1%</td>
<td>13.4%</td>
<td>2.4%</td>
<td>8.8%</td>
</tr>
<tr style="font-weight: bold;">
<td colspan="8" class="firstcol">Real Balances: deflated
by Own CPI. Oil deflated by US CPI</td>
</tr>
<tr class="odd">
<td class="firstcol">3-MO</td>
<td>1.9%</td>
<td style="color: red;">-1.2%</td>
<td style="color: red;">-0.5%</td>
<td style="color: red;">-0.9%</td>
<td>27.3%</td>
<td>0.8%</td>
<td style="color: red;">-11.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">6-MO</td>
<td style="color: red;">-0.8%</td>
<td style="color: red;">-1.6%</td>
<td style="color: red;">-1.5%</td>
<td>0.6%</td>
<td>16.4%</td>
<td>2.4%</td>
<td>12.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">12-MO</td>
<td>0.5%</td>
<td style="color: red;">-1.1%</td>
<td style="color: red;">-1.7%</td>
<td style="color: red;">-0.1%</td>
<td>7.7%</td>
<td>3.9%</td>
<td>90.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">2Yr</td>
<td>3.6%</td>
<td>2.0%</td>
<td>0.9%</td>
<td>4.5%</td>
<td>10.9%</td>
<td>3.0%</td>
<td style="color: red;">-11.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">3Yr</td>
<td>5.0%</td>
<td>4.6%</td>
<td>3.1%</td>
<td>3.9%</td>
<td>10.3%</td>
<td>2.4%</td>
<td>6.5%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">All figures
are through February</td>
</tr>
</tbody>
</table>
</body></html>

So far only the UK is showing a sharp shift in its rate of money growth. But the e-Zone is showing a small money growth revival. US money growth has been dropping very rapidly but is showing a hint of stability- still its sequential [...]

Money Supply Growth Begins To Shift – Is That All?

Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100405d.jpg" align="left" border="0" height="265" width="353"></p>
<p>It appears that snow-storms in February didn't dampen home
sales as much as during the prior month. The National Association of
Realtors (NAR) reported that pending sales of existing single-family
homes recovered virtually all of the January decline with an 8.2%
increase. The recovery left home sales up nearly one-quarter from the
low in January of last year. The latest gain compares with Consensus
expectations for a slight m/m decline.</p>
<p>The m/m performance of home sales varied across the country. A
large increase in the Midwest was accompanied by smaller increases in
the Northeast and in the South while sales fell in the West.</p>
<p>These home sales figures are analogous to the new home sales
data from the Commerce Department in that they measure existing home
sales when the sales contract is signed, not at the time the sale is
closed. The series dates back to 2001 and the data is available in
Haver's <b>PREALTOR </b>database.</p>
<p><b>How Much Is That Home Really Worth? Appraisal Bias
and House-Price Uncertainty </b>from the Federal Reserve Bank of
Philadelphia can be found <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2010/q1/brq110_home-worth-appraisal-bias.pdf">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100405e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100405f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Pending Home Sales (2001=100)&nbsp;</a></b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>97.6</td>
<td>90.2</td>
<td>97.8</td>
<td>&nbsp;&nbsp;17.3%</td>
<td>95.1</td>
<td>86.9</td>
<td>95.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>77.7</td>
<td>71.3</td>
<td>78.1</td>
<td>18.8</td>
<td>76.7</td>
<td>73.0</td>
<td>86.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>97.9</td>
<td>80.4</td>
<td>89.2</td>
<td>18.7</td>
<td>88.8</td>
<td>80.7</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>107.0</td>
<td>98.0</td>
<td>100.2</td>
<td>17.5</td>
<td>98.9</td>
<td>90.3</td>
<td>107.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>98.0</td>
<td>102.9</td>
<td>118.5</td>
<td>14.6</td>
<td>109.9</td>
<td>99.2</td>
<td>92.1</td>
</tr>
</tbody>
</table>
</body></html>

It appears that snow-storms in February didn't dampen home sales as much as during the prior month. The National Association of Realtors (NAR) reported that pending sales of existing single-family homes recovered virtually all of the [...]

U.S. Pending Home Sales Unexpectedly Recover

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100405a.jpg" align="left" border="0" height="265" width="353"></p>
<p>The service sector clearly is on the road to recovery. The
Institute for Supply Management's (ISM) Composite Index for the service
&amp; construction sectors rose in March to 55.4 from 53.0 in
February. It was the third consecutive monthly indication of solid
expansion and was the index's highest level since early-2006. Moreover,
the series has risen considerably from a low of 37.2 late in 2008. The
latest figure exceeded Consensus expectations for a reading of 54.0.
Since the series' inception in 1997 there has been a 65% correlation
between the level of the composite index in the nonmanufacturing sector
and the q/q change in real GDP for the services and the construction
sectors.</p>
<p>ISM surveys more than 370 purchasing managers in more than 62
industries including law firms, hospitals, government and retailers.
The nonmanufacturing survey dates back to July 1997. The figures are
available in Haver's <b>USECON </b>database.</p>
<p>The business activity index for the nonmanufacturing sector
surged m/m to 60.0 which was the highest level since early-2006. The
new orders index also rose considerably to 62.3, the highest level
since 2005. Thirty-seven percent of respondents reported higher orders
while only 14% reported them lower. Finally, the employment index rose
to nearly break-even. The latest level of 49.8 was the highest level
since April 2008 and was up sharply from the late-2008 low. Since the
series' inception in 1997 there has been an 80% correlation between the
level of the ISM nonmanufacturing employment index and the m/m change
in payroll employment in the service-producing plus the construction
industries.</p>
<p>Pricing power also improved to the strongest since September
2008 and was up sharply from the 2008 low. Thirty-two percent of
respondents reported higher prices while just 5% reported them lower.
At the worst, late in 2008, 41% reported lower prices. Since its
inception ten years ago, there has been a 73% correlation between the
price index and the q/q change in the GDP services chain price index.</p>
<p>Beginning with the January 2008 Nonmanufacturing <cite>Report
On Business</cite>&#174;, the composite index is calculated as an
indicator of the overall economic condition for the non-manufacturing
sector. It is a composite index based on the diffusion indices of four
of the indicators (business activity, new orders, employment and
supplier deliveries) with equal weights. The latest report from the ISM
can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100405b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100405b.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM
Nonmanufacturing Survey</a></b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>March '09</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>55.4</td>
<td>53.0</td>
<td>50.5</td>
<td>41.2</td>
<td>46.2</td>
<td>47.3</td>
<td>53.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Business
Activity</td>
<td>60.0</td>
<td>54.8</td>
<td>52.2</td>
<td>44.5</td>
<td>48.0</td>
<td>47.4</td>
<td>56.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; New Orders</td>
<td>62.3</td>
<td>55.0</td>
<td>54.7</td>
<td>39.4</td>
<td>47.9</td>
<td>47.0</td>
<td>54.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Employment</td>
<td>49.8</td>
<td>48.6</td>
<td>44.6</td>
<td>32.8</td>
<td>39.9</td>
<td>43.8</td>
<td>52.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Supplier
Deliveries (NSA)</td>
<td>49.5</td>
<td>53.5</td>
<td>50.5</td>
<td>48.0</td>
<td>49.0</td>
<td>51.1</td>
<td>51.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Index</td>
<td>62.9</td>
<td>60.4</td>
<td>61.2</td>
<td>40.8</td>
<td>49.4</td>
<td>66.0</td>
<td>63.8</td>
</tr>
</tbody>
</table>
</body></html>

The service sector clearly is on the road to recovery. The Institute for Supply Management's (ISM) Composite Index for the service & construction sectors rose in March to 55.4 from 53.0 in February. It was the third consecutive [...]

U.S. ISM Nonmanufacturing Index Continues To Strengthen

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402f.jpg" style="width: 353px; height: 265px;" align="right"> Making up
sales which earlier had suffered from "special" factors, <b>U.S.
unit sales of&nbsp; light vehicles</b> during March jumped to
11.78M units (SAAR) from 10.38M in February. The latest was the highest
level since last August when aggressive sales promotions lifted sales.
March sales fell slightly short of Consensus expectations for 12.0M.
(Seasonal adjustment of these figures is provided by the U.S. Bureau of
Economic Analysis).</p><p>Sales of <b>domestically&nbsp; produced
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402g.jpg" style="width: 353px; height: 265px;" align="right">
vehicles</b> jumped 14.0% last month to 8.79M units (28.5% y/y)
from 7.71M in February. Sales of fuel efficient cars rose 11.8% for the
month (28.8% y/y) while light truck sales also posted a solid 16.0% m/m
gain (28.3% y/y). <b>Imported light vehicle</b> sales
recovered 12.0% (3.7% y/y) after a sharp February decline, due in part
to the recall of some Toyota models. With a 5.9% gain, sales of
imported autos recovered all of the February loss while light truck
sales were stronger with a m/m gain of 24.9%, though just 1.7% y/y.</p><p>Overall,<b> import's share </b>of the U.S.
light vehicle market during February fell to 25.4%. The share has been
declining erratically from its high of 30.5% in February '09 and from
27.6% during all of last year. (Imported vehicles are those produced
outside the United States.) Imports' share of the U.S. car market fell
m/m to 31.8% and that was below 34.8% during 2009. Imports' share of
the light truck market improved to 18.7% but remained below the 19.6%
last year.</p><p>The U.S. vehicle sales figures can be
found in Haver's<b> USECON </b>database.&nbsp;</p>
<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/@ED09/@ED0901/@ED0901.HTM%22" style="color: rgb(0, 0, 0);"><b>Light Vehicle Sales
(SAAR, Mil. Units)</b></a></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>March Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>11.78</td>
<td>10.38</td>
<td>10.78</td>
<td>21.2%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>6.04</td>
<td>5.49</td>
<td>5.70</td>
<td>20.1</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.12</td>
<td>3.68</td>
<td>3.78</td>
<td>28.8</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.92</td>
<td>1.81</td>
<td>1.92</td>
<td>4.8</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.74</td>
<td>4.88</td>
<td>5.08</td>
<td>22.4</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.67</td>
<td>4.03</td>
<td>4.11</td>
<td>28.3</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.07</td>
<td>0.86</td>
<td>0.97</td>
<td>1.7</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
</span></body></html>

Making up sales which earlier had suffered from "special" factors, U.S. unit sales of light vehicles during March jumped to 11.78M units (SAAR) from 10.38M in February. The latest was the highest level since last August when [...]

U.S. Vehicle Sales Recover

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Policymakers around the world have used the auto sector as a
lever to try and pry growth out of their respective economies. It may
seem strange that such a &#8216;big ticket item&#8217; would be uses so
universally, but that is partly the result of the type of crisis
governments and central banks have been fighting. Few buy cars without
bank financing. And bank financing had retracted sharply in the crisis.</p>
<p>Auto incentives ladened with tax breaks helped to get the
sector moving ahead. Now the incentives have been removed and sales are
falling back to economically supportable levels. In the e-Zone we can
see that while car sales are falling back retail sales have been
steadily cutting their losses. It&#8217;s not great but its progress.</p>
<p>France and Italy are the early auto sales (actually
registrations are recorded in Europe) reporters. They each show that
sales have advanced in March more than compensating for the sales drop
in February. Although the drop off in overall auto sales seems severe,
it is only sales getting back to normal after some very successful
incentives. The reduction in the rate of decline in retail sales
underscores that there is some progress on the part of the
Euro-consumer. France and Italy are showing that m/m sales can still
rise in this environment in which has the growth rate of Yr/Yr sales
dropping so sharply.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col"> <b>Euro-Area
Car Registrations</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo %</td>
<td colspan="2">3-Mo Trend From</td>
<td colspan="2">6-Mo Trend From</td>
<td colspan="2">12-Mo Trend From</td>
</tr>
<tr class="odd">
<td class="firstcol">All Seas Adj</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
France(&amp;WDA)</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>-17.0%</td>
<td>-50.8%</td>
<td>-46.2%</td>
<td>6.2%</td>
<td>23.6%</td>
<td>12.7%</td>
<td>18.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Italy</td>
<td>5.1%</td>
<td>-2.9%</td>
<td>-2.5%</td>
<td>-2.0%</td>
<td>-19.2%</td>
<td>11.6%</td>
<td>7.1%</td>
<td>12.2%</td>
<td>21.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">base Month of Calc</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>Mar-09</td>
<td>Feb-09</td>
</tr>
</tbody>
</table>
</body></html>

Policymakers around the world have used the auto sector as a lever to try and pry growth out of their respective economies. It may seem strange that such a ‘big ticket item’ would be uses so universally, but that is partly the result [...]

Auto Sales In The Zone Come Back To Earth

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402b.jpg" style="width: 312px; height: 265px;"></p>
<p>The Bureau of Labor Statistics reported that, all-in-all,
labor market conditions firmed somewhat more-than-expected last month.
From the household survey, the unemployment rate held steady for the
third month at an expected 9.7%, down from the October high of 10.1%.
That stability owed to improved hiring. Employment rose 264,000 (-1.4%
y/y) for the third consecutive monthly gain. These increases follow
monthly declines of as much as 967,000 during the recession. In
addition, improved hiring is prompting an expansion of the labor force.
The 398,000 gain (-0.2% y/y) was the largest of three consecutive
monthly increases. Throughout 2009 the labor force contracted slightly.
The gain reflects a rise in the labor force participation rate to
64.9%, its third month of increase following steady declines last year.</p>
<p>The establishment survey also painted a picture of an improved
job market. To start, payrolls expanded 162,000. Though the gain was
slightly less-than-expected, the increase followed a lessened decline
of 14,000 in February. Also, a slight decline in January payrolls was
revised to a small increase. The real surprise, however, was that
Census workers contributed just 48,000 to last month's payroll gain and
that raised government hiring by 39,000 (-0.3% y/y). Therefore,
private-sector jobs expanded 123,000 (-2.1% y/y), the biggest of four
gains in the last five months.</p>
<p>The payroll gain reflected an 82,000 increase in
private-services. It was the fourth increase in the last five months
after severe weather dampened February hiring. Temporary jobs rose
40,200 (8.9% y/y) for the sixth consecutive monthly increase.
Construction jobs benefitted from the weather as well with a 15,000
increase, though it was the first gain since early-2007. Factory sector
employment also firmed and the 17,000 rise was the third consecutive
monthly increase.</p>
<p>The total workweek bounced back after the storm and earlier
numbers were upwardly-revised. The gain to 34.0 hours pulled the
workweek to its longest in twelve months. Combined with the gain in
employment, aggregate hours worked rose 0.7% and by 0.4% last quarter.</p>
<p>Average hourly earnings fell 0.1% and reversed the February
increase. It was the first monthly decline since 2003 and lowered the
y/y gain to 2.1%, its weakest since early-2004.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402d.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Employment:
000s</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>162</td>
<td>-14</td>
<td>14</td>
<td>-1.8%</td>
<td>-4.3%</td>
<td>-0.6%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-36</td>
<td>-26</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Manufacturing</td>
<td>17</td>
<td>6</td>
<td>22</td>
<td>-5.2%</td>
<td>-11.3%</td>
<td>-3.4%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Construction</td>
<td>15</td>
<td>-59</td>
<td>-60</td>
<td>-11.1%</td>
<td>-15.7%</td>
<td>-6.1%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Private
Service Producing</td>
<td>82</td>
<td>55</td>
<td>46</td>
<td>-1.0%</td>
<td>-3.4%</td>
<td>-0.2%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Government</td>
<td>39</td>
<td>-22</td>
<td>-2</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>1.3%</td>
<td>1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>34.0</td>
<td>33.9</td>
<td>34.0</td>
<td>34.0(March '09)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>2.1%</td>
<td>3.0%</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>9.7%</td>
<td>9.7%</td>
<td>9.7%</td>
<td>8.6%(March '09)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

The Bureau of Labor Statistics reported that, all-in-all, labor market conditions firmed somewhat more-than-expected last month. From the household survey, the unemployment rate held steady for the third month at an expected 9.7%, [...]

U.S. Job Market Firms; Jobless Rate Is Steady And Payrolls Rise

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402b.jpg" style="width: 312px; height: 265px;"></p>
<p>The Bureau of Labor Statistics reported that, all-in-all,
labor market conditions firmed somewhat more-than-expected last month.
From the household survey, the unemployment rate held steady for the
third month at an expected 9.7%, down from the October high of 10.1%.
That stability owed to improved hiring. Employment rose 264,000 (-1.4%
y/y) for the third consecutive monthly gain. These increases follow
monthly declines of as much as 967,000 during the recession. In
addition, improved hiring is prompting an expansion of the labor force.
The 398,000 gain (-0.2% y/y) was the largest of three consecutive
monthly increases. Throughout 2009 the labor force contracted slightly.
The gain reflects a rise in the labor force participation rate to
64.9%, its third month of increase following steady declines last year.</p>
<p>The establishment survey also painted a picture of an improved
job market. To start, payrolls expanded 162,000. Though the gain was
slightly less-than-expected, the increase followed a lessened decline
of 14,000 in February. Also, a slight decline in January payrolls was
revised to a small increase. The real surprise, however, was that
Census workers contributed just 48,000 to last month's payroll gain and
that raised government hiring by 39,000 (-0.3% y/y). Therefore,
private-sector jobs expanded 123,000 (-2.1% y/y), the biggest of four
gains in the last five months.</p>
<p>The payroll gain reflected an 82,000 increase in
private-services. It was the fourth increase in the last five months
after severe weather dampened February hiring. Temporary jobs rose
40,200 (8.9% y/y) for the sixth consecutive monthly increase.
Construction jobs benefitted from the weather as well with a 15,000
increase, though it was the first gain since early-2007. Factory sector
employment also firmed and the 17,000 rise was the third consecutive
monthly increase.</p>
<p>The total workweek bounced back after the storm and earlier
numbers were upwardly-revised. The gain to 34.0 hours pulled the
workweek to its longest in twelve months. Combined with the gain in
employment, aggregate hours worked rose 0.7% and by 0.4% last quarter.</p>
<p>Average hourly earnings fell 0.1% and reversed the February
increase. It was the first monthly decline since 2003 and lowered the
y/y gain to 2.1%, its weakest since early-2004.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402d.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Employment:
000s</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>162</td>
<td>-14</td>
<td>14</td>
<td>-1.8%</td>
<td>-4.3%</td>
<td>-0.6%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-36</td>
<td>-26</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Manufacturing</td>
<td>17</td>
<td>6</td>
<td>22</td>
<td>-5.2%</td>
<td>-11.3%</td>
<td>-3.4%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Construction</td>
<td>15</td>
<td>-59</td>
<td>-60</td>
<td>-11.1%</td>
<td>-15.7%</td>
<td>-6.1%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Private
Service Producing</td>
<td>82</td>
<td>55</td>
<td>46</td>
<td>-1.0%</td>
<td>-3.4%</td>
<td>-0.2%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Government</td>
<td>39</td>
<td>-22</td>
<td>-2</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>1.3%</td>
<td>1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>34.0</td>
<td>33.9</td>
<td>34.0</td>
<td>34.0(March '09)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>2.1%</td>
<td>3.0%</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>9.7%</td>
<td>9.7%</td>
<td>9.7%</td>
<td>8.6%(March '09)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
<span id="articletitle">Auto Sales In The Zone Come Back
To Earth</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> April 2, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Policymakers around the world have used the auto sector as a
lever to try and pry growth out of their respective economies. It may
seem strange that such a &#8216;big ticket item&#8217; would be uses so
universally, but that is partly the result of the type of crisis
governments and central banks have been fighting. Few buy cars without
bank financing. And bank financing had retracted sharply in the crisis.</p>
<p>Auto incentives ladened with tax breaks helped to get the
sector moving ahead. Now the incentives have been removed and sales are
falling back to economically supportable levels. In the e-Zone we can
see that while car sales are falling back retail sales have been
steadily cutting their losses. It&#8217;s not great but its progress.</p>
<p>France and Italy are the early auto sales (actually
registrations are recorded in Europe) reporters. They each show that
sales have advanced in March more than compensating for the sales drop
in February. Although the drop off in overall auto sales seems severe,
it is only sales getting back to normal after some very successful
incentives. The reduction in the rate of decline in retail sales
underscores that there is some progress on the part of the
Euro-consumer. France and Italy are showing that m/m sales can still
rise in this environment in which has the growth rate of Yr/Yr sales
dropping so sharply.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col"> <b>Euro-Area
Car Registrations</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo %</td>
<td colspan="2">3-Mo Trend From</td>
<td colspan="2">6-Mo Trend From</td>
<td colspan="2">12-Mo Trend From</td>
</tr>
<tr class="odd">
<td class="firstcol">All Seas Adj</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
France(&amp;WDA)</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>-17.0%</td>
<td>-50.8%</td>
<td>-46.2%</td>
<td>6.2%</td>
<td>23.6%</td>
<td>12.7%</td>
<td>18.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Italy</td>
<td>5.1%</td>
<td>-2.9%</td>
<td>-2.5%</td>
<td>-2.0%</td>
<td>-19.2%</td>
<td>11.6%</td>
<td>7.1%</td>
<td>12.2%</td>
<td>21.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">base Month of Calc</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>Mar-09</td>
<td>Feb-09</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Vehicle Sales Recover</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> April 2, 2010</span>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402f.jpg" style="width: 353px; height: 265px;" align="right">
Making up
sales which earlier had suffered from "special" factors, <b>U.S.
unit sales of&nbsp; light vehicles</b> during March jumped to
11.78M units (SAAR) from 10.38M in February. The latest was the highest
level since last August when aggressive sales promotions lifted sales.
March sales fell slightly short of Consensus expectations for 12.0M.
(Seasonal adjustment of these figures is provided by the U.S. Bureau of
Economic Analysis).</p>
<p>Sales of <b>domestically&nbsp; produced
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402g.jpg" style="width: 353px; height: 265px;" align="right">vehicles</b>
jumped 14.0% last month to 8.79M units (28.5% y/y)
from 7.71M in February. Sales of fuel efficient cars rose 11.8% for the
month (28.8% y/y) while light truck sales also posted a solid 16.0% m/m
gain (28.3% y/y). <b>Imported light vehicle</b> sales
recovered 12.0% (3.7% y/y) after a sharp February decline, due in part
to the recall of some Toyota models. With a 5.9% gain, sales of
imported autos recovered all of the February loss while light truck
sales were stronger with a m/m gain of 24.9%, though just 1.7% y/y.</p>
<p>Overall,<b> import's share </b>of the U.S.
light vehicle market during February fell to 25.4%. The share has been
declining erratically from its high of 30.5% in February '09 and from
27.6% during all of last year. (Imported vehicles are those produced
outside the United States.) Imports' share of the U.S. car market fell
m/m to 31.8% and that was below 34.8% during 2009. Imports' share of
the light truck market improved to 18.7% but remained below the 19.6%
last year.</p>
<p>The U.S. vehicle sales figures can be
found in Haver's<b> USECON </b>database.&nbsp;</p>
<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/@ED09/@ED0901/@ED0901.HTM%22" style="color: rgb(0, 0, 0);"><b>Light Vehicle Sales
(SAAR, Mil. Units)</b></a></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>March Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>11.78</td>
<td>10.38</td>
<td>10.78</td>
<td>21.2%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>6.04</td>
<td>5.49</td>
<td>5.70</td>
<td>20.1</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.12</td>
<td>3.68</td>
<td>3.78</td>
<td>28.8</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.92</td>
<td>1.81</td>
<td>1.92</td>
<td>4.8</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.74</td>
<td>4.88</td>
<td>5.08</td>
<td>22.4</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.67</td>
<td>4.03</td>
<td>4.11</td>
<td>28.3</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.07</td>
<td>0.86</td>
<td>0.97</td>
<td>1.7</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
</span>
</body></html>

U.S. Job Market Firms; JoblessRate Is Steady And Payrolls Rise

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

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

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


Privacy Policy

Disclaimer

Contact us

Service Health

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

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Tian Yong Woon

In this week’s Letter, we cover the latest developments and implications of the Middle East conflict for Asia, while also making space for other important themes, including artificial intelligence (AI). The Middle East conflict remains in a no deal state coming out of the weekend, though some early Monday optimism emerged in Asian markets following Iran’s reported offer to reopen the Strait of Hormuz (chart 1). Nonetheless, as the Strait closure drags on, so too do the fiscal costs of domestic fossil fuel subsidies across Asia, which have been shown to move closely with crude oil prices (chart 2). While such measures offer direct relief by cushioning household energy costs, they remain difficult to sustain over the long haul.

Over the week, we also saw a further fraying in regional monetary policy trends, with the Philippines hiking its policy rate for the first time in about two years amid inflation concerns, while Indonesia stood pat on rates (chart 3). Investor attention is likely to remain fixed on monetary policy this week, with the Bank of Japan due to decide on policy. Expectations for an April hike have faded amid the persistent Middle East conflict, though yen weakness continues to present a source of concern (chart 4). The week also brings China’s latest PMI readings (chart 5), adding to the recent run of hard data accompanying the Q1 GDP release.

Beyond the Middle East conflict, the evolution of AI continues to demand close attention. Before geopolitical tensions took centre stage, AI was the dominant market narrative — and that enthusiasm has hardly faded. If anything, recent developments suggest the story is broadening: use cases are expanding, scalability is improving, and access is widening beyond large corporates to the mass market — increasingly spilling into the realm of physical AI. It may well be this persistent wave of optimism that is helping to underpin equity valuations, even as the geopolitical backdrop darkens (chart 6).

**The Middle East conflict**
About two months in, we remain stuck in the limbo of the US-Iran conflict, which has left the Strait of Hormuz largely closed and much of the world starved of the critical oil flows needed to power the global economy. The back and forth between the US and Iran has persisted in recent weeks, with both sides again failing to reach a peace deal over the weekend, though Monday’s news of Iran offering to reopen the Strait has revived some hope in markets. In truth, commodity and market valuations do not hinge so much on a peace deal itself, but rather on the resumption of oil flows through the Strait, something that could materialise even in the absence of a formal deal, though any agreement that includes and credibly delivers such a reopening would likely be warmly received by markets. Until then, market gyrations are likely to persist, with prices fluctuating in response to each new snippet of news. And until then, the world will continue both to be starved of, while gradually adapting to, the drip feed of oil flows emerging from the Strait.

260427T1.jpg

**The fiscal costs of the Middle East conflict**
As the Middle East conflict drags on, so too does the strain on fiscal resources across parts of Asia, as the costs of energy-related subsidy programmes continue to mount. While such programmes have an immediate, direct, and tangible impact in shielding households from surging energy costs, they are far from sustainable, particularly if oil prices remain well above targeted levels or stay elevated for an extended period. As chart 2 illustrates, the costs of these explicit subsidy programmes tend to rise closely with crude oil prices, as seen in India and Indonesia. Other measures adopted elsewhere, such as drawing down oil reserves, may be less fiscally costly, but are similarly difficult to sustain indefinitely. In both respects, the clock is ticking, and the world continues to hold its breath as the conflict drags on.

260427T2.jpg

**The latest central bank responses to the conflict**
Over the past week, Asia saw two central bank decisions. The Philippines’ (BSP) opted to deliver its first rate hike in about two years, while Indonesia’s (BI) chose to stand pat on policy rates and instead committed to stepped up FX intervention (chart 3). This latest round of decisions points to a further fraying of what had been a broad regional monetary policy consensus, namely that central banks would delay additional easing while maintaining a high bar for outright tightening. Domestic considerations, however, remain paramount. In the Philippines’ case, the central bank has moved to rein in inflation, which is already showing notable signs of price pass through stemming from disruptions linked to the Strait of Hormuz. That said, BSP is not the first in the region to buck the reluctance to tighten. Singapore’s central bank had already tightened policy in mid-April, albeit through its own distinct framework, given its use of the exchange rate rather than policy rates as the primary channel for monetary policy.

260427T3.jpg

**The week ahead**
Looking to the week ahead, a major central bank decision looms in Japan. Market expectations for the Bank of Japan to deliver a rate hike at its April meeting have ebbed amid the persistence of the Middle East conflict, to which Japan remains particularly vulnerable given its reliance on oil imports flowing through the Strait of Hormuz. At the same time, inflation in Japan has yet to become a major concern, with recent readings having picked up but not yet entering troubling territory. One potential source of concern, however, lies with the Japanese yen, which has remained on a weakening trend since early last year (chart 4). That depreciation has been one of the key arguments underpinning calls for further rate hikes.

260427T4.jpg

The week also brings China’s latest PMIs into focus. March saw a divergence between China’s official PMI readings, which improved, and the unofficial readings from RatingDog, which instead pulled back. Nonetheless, both official and unofficial gauges remained in expansionary territory (chart 5), with investors now watching closely to see whether that resilience can be sustained amid ongoing stresses from the Middle East, or whether offsetting drivers can continue to keep Chinese business sentiment and prospects buoyant.

260427T5.jpg

**Beyond the strait**
Moving beyond the Middle East conflict, a whole host of developments continue to unfold globally, many of which have in fact helped offset some of the pessimism wrought by the Strait’s chokehold. One such development is artificial intelligence (AI), which had dominated headlines before the outbreak of the conflict and continues to advance at breakneck pace. AI capabilities are still rapidly evolving, while practical applications, such as physical AI embodied in humanoid robots, are beginning to show broader and stronger use cases. Production of such robots is also becoming increasingly scalable and within reach not just for industrial complexes and healthcare, but for the mass market as well. It is perhaps growing optimism around these prospects that has helped keep equity valuations buoyant, even in the face of the festering conflict in the Middle East. Moreover, while concerns over AI-driven job displacement persist, new opportunities are emerging as well, particularly for AI adopters, with a growing share of job postings in Western economies increasingly referencing AI-related skills, as shown in chart 6.

260427T6.jpg

Asia

Economic Letter from Asia: Not Just About the Strait

260424E.jpg

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.

260424.jpg

Germany

German Ifo Plunges Everywhere

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.

260423Z1.jpg

**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.

260423Z2.jpg

**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.

260423Z3.jpg

**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.

260423Z4.jpg

**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.

260423Z5.jpg

**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.

260423Z6.jpg

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.

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/44A12ktUaoJGHZG7pEVcul?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Risks Build, Markets Shrug

Sandy Batten

260423F8.jpg

260423G8.jpg

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

260423A1.jpg

260423B1.jpg

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.

260423C1.jpg

260423D1.jpg

- 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%.


Economy in Brief: 2010

Jump to:

Money Supply Growth Begins To Shift – Is That All?

U.S. Pending Home Sales Unexpectedly Recover

U.S. ISM Nonmanufacturing Index Continues To Strengthen

U.S. ISM Nonmanufacturing Index Continues To Strengthen

U.S. Vehicle Sales Recover

Auto Sales In The Zone Come Back To Earth

U.S. Job Market Firms; Jobless Rate Is Steady And Payrolls Rise

U.S. Job Market Firms; JoblessRate Is Steady And Payrolls Rise