Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050516a.jpg" width="353">
The Empire State Index of General Business Conditions in New York&#39;s manufacturing industries went negative in May for the first month since April 2003. The decline to -11.11 followed a year of weakening versus the peak in February 2004 and April&#39;s level was revised down.
The new orders component dropped further into negative territory but the shipments index was slightly positive. The employment index fell to its lowest since September 2003 and the barely positive reading indicated little if any job growth. Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question; it is not a weighted combination of the components.
The prices paid index slipped further to the lowest level since last February.
Expectations for business conditions in six months fell further and indicated the most pessimism since 2001. Expectations for future capital spending fell hard for the third month in the last five and the average level this year is below 2004.
The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.
For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click <a href="http://www.newyorkfed.org/research/regional_economy/empiresurvey_overview.html">here</a>.

<table border="0" cellspacing="0" width="100%">

</table>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S511/@S511.HTM">Empire State Manufacturing Survey</a> </th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">May &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">General Business Conditions (diffusion index)</td>
<td>-11.11</td>
<td>2.03</td>
<td>31.01</td>
<td>28.76</td>
<td>16.17</td>
<td>7.19</td>
</tr>
</tbody>
</table>
</body>
</html>

The Empire State Index of General Business Conditions in New York's manufacturing industries went negative in May for the first month since April 2003. The decline to -11.11 followed a year of weakening versus the peak in February [...]

Empire State Index Negative

Carol Stone, CBE

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513e.jpg" width="353">
A recurrent theme of our reports over the last couple of months has been the continuation of low consumer price inflation despite high energy prices. This phenomenon has persisted through April in several European countries that reported their latest CPI data today.
This is especially evident in France, where the total CPI has even slowed somewhat in the face of the recent surge in energy costs. The first four months of 2005 averaged year-on-year inflation of 1.8%, compared with a five-year average of 2.0%. Food is cheaper, clothing prices are little changed and manufactured goods have declined outright. Services prices have been rising 2.7%, but this is less than their 3%+ pace in 2002.
In Finland and Sweden, which we mentioned here a month ago, the 12-month change in total CPI ticked up by 0.1% and 0.2%, respectively from their March rates. But that still leaves Finland at 1.1% and Sweden at a mere 0.3%. In Spain, total inflation was 3.5% year-on-year in April, with some signs of upward creep. But the pace excluding energy has been steady at 2.9% for the last two years.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513f.jpg" width="353">
Perhaps we are simply short-sighted in these comments; perhaps it simply takes longer than a year for the &quot;second-round&quot; effects of sustained energy prices to filter through to other items. Or perhaps, as we noted elsewhere recently, the second-round effects will appear more as restraints to demand growth than spurs to higher inflation.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/G10.HTM">Yr/Yr % Changes</a> Not Seasonally Adjusted</th>
<th scope="col">Apr 2005</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>1.8</td>
<td>1.9</td>
<td>1.6</td>
<td>2.1</td>
<td>1.2</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Finland</td>
<td>1.1</td>
<td>1.0</td>
<td>0.2</td>
<td>0.4</td>
<td>0.6</td>
<td>1.7</td>
</tr>
<tr>
<td class="firstcol">Sweden</td>
<td>0.3</td>
<td>0.1</td>
<td>0.7</td>
<td>0.3</td>
<td>1.3</td>
<td>2.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>3.5</td>
<td>3.4</td>
<td>3.3</td>
<td>3.2</td>
<td>2.6</td>
<td>4.5</td>
</tr>
<tr>
<td class="firstcol">US</td>
<td>--</td>
<td>3.1</td>
<td>3.0</td>
<td>3.3</td>
<td>1.9</td>
<td>2.4</td>
</tr>
</tbody>
</table>
</body>
</html>

A recurrent theme of our reports over the last couple of months has been the continuation of low consumer price inflation despite high energy prices. This phenomenon has persisted through April in several European countries that [...]

European Consumer Inflation Continues Moderate in the Face of Rising Energy

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513d.jpg" width="353">
The University of Michigan&#39;s reading of consumer sentiment in May fell 2.7% from April to 85.3. The decline contrasted to Consensus expectations for stability at 88.0.
Sentiment has fallen in each of the last five months and is down 17.8% from the January &#39;04 peak. During the last ten years there has been a 75% (inverse) correlation between the level of consumer sentiment and the y/y change in real PCE, although the correlation has fallen in recent years.
Consumer expectations were depressed mostly by a sense that unemployment would rise which generated expectations that real family income would decline, helped lower by an expected acceleration in price inflation.
The reading of current economic conditions fell 1.1% for the fourth consecutive monthly drop and reflected a sharp decline in the reading of personal finances to the lowest level since December 2003.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>85.3</td>
<td>87.7</td>
<td>-5.4%</td>
<td>95.2</td>
<td>87.6</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>103.3</td>
<td>104.4</td>
<td>-0.3%</td>
<td>105.6</td>
<td>97.2</td>
<td>97.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer Expectations</td>
<td>73.7</td>
<td>77.0</td>
<td>-9.7%</td>
<td>88.5</td>
<td>81.4</td>
<td>84.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The University of Michigan's reading of consumer sentiment in May fell 2.7% from April to 85.3. The decline contrasted to Consensus expectations for stability at 88.0. Sentiment has fallen in each of the last five months and is down [...]

U.S. Consumer Sentiment Depressed

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513a.jpg" width="353">
Import prices surged 0.8% last month following an upwardly revised 2.0% spike in March. Consensus expectations had been for a moderate 0.3% increase.
Petroleum prices jumped another 3.1% m/m and the March gain was revised up. While crude oil moderated and rose just 1.0%, a 9.9% jump in &quot;other&quot; petroleum product prices and a 12.4% gain gas prices lifted the fuel total. So far in May the price of Brent Crude oil has traded roughly 5% below the April average of $52.22 per barrel and yesterday touched $46.63.
Import prices other than petroleum rose 0.4% last month and again mostly reflected strength in prices of foods &amp; beverages (0.4% m/m, 8.5% y/y) and in prices for industrial supplies &amp; materials less petroleum (2.1% m/m, 11.5% y/y).
During the last ten years there has been a 66% (negative) correlation between the nominal trade-weighted exchange value of the US dollar vs. major currencies and the y/y change in non oil import prices. The correlation is a lower 47% against a broader basket of currencies and a lower 57% against the real value of the dollar. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513b.jpg" width="353">
Prices for nonauto consumer goods fell 0.1% (+1.1% y/y) for the second down month and capital goods prices fell 0.1% (-0.5% y/y) for the third down month. Imported computer prices fell 1.1% (-7.1% y/y) although excluding computers capital goods prices rose a firm 0.3% (2.7% y/y).
Export prices again rose 0.6% on the strength of a 1.9% (14.0% y/y) surge in industrial materials.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA)</a></th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>0.8%</td>
<td>2.0%</td>
<td>8.1%</td>
<td>5.6%</td>
<td>2.9%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>3.1%</td>
<td>12.3%</td>
<td>43.1%</td>
<td>30.5%</td>
<td>21.0%</td>
<td>3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>0.4%</td>
<td>0.3%</td>
<td>3.0%</td>
<td>2.6%</td>
<td>1.1%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>0.6%</td>
<td>0.6%</td>
<td>3.1%</td>
<td>3.9%</td>
<td>1.6%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
</body>
</html>

Import prices surged 0.8% last month following an upwardly revised 2.0% spike in March. Consensus expectations had been for a moderate 0.3% increase. Petroleum prices jumped another 3.1% m/m and the March gain was revised up. While [...]

Import Prices Surged

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513c.jpg" width="353">
Total business inventories rose 0.4% in March and the y/y rate of inventory accumulation continued strong at 7.9%. The ratio of inventories-to-sales fell slightly, however, and returned to the record low average of last year.
Retail inventories rose 0.3% in March and also gained 0.3% excluding autos. Inventories of furniture &amp; electronics increased 0.6% (6.2% y/y) following two months of decline and general merchandise doubled the prior month&#39;s increase with a 1.0% surge (6.6% y/y). Apparel inventories rose 0.5% (4.3% y/y).
Factory sector inventories grew 0.6% for the second month and the 8.9% increase versus last year remained the strongest since 1989.
Wholesale inventory accumulation moderated to 0.4%. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.
Overall business sales recovered 0.7% (6.7% y/y) after the 0.5% decline in February.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED06/@ED0601/@ED0601.HTM">Business Inventories</a></th>
<th scope="col">March</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.4%</td>
<td>0.5%</td>
<td>7.9%</td>
<td>7.7%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.3%</td>
<td>0.4%</td>
<td>4.8%</td>
<td>5.7%</td>
<td>3.9%</td>
<td>5.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>0.3%</td>
<td>0.5%</td>
<td>6.5%</td>
<td>5.9%</td>
<td>2.0%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.4%</td>
<td>0.6%</td>
<td>10.8%</td>
<td>10.8%</td>
<td>2.0%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.6%</td>
<td>0.6%</td>
<td>8.9%</td>
<td>7.5%</td>
<td>-1.3%</td>
<td>-1.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

Total business inventories rose 0.4% in March and the y/y rate of inventory accumulation continued strong at 7.9%. The ratio of inventories-to-sales fell slightly, however, and returned to the record low average of last year. Retail [...]

U.S. Business Inventories Rose

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513c.jpg" width="353">
Total business inventories rose 0.4% in March and the y/y rate of inventory accumulation continued strong at 7.9%. The ratio of inventories-to-sales fell slightly, however, and returned to the record low average of last year.
Retail inventories rose 0.3% in March and also gained 0.3% excluding autos. Inventories of furniture &amp; electronics increased 0.6% (6.2% y/y) following two months of decline and general merchandise doubled the prior month&#39;s increase with a 1.0% surge (6.6% y/y). Apparel inventories rose 0.5% (4.3% y/y).
Factory sector inventories grew 0.6% for the second month and the 8.9% increase versus last year remained the strongest since 1989.
Wholesale inventory accumulation moderated to 0.4%. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.
Overall business sales recovered 0.7% (6.7% y/y) after the 0.5% decline in February.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED06/@ED0601/@ED0601.HTM">Business Inventories</a></th>
<th scope="col">March</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.4%</td>
<td>0.5%</td>
<td>7.9%</td>
<td>7.7%</td>
<td>1.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail</td>
<td>0.3%</td>
<td>0.4%</td>
<td>4.8%</td>
<td>5.7%</td>
<td>3.9%</td>
<td>5.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Retail excl. Autos</td>
<td>0.3%</td>
<td>0.5%</td>
<td>6.5%</td>
<td>5.9%</td>
<td>2.0%</td>
<td>2.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Wholesale</td>
<td>0.4%</td>
<td>0.6%</td>
<td>10.8%</td>
<td>10.8%</td>
<td>2.0%</td>
<td>1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.6%</td>
<td>0.6%</td>
<td>8.9%</td>
<td>7.5%</td>
<td>-1.3%</td>
<td>-1.8%</td>
</tr>
</tbody>
</table>
Import Prices Surged 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 13, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513a.jpg" width="353">
Import prices surged 0.8% last month following an upwardly revised 2.0% spike in March. Consensus expectations had been for a moderate 0.3% increase.
Petroleum prices jumped another 3.1% m/m and the March gain was revised up. While crude oil moderated and rose just 1.0%, a 9.9% jump in &quot;other&quot; petroleum product prices and a 12.4% gain gas prices lifted the fuel total. So far in May the price of Brent Crude oil has traded roughly 5% below the April average of $52.22 per barrel and yesterday touched $46.63.
Import prices other than petroleum rose 0.4% last month and again mostly reflected strength in prices of foods &amp; beverages (0.4% m/m, 8.5% y/y) and in prices for industrial supplies &amp; materials less petroleum (2.1% m/m, 11.5% y/y).
During the last ten years there has been a 66% (negative) correlation between the nominal trade-weighted exchange value of the US dollar vs. major currencies and the y/y change in non oil import prices. The correlation is a lower 47% against a broader basket of currencies and a lower 57% against the real value of the dollar. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513b.jpg" width="353">
Prices for nonauto consumer goods fell 0.1% (+1.1% y/y) for the second down month and capital goods prices fell 0.1% (-0.5% y/y) for the third down month. Imported computer prices fell 1.1% (-7.1% y/y) although excluding computers capital goods prices rose a firm 0.3% (2.7% y/y).
Export prices again rose 0.6% on the strength of a 1.9% (14.0% y/y) surge in industrial materials.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E807/@E807.HTM">Import/Export Prices (NSA)</a></th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Import - All Commodities</td>
<td>0.8%</td>
<td>2.0%</td>
<td>8.1%</td>
<td>5.6%</td>
<td>2.9%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>3.1%</td>
<td>12.3%</td>
<td>43.1%</td>
<td>30.5%</td>
<td>21.0%</td>
<td>3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-petroleum</td>
<td>0.4%</td>
<td>0.3%</td>
<td>3.0%</td>
<td>2.6%</td>
<td>1.1%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">Export - All Commodities</td>
<td>0.6%</td>
<td>0.6%</td>
<td>3.1%</td>
<td>3.9%</td>
<td>1.6%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
U.S. Consumer Sentiment Depressed 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 13, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513d.jpg" width="353">
The University of Michigan&#39;s reading of consumer sentiment in May fell 2.7% from April to 85.3. The decline contrasted to Consensus expectations for stability at 88.0.
Sentiment has fallen in each of the last five months and is down 17.8% from the January &#39;04 peak. During the last ten years there has been a 75% (inverse) correlation between the level of consumer sentiment and the y/y change in real PCE, although the correlation has fallen in recent years.
Consumer expectations were depressed mostly by a sense that unemployment would rise which generated expectations that real family income would decline, helped lower by an expected acceleration in price inflation.
The reading of current economic conditions fell 1.1% for the fourth consecutive monthly drop and reflected a sharp decline in the reading of personal finances to the lowest level since December 2003.
The University of Michigan survey is not seasonally adjusted.The mid-month survey is based on telephone interviews with 250 households nationwide on personal finances and business and buying conditions. The survey is expanded to a total of 500 interviews at month end.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>85.3</td>
<td>87.7</td>
<td>-5.4%</td>
<td>95.2</td>
<td>87.6</td>
<td>89.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current Conditions</td>
<td>103.3</td>
<td>104.4</td>
<td>-0.3%</td>
<td>105.6</td>
<td>97.2</td>
<td>97.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Consumer Expectations</td>
<td>73.7</td>
<td>77.0</td>
<td>-9.7%</td>
<td>88.5</td>
<td>81.4</td>
<td>84.6</td>
</tr>
</tbody>
</table>
European Consumer Inflation Continues Moderate in the Face of Rising Energy 
by <a href="/comment/Stone.html">Carol Stone</a> May 13, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513e.jpg" width="353">
A recurrent theme of our reports over the last couple of months has been the continuation of low consumer price inflation despite high energy prices. This phenomenon has persisted through April in several European countries that reported their latest CPI data today.
This is especially evident in France, where the total CPI has even slowed somewhat in the face of the recent surge in energy costs. The first four months of 2005 averaged year-on-year inflation of 1.8%, compared with a five-year average of 2.0%. Food is cheaper, clothing prices are little changed and manufactured goods have declined outright. Services prices have been rising 2.7%, but this is less than their 3%+ pace in 2002.
In Finland and Sweden, which we mentioned here a month ago, the 12-month change in total CPI ticked up by 0.1% and 0.2%, respectively from their March rates. But that still leaves Finland at 1.1% and Sweden at a mere 0.3%. In Spain, total inflation was 3.5% year-on-year in April, with some signs of upward creep. But the pace excluding energy has been steady at 2.9% for the last two years.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050513f.jpg" width="353">
Perhaps we are simply short-sighted in these comments; perhaps it simply takes longer than a year for the &quot;second-round&quot; effects of sustained energy prices to filter through to other items. Or perhaps, as we noted elsewhere recently, the second-round effects will appear more as restraints to demand growth than spurs to higher inflation.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/G10.HTM">Yr/Yr % Changes</a> Not Seasonally Adjusted</th>
<th scope="col">Apr 2005</th>
<th scope="col">Mar 2005</th>
<th scope="col">Feb 2005</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>1.8</td>
<td>1.9</td>
<td>1.6</td>
<td>2.1</td>
<td>1.2</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Finland</td>
<td>1.1</td>
<td>1.0</td>
<td>0.2</td>
<td>0.4</td>
<td>0.6</td>
<td>1.7</td>
</tr>
<tr>
<td class="firstcol">Sweden</td>
<td>0.3</td>
<td>0.1</td>
<td>0.7</td>
<td>0.3</td>
<td>1.3</td>
<td>2.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>3.5</td>
<td>3.4</td>
<td>3.3</td>
<td>3.2</td>
<td>2.6</td>
<td>4.5</td>
</tr>
<tr>
<td class="firstcol">US</td>
<td>--</td>
<td>3.1</td>
<td>3.0</td>
<td>3.3</td>
<td>1.9</td>
<td>2.4</td>
</tr>
</tbody>
</table>
</body>
</html>

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050512e.jpg" width="353">
The Euro-Zone had 0.5% GDP growth in Q1, according to the Eurostat &quot;Flash&quot; estimate released today. This produced a year-on-year result of 1.4%, moderately weaker than any quarter since Q4 2003. In these early &quot;Flash&quot; figures, no details are available by type of expenditure or industry, so there&#39;s no way to tell what factors contributed to the performance.
We do, however, know something about where the developments took place. Germany experienced a nice rebound, reaching 1.0% after two quarters of virtually no growth at all. Among other Euro-Zone countries, they join the UK with its 0.6% gain in boosting Europe&#39;s economy.
Elsewhere, results were not so attractive. Italy lost 0.5% and the Netherlands, 0.1%; Belgian GDP was unchanged. Both Italy and the Netherlands GDP also decreased year-on-year.
The Netherlands reported its expenditure breakdown; private consumption edged slightly lower, and investment contracted more sharply after a good gain in Q4. Net exports decreased. The only positive input came in inventories, which grew &#128;327 million compared to &#128;192 million in Q4.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050512f.jpg" width="353">
These data are mixed now by calculation methodology. As noted in the table below, &quot;real&quot; GDP for the overall Euro-Zone remains expressed in fixed-weights and 1995 prices; Italy&#39;s own data are also still on this basis. Germany, the UK and the Netherlands have all switched to annual chain-weighting, but Germany&#39;s reference year is 2000, the Netherlands, 1995 and the UK, 2001. Euro-Zone conventions call for all countries to switch to chain-linking by late 2006. There are also differences in the treatment of imputed charges for financial services, so-called &quot;FISIM&quot;. These are to be reconciled for the most part by the end of this year, with a few countries in 2006. Consumption and net exports will be affected. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/G10.HTM">GDP % Changes</a></th>
<th scope="col">1 Qtr 2005</th>
<th scope="col">4 Qtr 2004</th>
<th scope="col">Year/ Year</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Euro-Zone (fixed 1995&#128;)</td>
<td>0.5</td>
<td>0.2</td>
<td>1.4</td>
<td>1.8</td>
<td>0.5</td>
<td>0.9</td>
</tr>
<tr>
<td class="firstcol">Germany (chain 2000&#128;)</td>
<td>1.0</td>
<td>-0.1</td>
<td>0.0</td>
<td>1.6</td>
<td>0.0</td>
<td>0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy (fixed 1995 &#128;)</td>
<td>-0.5</td>
<td>-0.4</td>
<td>-0.2</td>
<td>1.0</td>
<td>0.4</td>
<td>0.4</td>
</tr>
<tr>
<td class="firstcol">Netherlands (chain 1995&#128;)</td>
<td>-0.1</td>
<td>-0.0</td>
<td>-0.3</td>
<td>1.4</td>
<td>-0.9</td>
<td>0.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The Euro-Zone had 0.5% GDP growth in Q1, according to the Eurostat "Flash" estimate released today. This produced a year-on-year result of 1.4%, moderately weaker than any quarter since Q4 2003. In these early "Flash" figures, no [...]

German Q1 Growth of 1% Boosts Euro-Zone Result to 0.5%

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050512d.jpg" width="353">
April tax revenues surged and reduced the U.S. federal government&#39;s budget deficit during the first seven months of FY 2005 by 16.5% versus the first the seven months of FY 2004.
Net receipts for the first seven months of FY05 jumped 13.7% y/y. Individual tax receipts surged 16.1% versus FY04 as April personal taxes rose 43.3% against April of last year. Corporate tax receipts continued up strongly. Reflecting the improved job market, employment taxes grew 6.0% versus 1.3% growth last year.
Growth in federal outlays remained about stable at 7.3% versus the first seven months of 2005. Growth in Medicare outlays was strong at 9.1% and social security outlays grew 5.5%. Veterans benefits grew 15.2% and defense spending slowed to 7.0% growth. Interest expense grew 11.1% with higher rates.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E10602.HTM">US Government Finance</a></th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">FY &#39;05 - YTD</th>
<th scope="col">FY2004</th>
<th scope="col">FY2003</th>
<th scope="col">FY2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$57.7B</td>
<td>$-71.2B</td>
<td>$-236.9B</td>
<td>$-412.1B</td>
<td>$-377.6B</td>
<td>$-157.8B</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Net Revenues</td>
<td>$277.6B</td>
<td>$148.7B</td>
<td>13.7%</td>
<td>5.5%</td>
<td>-3.8%</td>
<td>-6.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Net Outlays</td>
<td>$219.9B</td>
<td>$210.0B</td>
<td>7.3%</td>
<td>6.1%</td>
<td>7.4%</td>
<td>7.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

April tax revenues surged and reduced the U.S. federal government's budget deficit during the first seven months of FY 2005 by 16.5% versus the first the seven months of FY 2004. Net receipts for the first seven months of FY05 jumped [...]

Higher Tax Receipts Lowered U.S. Budget Deficit

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

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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

Kathleen Stephansen, CBE

251224A1.jpg

251224b1.jpg

Initial claims for unemployment insurance dropped 10,000 to 214,000 in the week of December 20, from 224,000 during the week of December 13. The four-week moving average of initial claims was 216,750, a decrease of 750 from the prior week’s unrevised 217,500.

Federal government employees initially filed 805 (NSA) jobless insurance claims in the week ended December 13, after filing 1091 claims in the week ended December 6.

Continuing claims for unemployment insurance rose 38,000 to 1.923 million in the week ending December 13, after rising 55,000 to 1.885 million, revised from 1.897 million in the week ending December 6. The four-week moving average was 1.894 million in the week ending December 13, down 5,250 from 1.899 million, revised from 1,902,000 in the week ending December 6. The insured unemployment rate stood at 1.3% in the week of December 13, up from 1.2% in the week of December 6.

Federal government employees’ continuing benefits claims were 12,887 (NSA) in the week ending December 6, from 14,077 (NSA) in the week of November 29. 

The insured unemployment rate varied greatly across individual states and territories. In the week ending December 6, the highest unemployment rates were in New Jersey and Washington (both 2.40%), Massachusetts and Minnesota (both 2.10%), California and Rhode Island (both 2.00%). The lowest rates were in Florida (0.30%), and Alabama, Louisiana, North Carolina (all 0.40%). Rates in other notable states include New York (1.80%), Illinois and Pennsylvania (both 1.70%), and Texas (1.10%). 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.


251224c1.jpg

251224e1.jpg

- Initial claims declined from the prior week.
- Continuing claims rose from the prior week.
- The insured unemployment rate edged up.


U.S. Initial Claims for Unemployment Insurance Dropped in Latest Week

251224a0.jpg

251224b0.jpg

Mortgage applications dropped 5.0% w/w (+49.8% y/y) in the week of December 19, after a drop of 3.8% w/w (+40.9% y/y) in the week of December 12, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a house fell 3.7% w/w (+15.9% y/y) in the latest week, the third consecutive weekly decline, following a drop of 2.8% w/w (+12.3% y/y) in the December 12 week. Applications for loan refinancing dropped 5.6% w/w (+110.1% y/y) in the December 19 week after a decline of 3.6% w/w (+86.0% y/y) in the week of December 12. 

The effective interest rate on a 30-year fixed-rate loan fell 8bps to 6.48% in the week ending December 19 from 6.56% in the week ending December 12. The rate on 15-year fixed-rate mortgages dropped 5bps to 5.86% in the latest week from 5.91% in the prior week. The 30-year Jumbo rate rose 8bps to 6.63% in the December 19 week from 6.55% in the December 12 week. The rate on a 5-year ARM jumped 20bps to 5.96% in the latest week from 5.76% in the December 12 week.

The share of applications for refinancing an existing loan edged up to 59.1% of total applications in the December19 week from 59.0% in the week ending December 12. The adjustable-rate mortgage (ARM) share of activity rose to 8.1% in the latest week from 7.2% in the December 12 week.

The average size of a mortgage loan edged down 0.1% w/w (+7.8% y/y) to $399,700 in the week ending December 19, following a rise of 1.5% w/w (6.4% y/y) to $400,000 in the December 12 week. The average size of a purchase loan rose 1.0% w/w (1.1% y/y) to $428,600 in the latest week, after rising 0.6% w/w (-0.3% y/y) to $424,200 in the prior week. The average size of a loan to refinance a mortgage declined 0.9% w/w (+24.9% y/y) to $379,700 in the December 19 week, following a rise of 2.3% w/w (19.8% y/y) to $383,300 in the week ending December 12.

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.


- Both purchase applications and refinancing loan applications fell in the latest week.
- Effective interest rate on 30-year fixed loans fell to 6.48%.
- Average loan size edged down.


U.S. Mortgage Applications Dropped in the Week of December 19

251223n8.jpg

251223c8.jpg

Real GDP grew 4.3% (SAAR) during the third quarter following a 3.8% Q2 gain, revised from 3.3% reported initially. These increases followed a minimally revised 0.6% decline in Q1. A 3.0% rise had been expected in the Action Economics Forecast Survey. Growth during the last four quarters of 2.3% compared to 2.1% y/y in Q2 and remained below its most recent high of 3.4% in Q4 2023.

After-tax corporate profits without IVA & CCA adjustment surged 7.0% (4.2% y/y) last quarter after edging 0.6% higher in Q2. Before-tax earnings with IVA & CCA rose 4.2% (9.1% y/y) after improving 0.2% in Q2. Financial sector earnings rose 6.2% (21.1% y/y) after rising 1.1% in Q2. Nonfinancial corporate profits rose 2.5% (3.3% y/y) after edging 0.5% higher in Q2. Earnings from abroad jumped 10.6% (26.3% y/y) following a 2.9% Q2  decline.

Foreign trade balance improvement added 1.59 percentage points to growth last quarter after adding 4.83 percentage points in Q2. Real exports increased 2.1% (1.5% y/y) after falling 0.5% in Q2. Real imports declined 1.2% (-1.8% y/y) after declining 8.3% in Q2. Inventories subtracted 0.22 percentage points from growth after subtracting 3.44 percentage point from Q2 growth.

Real final sales to private domestic purchasers grew 3.0% (2.6% y/y) last quartter after rising 2.9% in Q2, revised from 1.6%. Personal consumption expenditures rose 3.5% (2.6% y/y) after a 2.5% rise, revised from 1.6%. Durable goods spending rose 1.6% (3.2% y/y) after increasing 2.3% in Q2. Motor vehicle purchases declined 6.7% (+1.6% y/y) after strengthening 9.7% in Q2. Spending on home furnishings & appliances weakened 4.2% (+0.7% y/y) following a 2.0% fall. Recreational goods & vehicle buying surged 15.7% (7.0% y/y) last quarter after falling 2.5% in Q2.

Nondurable goods outlays in constant dollars rose 3.9% (3.0% y/y) last quarter following 2.2% growth in Q2. Apparel spending strengthened 6.7% (7.0% y/y) following a 5.8% rise. Food & beverage buying gained 2.0% (1.3% y/y) after edging 0.2% higher. Gasoline & fuel oil purchases improved 1.3% (-0.2% y/y) after falling 2.8% in Q2.



251223o8.jpg

251223p8.jpg

Real spending on services increased 3.7% (2.4% y/y) in Q3 after a 2.6% Q2 gain. Outlays on housing & utilities edged 0.3% higher (1.0% y/y) after easing 0.2% in Q2. Health care expenditures surged 6.8% (4.5% y/y) after a 4.8% increase. Transportation outlays gained 3.1% both  q/q and y/y after a 7.0% rise, while recreation spending jumped 6.6% (2.4% y/y) following a 3.9% rise. Restaurant & hotel expenditures increased 1.2% (2.0% y/y) after strengthening 5.9% in Q2. Financial services expenditures rose 2.6% both q/q and y/y following a 4.8% Q2 increase.

Business fixed investment in constant dollars increased 2.8% (3.9% y/y) last  quarter following a 7.3% Q2 rise, revised from 5.7%. Expenditures on structures declined 6.3% both q/q and y/y, after falling for six consecutive quarters. Expenditures on producers’ durable equipment increased 5.4% (7.4% y/y), after strengthening 8.5% in Q2. Outlays on information processing equipment rose 8.4% (18.6% y/y), after strengthening 11.7% during Q2. Industrial equipment investment rose 2.0% (3.4% y/y) after a 6.5% rise. Transportation equipment investment fell  2.7% (+3.0% y/y) after strengthening 25.2%. Intellectual property product spending rose 5.4% last quarter (6.4% y/y), after surging 15.0% in Q2.

Residential structures investment in real terms declined 5.1% (-1.8% y/y), the same as in Q2. It was the third consecutive quartly decline.

Government spending rose 2.2% (1.1% y/y) during the third quarter after an unrevised 0.1% easing in Q2. Federal government expenditures rose 2.9% (-1.0% y/y) after falling 5.3% in Q2. National defense expenditures increased 5.8% (1.0% y/y) after rising 0.9% in Q2. State & local government spending rose 1.8% (2.4% y/y) following a 3.1% rise.

The GDP chain price index rose 3.8% (3.0% y/y) last quarter vs. 2.1% in Q2. The PCE chain price index increased 2.8% (2.7% y/y) following a 2.1% rise. The PCE price index excluding food and energy rose 2.9% (2.9% y/y) after increasing 2.6% in Q2. The business fixed investment price index rose 5.2% (1.5% y/y) in Q3 after a 0.4% decline. The residential price index rose 4.5% (3.3% y/y) last quarter after a 2.2% rise, while the government price index increased 4.4% (3.5% y/y) following a 3.3% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.



251223q8.jpg

251223s8.jpg

- Consumer spending strengthens; growth in business investment decelerates.
- Corporate profit growth led by earnings abroad.
- Rise in chain price index accelerates.


U.S. GDP Growth is Strong in Q3; Profits Jump

Sandy Batten

251223r1.jpg

251223s1.jpg

Industrial production fell 0.1% m/m in October but rose 0.2% m/m (2.5% y/y) in November. The Action Economics Forecast Survey expected 0.1% monthly gains in both months. Manufacturing activity was tepid with manufacturing production falling 0.4% m/m in October and unchanged in November. Manufacturing output has not posted a monthly gain since July. Mining output fell 0.8% m/m in October but rebounded 1.7% m/m in November. Utilities output surged 2.6% m/m in October but fell 0.4% m/m in November. Compared to a year ago, manufacturing production is up 1.9%; mining output is up 3.9%; and utilities output is up 4.8%.

By market group, output of durable consumer goods plunged 2.6% m/m in October and fell another 0.2% in November. Production of durable consumer goods has declined in five of the previous six months. Production of nondurable consumer goods rose 0.5% m/m in both October and November. Compared to a year ago, durable consumer goods production has fallen 5.9% while nondurable consumer goods output has risen 2.7%. Business equipment production fell 0.3% m/m in October but rebounded 0.3% m/m in November and is up 11.2% y/y. Production of nonindustrial supplies fell 0.3% m/m in both October and November.

By industry group, output of durable goods fell 0.5% m/m in October and declined 0.1% m/m in November but were up 3.2% from a year ago. Motor vehicle and parts production slumped 5.1% m/m in October and declined 1.0% m/m in November to be down 5.6% from a year ago. Monthly motor vehicle output has declined in five of the previous six months. In contrast, production of computers and electronic products increased 1.5% m/m in October and rose 0.8% m/m in November. Aerospace production continued to rise, increasing 2.0% m/m in October and 1.1% m/m in November to be up 25.2% from a year ago. Output of nondurable goods fell 0.2% m/m in October and edged up 0.1% m/m in November. Their output is up 0.9% from a year ago. Apparel output fell 1.3% m/m in October but recovered in November, rising 2.3% m/m. Food and beverage output rose 0.3% m/m in October and another 1.2% in November.

Output of selected high-technology industries rebounded in October and November. After having declined 1.0% m/m in both August and September, production jumped 1.9% m/m in October and 1.1% m/m in November to stand 11.8% higher than a year ago. Manufacturing output excluding selected high-tech industries fell 0.4% m/m in October and was unchanged in November. It has risen only 1.6% over the past year. Manufacturing excluding motor vehicle production was unchanged in October and edged up 0.1% m/m in November; it is up 2.6% y/y.

Total industry capacity utilization edged down to 75.9% in October from 76.0% in September and then recovered the decline in November, edging up to 76.0%. In the manufacturing sector, the utilization rate slumped to 75.4% in October from 75.8% in September and remained at 75.4% in November. The October/November reading is the lowest since January.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.



251223t1.jpg

251223u1.jpg

- Today’s release contained figures for both October and November that had been delayed by the federal government shutdown.
- IP fell in October but recovered in November.
- Manufacturing output was tepid, falling in October and unchanged in November.
- A surge in utilities output in October prevented a larger decline in total production.
- A jump in mining output in November accounted for all of the increase in total production.


U.S. Industrial Production Fell in October and Recovered in November

251223v2.jpg

251223w2.jpg

New orders for durable goods fell a more-than-expected 2.2% (+4.8% y/y) in October following an upwardly revised 0.7% m/m rise in September (previously +0.5% m/m) and a 3.0% monthly jump in August. The Action Economics Forecast Survey expected a 1.5% m/m decline. A 23.7% m/m drop in aircraft orders more than accounted for the overall decline. Orders excluding aircraft increased 0.2% m/m (4.0% y/y) in October on top of a 0.5% monthly increase in September.

More generally, transportation orders fell 6.5% m/m (+7.3% y/y) in October following a 0.6% m/m increase in September and an 8.0% monthly jump in August. In addition to the drop in aircraft orders, orders for motor vehicles and parts edged up 0.1% m/m in October, their sixth consecutive monthly increase. Across other sectors, orders for primary metals fell 0.7% m/m, their first monthly decline in ten months. Orders for electrical equipment and appliances slumped 1.5% m/m, their first monthly decline in seven months. In contrast, orders for fabricated metal products rose 0.5% m/m, their fourth consecutive monthly gain. Machinery orders increased 0.8% m/m, their eighth consecutive monthly rise. Orders for computers and electronic products increased a solid 1.0% m/m on top of a 1.2% monthly increase in September.

Shipments of core capital goods (nondefense capital goods shipments excluding aircraft) are a reliable coincident indicator of business spending on equipment in the national accounts. They rose 0.7% m/m in October following an upwardly revised 1.2% monthly gain in September (previously +0.9%). The was the second consecutive monthly increase and the fifth in the past six months. The strong end to Q3 and the continued rise in the first month of Q4 provides a solid starting point for all of Q4. The October shipments figure was 5.9% at an annual rate above the Q3 average. Core capital goods orders rose 0.5% m/m in October on top of an upwardly revised 1.1% m/m increase in September (previously +0.9%). This was the fourth consecutive monthly rise.

Total manufacturing shipments edged up 0.1% m/m (+2.8% y/y) in October after having been essentially unchanged in September. Shipments of durable goods increased 0.6% m/m (5.9% y/y), led by 1.4% monthly jump in transportation shipments. However, apart from a 0.1% m/m decline in shipments of other durable goods, all of the other major sectors posted monthly gains in October. In contrast, shipments of nondurable goods fell 0.4% m/m (-0.3% y/y) in October for their third consecutive monthly decline. The monthly decline was led by a 2.4% m/m fall in shipments of petroleum and coal products although it was relatively widely spread across major sectors. The one exception was a 2.1% m/m increase in leather product shipments, but this came after four consecutive sizeable monthly declines.

Unfilled durable goods orders increased 0.2% m/m (7.9% y/y) in October for their third consecutive monthly gain following a 0.8% m/m rise in September and a 0.7% m/m increase in August. Total factory inventories were unchanged in October (+1.4% y/y) following 0.1% monthly declines in both August and September. Durable goods inventories edged up 0.1% m/m in October while inventories of nondurable goods fell 0.2% m/m, the third consecutive monthly decline.

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



251223x2.jpg

251223y2.jpg

- New orders for durable goods slumped 2.2% m/m in October following increases in both August and September
- A 24% monthly drop in aircraft orders drove the overall decline
- Orders excluding aircraft rose 0.2% m/m in October
- Core capital goods shipments and orders continued to rise in October with small upward revisions to September


Economy in Brief: 2005

Jump to:

Empire State Index Negative

European Consumer Inflation Continues Moderate in the Face of Rising Energy

U.S. Consumer Sentiment Depressed

Import Prices Surged

U.S. Business Inventories Rose

U.S. Business Inventories Rose

German Q1 Growth of 1% Boosts Euro-Zone Result to 0.5%

Higher Tax Receipts Lowered U.S. Budget Deficit