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>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071210a.jpg" align="left" border="0" height="265" width="353">
Industrial production in France was up strongly in October
showing a rise of 2.1%. In the past three months overall output is up
but without any real strong sector leadership. Auto sales are up
strongly in October. In the quarter to date output is up strongly over
its Q3 level expanding at an 8.1% annual rate. France follows the same
trend as Germany as its consumer goods output is lagging, falling by
2.1% so far in Q3. Capital goods output is up at a 6.9% annual rate in
Q4. Europe continues to show weak consumer demand/output and displays
an ongoing strong capital goods sector. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="7" scope="col">French IP excluding Construction </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar exept m/m</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">IP total</td>
<td>2.1%</td>
<td>-1.2%</td>
<td>0.1%</td>
<td>3.9%</td>
<td>5.7%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Consumer goods</td>
<td>0.4%</td>
<td>-1.5%</td>
<td>0.9%</td>
<td>-1.1%</td>
<td>3.3%</td>
<td>1.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Capital goods</td>
<td>1.0%</td>
<td>-1.0%</td>
<td>-0.1%</td>
<td>-0.3%</td>
<td>7.0%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Intermediate goods</td>
<td>1.9%</td>
<td>-0.9%</td>
<td>-0.6%</td>
<td>1.6%</td>
<td>3.5%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Auto</td>
<td>6.9%</td>
<td>-4.0%</td>
<td>1.3%</td>
<td>16.5%</td>
<td>6.9%</td>
<td>5.7%</td>
</tr>
</tbody>
</table>
</body></html>

Industrial production in France was up strongly in October showing a rise of 2.1%. In the past three months overall output is up but without any real strong sector leadership. Auto sales are up strongly in October. In the quarter to [...]

French IP Jumps in October

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>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071210d.jpg" align="left" border="0" height="265" width="353">
For October, the National Association of Realtors reported
that the level of pending home sales ticked 0.6% higher after a modest
1.4% rise during the prior month. The level of sales still is 18.4%
below October of last year and 23.0% year to date. The last two months
are the first back to back gains since early last year.
The latest monthly figure is about one third below the peak
level during the Summer of 2005. The data date back only to 2001.
These figures are analogous to the new home sales data from
the Commerce Dept. They measure existing home sales when the sales
contract is signed, not at the time the sale is closed.
The Realtors also indicated in an earlier report that the
number of homes on the market and available for sale rose 1.9% in
October after two months of moderate decline. The rise was to a level
of 445,300 units, double the level at the low in early 2005.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071210e.jpg" align="right" border="0" height="265" width="353">
In the Northeast, pending home sales rose 6.0% m/m and
recouped all of a September decline. The rise, however, followed two
months a sharp drop so sales remained 20% lower than at the start of
the year. Sales in the Western part of the nation also posted an 8.7%
m/m rise but remained off 21% from the level early in the year.
Sales in the rest of the country were down in October. In the
Midwest sales fell a slight 1.4% to remain 17% below early this year.
In the South sales fell another 7.8% to a level that was 31% from the
early year high.
The pending home sales data are available in Haver's PREALTOR
database and the number of homes on the market are in the REALTOR
database.
Housing Woes Weigh Heavily on the Economy from
the Federal Reserve Bank of St. Louis can be found <a href="http://stlouisfed.org/publications/re/2007/d/pdf/housing-woes.pdf">here</a>.

<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/WEEKLY/@W5/@W507/@W507.HTM">Pending
Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>87.2</td>
<td>&nbsp;86.7</td>
<td>&nbsp;&nbsp; -18.4%</td>
<td>112.1&nbsp;</td>
<td>124.2</td>
<td>120.5&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>80.6</td>
<td>69.5</td>
<td>-11.1</td>
<td>98.0</td>
<td>108.0</td>
<td>109.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>85.5</td>
<td>86.7</td>
<td>-11.7</td>
<td>102.0</td>
<td>116.4</td>
<td>118.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>91.6</td>
<td>99.3</td>
<td>-25.3</td>
<td>127.4</td>
<td>134.8</td>
<td>126.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>87.3</td>
<td>80.5</td>
<td>-16.9</td>
<td>109.6</td>
<td>128.7</td>
<td>122.7</td>
</tr>
</tbody>
</table>
French IP Jumps in October 
by <a href="/comment/Brusca.html">Robert
Brusca</a> December 10, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071210a.jpg" align="left" border="0" height="265" width="353">
Industrial production in France was up strongly in October
showing a rise of 2.1%. In the past three months overall output is up
but without any real strong sector leadership. Auto sales are up
strongly in October. In the quarter to date output is up strongly over
its Q3 level expanding at an 8.1% annual rate. France follows the same
trend as Germany as its consumer goods output is lagging, falling by
2.1% so far in Q3. Capital goods output is up at a 6.9% annual rate in
Q4. Europe continues to show weak consumer demand/output and displays
an ongoing strong capital goods sector. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">French IP
excluding Construction </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar exept m/m</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">IP total</td>
<td>2.1%</td>
<td>-1.2%</td>
<td>0.1%</td>
<td>3.9%</td>
<td>5.7%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Consumer goods</td>
<td>0.4%</td>
<td>-1.5%</td>
<td>0.9%</td>
<td>-1.1%</td>
<td>3.3%</td>
<td>1.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Capital goods</td>
<td>1.0%</td>
<td>-1.0%</td>
<td>-0.1%</td>
<td>-0.3%</td>
<td>7.0%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Intermediate goods</td>
<td>1.9%</td>
<td>-0.9%</td>
<td>-0.6%</td>
<td>1.6%</td>
<td>3.5%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Auto</td>
<td>6.9%</td>
<td>-4.0%</td>
<td>1.3%</td>
<td>16.5%</td>
<td>6.9%</td>
<td>5.7%</td>
</tr>
</tbody>
</table>
OECD LEIs Are Sagging&nbsp; 
by <a href="/comment/Brusca.html">Robert
Brusca</a> December 10, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071210b.jpg" align="left" border="0" height="265" width="353">
The MAIN OECD LEIs (leading economic Indicators, trend
adjusted) are dropping at a faster pace over the recent three months.
Japan&#8217;s drop is the sharpest. The OECD itself pushes emphasis on the
6-month changes in these indexes. On that basis the OECD, the OECD main
seven OECD Europe, Japan and the US all are declining. The US move is
the least negative. Japan&#8217;s is the most. Europe's slide is a bit less
than for the OECD overall. 
 

Still the message from these OECD LEIs is very clear. The area
is slowing. The OECD itself flags Japan as a worrisome case and talks
of moderate slowing elsewhere. Clearly financial markets and central
bank events can have an influence on events in these various countries
and regions. The outlook remains in flux since these indicators have
worsened since last month. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">OECD
Leading Indicators by Main regions/countries </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>-0.7%</td>
<td>-5.1%</td>
<td>-2.0%</td>
<td>-0.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD Big 7</td>
<td>-0.5%</td>
<td>-0.5%</td>
<td>-0.8%</td>
<td>-7.0%</td>
<td>-2.9%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">OECD Europe</td>
<td>0.0%</td>
<td>-0.3%</td>
<td>-0.5%</td>
<td>-3.1%</td>
<td>-1.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD Japan</td>
<td>-1.4%</td>
<td>-1.2%</td>
<td>-1.6%</td>
<td>-15.7%</td>
<td>-11.5%</td>
<td>-11.7%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>-0.5%</td>
<td>-0.4%</td>
<td>-0.7%</td>
<td>-6.0%</td>
<td>-0.7%</td>
<td>1.6%</td>
</tr>
</tbody>
</table>
German IP Trends Caught in Cross
Currents 
by <a href="/comment/Brusca.html">Robert
Brusca</a> December 10, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071210c.jpg" align="left" border="0" height="265" width="353">
German IP edged lower in October in the face of a spurt in
orders for the month that was dominated by bulk orders. Still with the
-0.3% October result German IP is entering the new quarter on an up
note. Q/Q calculations are concerned with comparing the average level
of IP in the current quarter to the average level in the previous
quarter. The spurt for IP in August and small the rise in September
still leave the level of IP in October, after its fall, above the Q3
average. IP is growing at annual rate of 2.6% entering Q4. Consumer
goods output is much weaker, up at just a 0.4% pace in Q4. As has been
the case capital goods output is up a strong 14.3% at an annual rate.
Intermediate output is off at a 2.2% pace. Ex construction, IP is
rising at nearly a nine percent annual rate. 
 

So Germany continues to be a bit of a conundrum. The trends in
the chart show that no direction is really dominant. The sectors are
moving in different directions, too. We know the strong euro is
creating problems; we are unsure how many. Germany remain a bit of an
enigma. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Total
German IP </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar exept m/m</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">IP total</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>1.9%</td>
<td>7.1%</td>
<td>7.5%</td>
<td>5.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer goods</td>
<td>-1.3%</td>
<td>0.1%</td>
<td>4.2%</td>
<td>12.0%</td>
<td>0.4%</td>
<td>3.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital goods</td>
<td>2.1%</td>
<td>-0.5%</td>
<td>1.6%</td>
<td>13.4%</td>
<td>13.4%</td>
<td>10.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediary goods</td>
<td>-1.0%</td>
<td>0.2%</td>
<td>1.5%</td>
<td>2.9%</td>
<td>6.9%</td>
<td>5.6%</td>
</tr>
<tr class="grey2">
<td colspan="7" class="firstcol">Memo</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>0.2%</td>
<td>0.7%</td>
<td>2.0%</td>
<td>12.6%</td>
<td>4.3%</td>
<td>-0.8%</td>
</tr>
</tbody>
</table>
</body></html>

For October, the National Association of Realtors reported that the level of pending home sales ticked 0.6% higher after a modest 1.4% rise during the prior month. The level of sales still is 18.4% below October of last year and 23.0% [...]

U.S. Pending Home Sales Ticked Higher, Again

<!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>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207d.jpg" align="left" border="0" height="265" width="353">
The University of Michigan's consumer sentiment index for
early this month slid 2.1% to 74.5 from an upwardly revised November
level. It was the third consecutive monthly decline and for the fourth
quarter sentiment looks to have dropped 10% from the 3Q average.
The current conditions index stabilized a bit and rose 0.7%
after a hefty 6.3% November decline. Conversely, the expectations index
continued the prior two month's rate of decline and fell 4.5% m/m to
63.2, the lowest reading since 2005.
Current buying conditions for large household goods improved
modestly m/m but remained down 13.0% from last December. The view of
current personal finances, however, slid 3.0% for the second sharp
monthly decline (-17.6% y/y).
Expectations for personal finances fell 3.5%, repeating a
November drop (-10.5% y/y) and expectations for business conditions
during the next year fell 11.0% (-38.1% y/y). Expectations for business
conditions during the next five years, however, remained stable with
the November level which was still depressed by nearly one quarter from
a year ago.
The rise in gasoline prices has raised expectations for
inflation during the next twelve months to 4.5% from 4.3% in November
and from 3.5% one year ago. For the next five to ten years expectations
were for a 3.6% rise in prices.
Opinions about government policy fell sharply. The 7.3% m/m
decline brought this opinion measure down 14.6% from one year ago.
The University of Michigan survey is not seasonally
adjusted.The reading is based on telephone interviews with about 500
households at month-end; the mid-month results are based on about 300
interviews. The summary indexes are in Haver's USECON database,
with details in the proprietary UMSCA database.
Consumer sentiment, the economy, and the news media
is a 2004 paper from the Federal Reserve Bank of San
Francisco and it can be found <a href="http://www.frbsf.org/publications/economics/papers/2004/wp04-09bk.pdf">
here</a>.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207e.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207f.jpg" height="265" width="312">

<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">Dec (Prelim</th>
<th scope="col">Nov </th>
<th scope="col">Nov&nbsp; y/y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>74.5</td>
<td>76.1</td>
<td>-18.8% </td>
<td>87.3</td>
<td>88.5</td>
<td>95.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current
Conditions</td>
<td>92.1</td>
<td>91.5</td>
<td>-14.8%</td>
<td>105.1</td>
<td>105.9</td>
<td>105.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Expectations</td>
<td>63.2</td>
<td>66.2</td>
<td>-22.2%</td>
<td>75.9</td>
<td>77.4</td>
<td>88.5</td>
</tr>
</tbody>
</table>
</body></html>

The University of Michigan's consumer sentiment index for early this month slid 2.1% to 74.5 from an upwardly revised November level. It was the third consecutive monthly decline and for the fourth quarter sentiment looks to have [...]

Michigan Consumer Sentiment Down Hard

<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/071207a.jpg" width="353">
The 94,000 worker rise in nonfarm payrolls in November reported today by the Bureau of Labor Statistics was a bit stronger than early expectations for a 70,000 increase. However, it was much weaker than forecasts which were ratcheted up after Wednesday&#39;s ADP report of a strong gain in private nonfarm payrolls. And while the increase was accompanied by a slight upward revision to the gain in October jobs, the rise in September employment was more than halved to 44,000.
The unemployment rate held steady at 4.7% last month. Household employment surged 696,000 (0.7% y/y) and more than offset the prior month&#39;s 250,000 decline. The labor force also surged 617,000 (0.9% y/y). The labor force participation rate jumped to 66.1%, its highest level since July but still down from 66.2% averaged last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207b.jpg" width="353">
The level of average hours worked has remained notably stable recently. As a result, for the fourth quarter so far the level of aggregate hours worked (employment times hours) is up just 0.9% (AR) following a 3Q rise of 1.2%. During the last ten years there has been a 44% correlation between the gain in hours and the gain in real GDP. That correlation is down from 56% over the last 20 years and from 74% over the last 30 due to the faster growth in worker productivity.
Private service sector jobs increased 97,000 (1.7% y/y) last month after an unrevised gain of 154,000 in October. Retail employment grew 24,200 (0.4% y/y) and professional &amp; business service jobs rose 30,000 (1.8% y/y). Jobs in the education sector ticked up 2,000 (2.6% y/y) while the health care sector added 25,300 workers (3.2% y/y). Employment in the temporary help industry rose by 11,300 (-1.2% y/y).
Job losses in the service sector were logged in the finance industry. The 20,000 worker decline (-0.1% y/y) was the fifth decline in the last six months. In addition, following the drop off in the housing industry, real estate employment fell 10,800 (-0.2% y/y) for the second decline in the last three months.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207c.jpg" width="353">
Employment in the government sector also rose a modest 30,000 (1.1% y/y) after a 38,000 worker increase in October. Very weak hiring by the Federal government (-0.3% y/y) has held back gains in the total.
Factory sector payrolls fell further by11,000, adding to a decline that began early last year. These declines remain at odds with the ISM reports of job growth in manufacturing. Construction employment fell 24,00 last month.
Average hourly earnings increased 0.3% while the prior month&#39;s gain was revised down sharply and now shows a decline of 0.2%. Factory sector earnings bounced back 0.4% (2.7% y/y) from a 0.3% decline in October which was initially reported as an increase. Private service-providing earnings rose 0.3% (3.9% y/y) following a 0.2% October decline that also was originally reported as an increase.
The minimum wage and the labor market from the Federal Reserve Bank of Cleveland can be found <a href="http://www.clevelandfed.org/research/Commentary/2007/0501.pdf"> here</a>.
Fed GovernorRandall S. Kroszner&#39;s speech titled Loan Modifications and Foreclosure Prevention is available <a href="http://www.federalreserve.gov/newsevents/testimony/kroszner20071206a.htm"> here</a>.

<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/@EB/@EB01/@EB01.HTM">Employment</a> : 000s </th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>94</td>
<td>170</td>
<td>44</td>
<td>1.2%</td>
<td>1.9%</td>
<td>1.7%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Previous</td>
<td>--</td>
<td>166</td>
<td>96</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-11</td>
<td>-15</td>
<td>-15</td>
<td>-1.3%</td>
<td>-0.2%</td>
<td>-0.6%</td>
<td>-1.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-24</td>
<td>-9</td>
<td>-25</td>
<td>-1.6%</td>
<td>4.8%</td>
<td>5.2%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8 (Nov &#39;06)</td>
<td>33.8</td>
<td>33.8</td>
<td>33.7</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>1.3%</td>
<td>3.8%</td>
<td>3.9%</td>
<td>2.8%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>4.7%</td>
<td>4.7%</td>
<td>4.7%</td>
<td>4.5% (Nov &#39;06)</td>
<td>4.6%</td>
<td>5.1%</td>
<td>5.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

The 94,000 worker rise in nonfarm payrolls in November reported today by the Bureau of Labor Statistics was a bit stronger than early expectations for a 70,000 increase. However, it was much weaker than forecasts which were ratcheted [...]

U.S. Payrolls Increase Light, Unemployment Steady

<!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>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207a.jpg" align="left" border="0" height="265" width="353">
The 94,000 worker rise in nonfarm payrolls in November
reported today by the Bureau of Labor Statistics was a bit stronger
than early expectations for a 70,000 increase. However, it was much
weaker than forecasts which were ratcheted up after Wednesday's ADP
report of a strong gain in private nonfarm payrolls. And while the
increase was accompanied by a slight upward revision to the gain in
October jobs, the rise in September employment was more than halved to
44,000.
The unemployment rate held steady at 4.7%
last month. Household employment surged 696,000 (0.7% y/y) and more
than offset the prior month's 250,000 decline. The labor force also
surged 617,000 (0.9% y/y). The labor force participation rate jumped to
66.1%, its highest level since July but still down from 66.2% averaged
last year.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207b.jpg" align="right" border="0" height="265" width="353">
The level of average hours worked has remained notably stable
recently. As a result, for the fourth quarter so far the level of
aggregate hours worked (employment times hours) is up just 0.9% (AR)
following a 3Q rise of 1.2%. During the last ten years there has been a
44% correlation between the gain in hours and the gain in real GDP.
That correlation is down from 56% over the last 20 years and from 74%
over the last 30 due to the faster growth in worker productivity.
Private service sector jobs increased 97,000 (1.7% y/y) last
month after an unrevised gain of 154,000 in October. Retail employment
grew 24,200 (0.4% y/y) and professional &amp; business service jobs
rose 30,000 (1.8% y/y). Jobs in the education sector ticked up 2,000
(2.6% y/y) while the health care sector added 25,300 workers (3.2%
y/y). Employment in the temporary help industry rose by 11,300 (-1.2%
y/y).
Job losses in the service sector were logged in the finance
industry. The 20,000 worker decline (-0.1% y/y) was the fifth decline
in the last six months. In addition, following the drop off in the
housing industry, real estate employment fell 10,800 (-0.2% y/y) for
the second decline in the last three months.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207c.jpg" align="left" border="0" height="265" width="353">
Employment in the government sector also rose a modest 30,000
(1.1% y/y) after a 38,000 worker increase in October. Very weak hiring
by the Federal government (-0.3% y/y) has held back gains in the total.
Factory sector payrolls fell further by11,000, adding to a
decline that began early last year. These declines remain at odds with
the ISM reports of job growth in manufacturing. Construction employment
fell 24,00 last month.
Average hourly earnings increased 0.3%
while the prior month's gain was revised down sharply and now shows a decline
of 0.2%. Factory sector earnings bounced back 0.4% (2.7% y/y) from a
0.3% decline in October which was initially reported as an increase.
Private service-providing earnings rose 0.3% (3.9% y/y) following a
0.2% October decline that also was originally reported as an increase.
The minimum wage and the labor market
from the Federal Reserve Bank of Cleveland can be found <a href="http://www.clevelandfed.org/research/Commentary/2007/0501.pdf">
here</a>.
Fed GovernorRandall S. Kroszner's speech titled Loan
Modifications and Foreclosure Prevention is available <a href="http://www.federalreserve.gov/newsevents/testimony/kroszner20071206a.htm">
here</a>.

<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/@EB/@EB01/@EB01.HTM">Employment</a>
: 000s </th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>94</td>
<td>170</td>
<td>44</td>
<td>1.2%</td>
<td>1.9%</td>
<td>1.7%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>166</td>
<td>96</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-11</td>
<td>-15</td>
<td>-15</td>
<td>-1.3%</td>
<td>-0.2%</td>
<td>-0.6%</td>
<td>-1.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-24</td>
<td>-9</td>
<td>-25</td>
<td>-1.6%</td>
<td>4.8%</td>
<td>5.2%</td>
<td>3.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8 (Nov '06)</td>
<td>33.8</td>
<td>33.8</td>
<td>33.7</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>1.3%</td>
<td>3.8%</td>
<td>3.9%</td>
<td>2.8%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>4.7%</td>
<td>4.7%</td>
<td>4.7%</td>
<td>4.5% (Nov '06)</td>
<td>4.6%</td>
<td>5.1%</td>
<td>5.5%</td>
</tr>
</tbody>
</table>
Michigan Consumer Sentiment DownHard 
by <a href="/comment/Moeller.html">Tom
Moeller</a> December 7, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207d.jpg" align="left" border="0" height="265" width="353">
The University of Michigan's consumer sentiment index for
early this month slid 2.1% to 74.5 from an upwardly revised November
level. It was the third consecutive monthly decline and for the fourth
quarter sentiment looks to have dropped 10% from the 3Q average.
The current conditions index stabilized a bit and rose 0.7%
after a hefty 6.3% November decline. Conversely, the expectations index
continued the prior two month's rate of decline and fell 4.5% m/m to
63.2, the lowest reading since 2005.
Current buying conditions for large household goods improved
modestly m/m but remained down 13.0% from last December. The view of
current personal finances, however, slid 3.0% for the second sharp
monthly decline (-17.6% y/y).
Expectations for personal finances fell 3.5%, repeating a
November drop (-10.5% y/y) and expectations for business conditions
during the next year fell 11.0% (-38.1% y/y). Expectations for business
conditions during the next five years, however, remained stable with
the November level which was still depressed by nearly one quarter from
a year ago.
The rise in gasoline prices has raised expectations for
inflation during the next twelve months to 4.5% from 4.3% in November
and from 3.5% one year ago. For the next five to ten years expectations
were for a 3.6% rise in prices.
Opinions about government policy fell sharply. The 7.3% m/m
decline brought this opinion measure down 14.6% from one year ago.
The University of Michigan survey is not seasonally
adjusted.The reading is based on telephone interviews with about 500
households at month-end; the mid-month results are based on about 300
interviews. The summary indexes are in Haver's USECON database,
with details in the proprietary UMSCA database.
Consumer sentiment, the economy, and the news media
is a 2004 paper from the Federal Reserve Bank of San
Francisco and it can be found <a href="http://www.frbsf.org/publications/economics/papers/2004/wp04-09bk.pdf">
here</a>.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207e.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071207f.jpg" height="265" width="312">


<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">Dec (Prelim</th>
<th scope="col">Nov </th>
<th scope="col">Nov&nbsp; y/y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>74.5</td>
<td>76.1</td>
<td>-18.8% </td>
<td>87.3</td>
<td>88.5</td>
<td>95.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Current
Conditions</td>
<td>92.1</td>
<td>91.5</td>
<td>-14.8%</td>
<td>105.1</td>
<td>105.9</td>
<td>105.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;
Expectations</td>
<td>63.2</td>
<td>66.2</td>
<td>-22.2%</td>
<td>75.9</td>
<td>77.4</td>
<td>88.5</td>
</tr>
</tbody>
</table>
</body></html>

<!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>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071206h.jpg" align="left" border="0" height="265" width="353">
German orders jumped in October rising by 4% after an upward
revised drop of 1.6% in Sept. The gain saw the domestic orders
component rise by 2.7% as foreign orders rose by 5%. Foreign orders are
now rising at a 33% pace over three months and clearly accelerating
while domestic orders post a slightly stronger three month growth rate
of 2.9%. Sales of consumer and intermediate goods remain weak while
capital goods sales surged in October. 
 

Order detail shows that bulk orders account for the surge in
October. Bulk orders were behind the 8.1% surge in investment goods
orders that saw domestic investment goods orders rise by 6.4% and
foreign orders rise by 9.4%. Basic goods orders fell by 0.4% in October
and consumer goods order volumes fell by 0.8%. Orders from outside the
Euro Area increased by 4.2% while Ex-German Euro Area orders rose by a
sharp 6%. 
 

For the quarter underway orders are not tremendously strong
with overall orders rising at an annual rate that exceeds 20%. 
 

On balance German institutes are still cutting their forecasts
for 2008. The chart (above) shows that even with this new surge, orders
are in lower trajectory than they were in their hey-day. It is unclear
what this surge means for the outlook. It may be a fluke of orders
clumping since most other measures continue to show slowing. I do not
think it is a revival. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> German
Orders and Sales By Sector and Origin</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="4">% Saar</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>3-MO</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">Total Orders</td>
<td>4.0%</td>
<td>-1.6%</td>
<td>1.9%</td>
<td>17.9%</td>
<td style="color: red;">8.6%</td>
<td>10.3%</td>
<td>7.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Foreign</td>
<td>5.0%</td>
<td>-0.8%</td>
<td>3.2%</td>
<td>33.6%</td>
<td>15.6%</td>
<td>15.5%</td>
<td>6.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Domestic</td>
<td>2.7%</td>
<td>-2.4%</td>
<td>0.4%</td>
<td>2.9%</td>
<td style="color: red;">1.4%</td>
<td style="color: red;">5.1%</td>
<td>7.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol" colspan="8">Sector
Sales</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG/Mining</td>
<td>1.2%</td>
<td style="color: red;">-0.3%</td>
<td>1.3%</td>
<td>9.2%</td>
<td style="color: red;">4.5%</td>
<td>6.6%</td>
<td>6.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer</td>
<td>0.2%</td>
<td style="color: red;">-0.3%</td>
<td>1.7%</td>
<td>6.8%</td>
<td>3.3%</td>
<td style="color: red;">1.9%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Consumer Durables</td>
<td>-1.7%</td>
<td style="color: red;">-4.0%</td>
<td>4.2%</td>
<td style="color: red;">-6.8%</td>
<td style="color: red;">-3.4%</td>
<td style="color: red;">-0.9%</td>
<td>7.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Nondurables</td>
<td>0.6%</td>
<td style="color: red;">0.5%</td>
<td>1.2%</td>
<td>9.5%</td>
<td>4.7%</td>
<td>2.5%</td>
<td>2.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital Goods</td>
<td>3.4%</td>
<td style="color: red;">-0.2%</td>
<td>1.1%</td>
<td>18.2%</td>
<td style="color: red;">8.7%</td>
<td>9.9%</td>
<td>7.2%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td style="color: red;">-0.7%</td>
<td style="color: red;">-0.2%</td>
<td>1.3%</td>
<td>1.3%</td>
<td style="color: red;">0.7%</td>
<td style="color: red;">5.6%</td>
<td>7.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">All Manufacturing Sales</td>
<td>1.2%</td>
<td style="color: red;">-0.2%</td>
<td>1.3%</td>
<td>9.7%</td>
<td style="color: red;">4.7%</td>
<td>6.4%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
</body></html>

German orders jumped in October rising by 4% after an upward revised drop of 1.6% in Sept. The gain saw the domestic orders component rise by 2.7% as foreign orders rose by 5%. Foreign orders are now rising at a 33% pace over three [...]

German Orders JUMP!

<!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>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071206e.jpg" align="left" height="265" width="353">
The Mortgage Bankers' Association today reported that
foreclosures started on all mortgages rose to a still low 0.78% of
mortgages outstanding. Nevertheless, that was by far the highest
foreclosure rate on record.
Foreclosure rates on both prime and subprime mortgages rose
sharply. Rates for prime FRM rose to 0.22% of loans issued from 0.18%
in 2Q and an average of 0.14% last year. 28 million loans were serviced.
Foreclosures on prime ARMs similarly rose to 1.02% from 0.62%
and from 0.30% last year. 6 million of these loans were serviced.
Foreclosures on subprime mortgage debt, however, rose much
more sharply as employment growth slowed recently and interest rates
rose. In total, foreclosures on subprime mortgages rose to 3.12% of
outstanding loans. That amounted to 6 million loans. The rise was
evenly spread between fixed and variable rate loans.
Foreclosures on subprime fixed rate debt rose to 1.38% of
loans outstanding for a total of 3 million loans serviced.
On variable rate subprime debt, however, foreclosures soared
to a 4.72% rate, up from 3.84% in 2Q and up from 2.0% last year. Three
million loans were serviced.
The Rise and Fall of Subprime Mortgages from
the Federal Reserve Bank of Dallas can be found <a href="http://dallasfed.org/research/eclett/2007/el0711.pd">
here</a>.
These data series are available in Haver's MBAMTG
database.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071206f.jpg" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071206g.jpg" height="265" width="312">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Mortgages
in Foreclosure (%)</th>
<th scope="col">3Q '07</th>
<th scope="col">2Q '07</th>
<th scope="col">3Q '06</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All Mortgages</td>
<td>0.78</td>
<td>0.65</td>
<td>0.46</td>
<td>1.84</td>
<td>1.64</td>
<td>1.73</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Conventional Prime</td>
<td>0.37</td>
<td>0.27</td>
<td>0.19</td>
<td>0.77</td>
<td>0.72</td>
<td>0.77</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Fixed Rate</td>
<td>0.22</td>
<td>0.18</td>
<td>0.13</td>
<td>0.14</td>
<td>0.15</td>
<td>0.16</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
ARM</td>
<td>1.02</td>
<td>0.62</td>
<td>0.30</td>
<td>0.30</td>
<td>0.19</td>
<td>0.18</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Subprime</td>
<td>3.12</td>
<td>2.72</td>
<td>1.82</td>
<td>7.23</td>
<td>5.66</td>
<td>5.98</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Fixed Rate</td>
<td>1.38</td>
<td>1.35</td>
<td>0.97</td>
<td>1.06</td>
<td>1.08</td>
<td>1.44</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
ARM</td>
<td>4.72</td>
<td>3.84</td>
<td>2.19</td>
<td>2.20</td>
<td>1.52</td>
<td>1.52</td>
</tr>
</tbody>
</table>
</body></html>

The Mortgage Bankers' Association today reported that foreclosures started on all mortgages rose to a still low 0.78% of mortgages outstanding. Nevertheless, that was by far the highest foreclosure rate on record. Foreclosure rates on [...]

U.S. Mortgage Foreclosures: Conventional Up, Subprime Soared

<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>
<table border="0" cellspacing="0" width="100%">

</table>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071206c.jpg" width="353">
Credit market debt outstanding owed by all sectors of the economy grew 11.0% (AR, 9.3% y/y) during the third quarter. The increase was the strongest since 4Q 2005 and reflected broad based, strong gains in the financial sector..
Credit market debt owed by the financial sector zoomed at a 16.5% (11.2% y/y) annual rate which was the strongest rate of gain since early 2001. Gains at commercial banks (41.0% y/y), bank holding companies (23.2 y/y), savings institutions (-8.8% y/y) and credit unions (68.9% y/y) were well into double or triple digit rates of growth.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071206d.jpg" width="353">
Stable was consumer credit growth which held at an 8.2% (7.8% y/y) quarterly rate of growth. Households&#39; obligations on home mortgages grew 7.3% (8.0% y/y) which was half the growth rates seen a few years back. Conversely, credit card debt rose sharply (5.3% y/y) and the quarterly growth rate of 10.3% was the quickest since 2004. Bank loans also surged.
The net worth of the US household sector last quarter improved to a record $58.604 trillion as the dollar gain in household sector assets, which totaled 72.8 trillion, outweighed by four times the growth of liabilities which total $14.1 trillion.
Total assets of households and nonprofit organizations grew at a 4.9% rate (7.4 y/y). Households&#39; ownership of real estate assets was much reduced to a 2.1% growth rate (4.3% y/y), the slowest rate of gain since 1993. That, however, was offset by a 6.4% (9.5% y/y) gain in financial assets led by a one-quarter (7.2% y/y) rise in the value of credit market instruments and a rise in the value of mutual fund share holdings (21.8% y/y). The value of money market shares rose by one third as assets were shifted to a safe haven (24.5% y/y).

<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/FFUNDS/@F2/@F201/@F201.HTM">Flow of Funds</a> (Y/Y Chg.)</th>
<th scope="col">% of Total</th>
<th scope="col">3Q&#39;07</th>
<th scope="col">2Q&#39;07</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Credit Market Debt Outstanding</td>
<td>--</td>
<td>9.3%</td>
<td>8.7%</td>
<td>9.5%</td>
<td>8.8%</td>
<td>9.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Federal Government</td>
<td>12%</td>
<td>4.3%</td>
<td>3.0%</td>
<td>3.9%</td>
<td>7.0%</td>
<td>9.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Households</td>
<td>27%</td>
<td>7.8%</td>
<td>8.2%</td>
<td>10.3%</td>
<td>10.7%</td>
<td>11.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Nonfinancial Corporate Business</td>
<td>14%</td>
<td>11.0%</td>
<td>9.8%</td>
<td>8.4%</td>
<td>5.1%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Financial Sectors</td>
<td>32%</td>
<td>11.2%</td>
<td>8.9%</td>
<td>10.1%</td>
<td>8.5%</td>
<td>9.2%</td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Net Worth: Households &amp; Nonprofit Organizations (Trillions)</td>
<td>--</td>
<td>$58.604</td>
<td>$57.979</td>
<td>$56.117</td>
<td>$52.061</td>
<td>$48.164</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Tangible Assets: Households</td>
<td>--</td>
<td>$27.484</td>
<td>$27.325</td>
<td>$26.671</td>
<td>$25.019</td>
<td>$22.464</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Financial Assets: Households</td>
<td>--</td>
<td>$45.277</td>
<td>$44.579</td>
<td>$42.880</td>
<td>$39.203</td>
<td>$36.747</td>
</tr>
</tbody>
</table>
</body>
</html>

Credit market debt outstanding owed by all sectors of the economy grew 11.0% (AR, 9.3% y/y) during the third quarter. The increase was the strongest since 4Q 2005 and reflected broad based, strong gains in the financial sector.. [...]

US Flow of Funds: Debt Growth Back Up Due To Financial Sector

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

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

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

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

250502A5.jpg

250502B5.jpg

Nonfarm payrolls increased 177,000 (1.2% y/y) during April after rising 185,000 in March, revised from 228,000, and 102,000 in February, revised from 117,000. Expectations had been for a 130,000 rise in the Action Economics Forecast Survey. The latest figure left the three-month average change at 155,000 in April, down from 232,000 in January.

Average hourly earnings rose 0.2% during April after unrevised increases of 0.3% in March and 0.2% in February. Earnings growth of 3.8% y/y was below the 5.9% high in March 2022.

The unemployment rate, measured in the household survey, held m/m at an expected 4.2% in April, and compared to 4.1% in February and 4.0% in January. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, eased to 7.8% in April from 7.9% in March.

In the **establishment survey**, private-sector employment rose 167,000 (1.2% y/y) after a 170,000 March increase. Factory sector jobs edged 1,000 lower (-0.7% y/y) following a 3,000 gain. Construction sector employment increased 11,000 (1.7% y/y), after rising 7,000 in March.

Private service-producing sector employment increased 156,000 (1.4% y/y) in April after improving 161,000 in March. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 70,000 (3.4% y/y) last month following a 74,000 March increase. Leisure & hospitality employment rose 24,000 (1.3% y/y) after a 38,000 gain. Trade, transportation & utilities rose 32,000 (0.9% y/y) in April following a 25,000 March increase. Professional & business services employment rose 17,000 (-0.1% y/y) following a 3,000 rise while temporary help employment rose 3,600 (-3.9% y/y) following a 2,700 decline. Financial activities employment improved 14,000 (1.2% y/y) after a 6,000 gain. The number of information sector jobs held steady (-0.4% y/y) last month after falling 2,000 in March.

Government sector payrolls rose 10,000 (1.3% y/y) last month after increasing 15,000 in March. The number of local government jobs increased 13,000 (1.4% y/y) following a 17,000 gain. State government employment rose 6,000 (1.8% y/y) following a 2,000 March increase but federal government payrolls fell 9,000 (-0.3% y/y), the third consecutive monthly decline.

Private-sector average hourly earnings rose 0.2% (3.8% y/y) in April after increasing 0.3% in March. Earnings in the goods-producing sector eased 0.1% (+4.0% y/y) following a 0.6% gain. Earnings in construction rose 0.3% (3.6% y/y), after a 0.2% rise but factory sector earnings declined 0.3% (+4.3% y/y) after surging 0.8% in March. In the private services-sector, earnings rose 0.2% (3.7% y/y) in April for the third straight month. Information sector pay increased 1.0% (5.2% y/y) last month after easing 0.1%, and financial activities earnings rose 0.5% (4.3% y/y) for the second straight month. Trade, transportation & utilities sector pay increased 0.4% (3.4% y/y) after 0.6%. Professional & business sector earnings increased 0.1% (4.4% y/y) after 0.2% in March. Leisure & hospitality earnings held steady (+3.8% y/y) following a 0.6% March increase.

250502C5.jpg

250502D5.jpg

The length of the average workweek held steady at 34.3 hours in April. The workweek in the goods-producing sector eased to 39.8 hours from 40.0 hours. The construction sector average workweek eased to 39.0 hours from 39.3 hours while the factory sector workweek moved lower to 40.0 hours from 40.2. The average workweek in the private service sector held at 33.2 hours. Professional & business service hours fell to 36.3 hours from 36.4 while trade, transportation & utilities hours improved to 34.3 from 34.0 hours. Private education hours rose slightly to 32.8, but leisure & hospitality held steady at 25.5 hours.

In the **household survey**, the unemployment rate held at 4.2% in April as employment rose 436,000 and the size of the labor force increased 518,000. The labor force participation rate edged up to 62.6% last month from 62.5% in March. It remained below the high of 63.3% early in 2020. The rate for teenagers declined to 36.9%. For workers aged 20-24, the rate held steady at 72.1%, up from 71.8% six months earlier. For workers aged 25-54 the rate rose to 83.6%, a five-month high. For individuals 55 and over, the rate improved to 38.4% in April.

The employment/population ratio for all workers in April rose to 60.0%. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

250502X5.jpg

250502F5.jpg

- Job growth spreads across most sectors.
- Earnings growth trend decelerates.
- Jobless rate holds steady.

U.S. Job Growth Is Firm in April but March Gain Is Lessened

Winnie Tapasanun

250502F32.jpg

250502G32.jpg

Total factory orders rose a slightly less-than-expected 4.3% m/m in March after rises of 0.5% in February and 1.8% in January, data from the U.S. Census Bureau showed. A 4.5% m/m March increase had been expected in the Action Economics Forecast Survey. The March reading was the third successive monthly rise and the largest since July 2024. The year-on-year rate accelerated to 6.0% in March, the highest since November 2022, from 2.3% in February. Notably, orders for nondefense aircraft & parts soared 139.0% in March following a 7.4% drop in February and a 92.9% surge in January. Factory orders excluding defense rose 4.8% (5.9% y/y), the largest of three straight m/m/ rises, after a 0.4% February increase. Factory orders excluding the transportation sector fell 0.2% (+1.1% y/y), the first m/m fall since August, after rising 0.3% in February, January and December.

Durable goods orders jumped 9.2% (11.9% y/y) in March, the third consecutive m/m gain and the biggest since July 2024, on top of a 0.8% increase in February (matching +9.2% m/m in the advance report on April 24). The March jump reflected m/m orders increases of 27.1% (the largest m/m surge since July 2024; 31.2% y/y) in transportation equipment, 1.1% (4.9% y/y) in primary metals, 0.5% (-0.4% y/y) in furniture & related products, 0.1% (2.5% y/y) in fabricated metal products, and 0.1% (0.9% y/y) in machinery. To the downside, durable goods orders for computers & electronic products (-1.3%; +2.7% y/y) and electrical equipment, appliances & components (-1.0%; +4.2% y/y) declined m/m in March.

Nondurable goods orders, which equal nondurable goods shipments, fell 0.3% (+0.4% y/y) in March, the first m/m fall since September, after a 0.1% uptick in February. The March fall reflected m/m drops of 2.4% (-9.3% y/y) in petroleum & coal products and 0.9% (-1.2% y/y) in apparel. To the upside, the following nondurable goods shipments rose m/m in March: leather & allied products (1.5%; 8.6% y/y), beverage & tobacco products (0.7%; 5.8% y/y), paper products (0.6%; 2.3% y/y), printing (0.3%; 3.8% y/y), textile mills (0.3%; 0.8% y/y), chemical products (0.2%; 5.4% y/y), plastics & rubber products (0.2%; 0.4% y/y), food products (0.1%; 1.8% y/y), and textile products (0.1%; 2.1% y/y).

Total shipments slipped 0.1% (+2.0% y/y) in March, the first m/m easing since October, after a 0.7% increase in February. Excluding transportation, shipments were virtually unchanged m/m (+1.1% y/y) in March following six straight m/m gains. Shipments of durable goods industries inched up 0.1% (3.8% y/y) in March, the smallest of four consecutive m/m increases, after a 1.3% advance in February. This reflected m/m durable goods shipments rises of 1.2% (5.6% y/y) in primary metals, 0.9% (0.1% y/y) in furniture & related products, 0.8% (-0.2% y/y) in nonmetallic mineral products, 0.4% (0.0% y/y) in machinery, 0.3% (1.8% y/y) in fabricated metal products, 0.2% (4.5% y/y) in computers & electronic products, 0.2% (-2.1% y/y) in wood products, and 0.1% (3.0% y/y) in electrical equipment, appliances & components. In contrast, durable goods shipments for transportation equipment (-0.5%; +7.3% y/y) and miscellaneous durable goods (-0.1%; +2.9% y/y) fell m/m in March following three successive m/m increases.

Unfilled orders rose 2.0% (2.3% y/y) in March, up for the eighth month in nine, after a 0.1% uptick in February. Excluding transportation, unfilled orders dipped 0.1% (+0.7% y/y) in March, the first m/m easing since May 2024, after holding steady in February. Backlogs of durable goods rose 2.0% (2.3% y/y) in March, reflecting m/m rises of 3.1% (3.1% y/y) in transportation equipment and 0.2% (2.4% y/y) in electrical equipment, appliances & components.

Inventories edged up 0.1% (0.9% y/y) in March, the fifth straight m/m increase, after rising at the same pace in the prior two months. Excluding transportation, inventories were up 0.1% (0.5% y/y) in March, the fifth consecutive m/m rise. Durable goods inventories ticked up 0.1% (1.0% y/y) in March after holding steady in February and January; nondurable goods inventories edged up 0.1% (0.8% y/y), the fifth successive m/m increase.

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

250502H32.jpg

250502I32.jpg

- March manufacturers’ new orders +4.3% m/m; +6.0% y/y, highest since Nov. ’22.
- Durable goods orders (+9.2%) jump m/m, while nondurable goods orders (-0.3%) and shipments (-0.1%) decline m/m.
- Transportation equipt. orders +27.1% m/m, w/ a 139.0% m/m surge in nondefense aircraft & parts orders.
- Unfilled orders +2.0%, the eighth m/m rise in nine months.
- Inventories +0.1%, the fifth consecutive m/m increase.

U.S. Factory Orders Increase for the Third Straight Month in March

250502E.jpg

The global manufacturing data showed broad weakening in April as conditions weakened across more than half of the contributing early reporters in the S&P survey of manufacturing. Of the 18 early reporting countries, more than half of them showed deceleration over six months and 12 months. Over three months, only 8 of 18 showed deterioration and that's about as good as it got in this report. In the current month, month-to-month changes showed more than half of the survey contributors showing weaker results than the month before. In the S&P framework, manufacturing improved month-to-month for the U.S.; however, looking at sequential averages for the U.S., U.K., European monetary union, Canada, and Japan, we see a steady weakening and results over 12 months, over six months versus 12 months, and for three months versus 6 months. The highly developed countries are not doing particularly well.

Asian economies are also showing slight deterioration but doing a little better than the developed countries in general.

Only five of the 18 reporting countries have queue percentile standings in their data back to January 2021 that are above their medians. Readings at or above the 50% mark are at or above the median standing. Canada is showing the weakest manufacturing result on record over this span, in terms of its queue percentile standing which is at 0 in the current month.

I showed the graphic for the Baltic dry goods index in this report rather than statistics on the manufacturing PMI data because the Baltic data, which reflect shipping volume for dry goods - that is excluding things like oil - is weak but it's only in the neighborhood where it's been for some time. There has been a great deal of talk about how tariffs may have impacted trade flows, expected trade flows, shipping, shipping rates, and the like. However, according to the Baltic dry goods index, there isn't much evidence that this is occurring right now and affecting the current data. That may still lie ahead but for now it's not baked in the cake.

250502.jpg

Globally Manufacturing Weakens

Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/3PzXXKrkHcwtOLipohEdnB?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: Tariff Truce, Tenuous Trust

250501F20.jpg

250501G20.jpg

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

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

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

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

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

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

250501H20.jpg

250501I20.jpg

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

Economy in Brief: December 2007

Jump to:

French IP Jumps in October

U.S. Pending Home Sales Ticked Higher, Again

Michigan Consumer Sentiment Down Hard

U.S. Payrolls Increase Light, Unemployment Steady

U.S. Payrolls Increase Light, Unemployment Steady

German Orders JUMP!

U.S. Mortgage Foreclosures: Conventional Up, Subprime Soared

US Flow of Funds: Debt Growth Back Up Due To Financial Sector