Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090911c.jpg" align="left" border="0" height="265" width="353">
Manufacturing prices in the UK rose by 0.5% in August as core
prices rose by 0.4%. Over 12- to 6- to 3-months annualized rates of MFG
prices are accelerating. But over the same periods Core MFG prices look
more as if they are decelerating. 
 

The chart shows the clear upward path of overall price
inflation in the UK. It certainly has a lot to do with the ongoing
rebound in global oil prices. Yet, Yr/Yr overall MFG prices are still
falling. And Yr/Yr core prices are up by just 0.7%. While the charts
dramatize the turnaround in inflation trends don&#8217;t forget to look at
the scales. Inflation is rising from deeply negative numbers to modest
rates of increase even when compounded over short periods. Yr-over-year
headline inflation is still lower. The modest core further cements the
notion of inflation being controlled. For now the pressure is mostly
due to oil prices and the pace of price recovery should not be taken
out of its proper context. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"> UK PPI MFG net output prices</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%m/m</td>
<td colspan="4">%-SAAR</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td> Aug-09</td>
<td> Jul-09</td>
<td> Jun-09</td>
<td> 3-mo</td>
<td> 6-mo</td>
<td> 12-mo</td>
<td> 12-moY-Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol"> MFG</td>
<td>0.5%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>3.2%</td>
<td>2.1%</td>
<td>-0.4%</td>
<td>9.2%</td>
</tr>
<tr class="grey2">
<td class="firstcol"> Core</td>
<td>0.4%</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>0.4%</td>
<td>1.1%</td>
<td>0.7%</td>
<td>5.7%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">Core: ex food beverages,
tobacco &amp; Petroleum</td>
</tr>
</tbody>
</table>
</body></html>

Manufacturing prices in the UK rose by 0.5% in August as core prices rose by 0.4%. Over 12- to 6- to 3-months annualized rates of MFG prices are accelerating. But over the same periods Core MFG prices look more as if they are [...]

UK Producer Prices Showing Steady Accelerating Rise From Lows

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090911b.jpg" align="left" border="0" height="265" width="353">
US export and import prices remained tame in August. Headline
prices shot up as oil prices scored double-digit gains in the month.
For exports the headline rise was spurred by industrial supplies and
the US does export some oil. Agricultural export prices were tame.
Export prices excluding agriculture rose by a sharp 0.8%. Import prices
excluding petroleum rose by 0.4% (after a 0.3% drop in July). The
headline price gains were more ominous-looking with an import prices up
by 2% and export prices gaining 0.7% 
 

If you look up and down the export and import categories you
see tempered price trends with the exception of petroleum prices and
industrial supplies, the category that contains industrial supplies. 
 

The US is not importing any inflation. This is just another
example of how weak the global economies still are. The dollar has been
weaker and oil prices have been rising but inflation is not getting any
traction. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col">Export and Import Prices</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/MO</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">IMPORTS</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>Jun-09</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
</tr>
<tr>
<td class="firstcol">ALL Imports</td>
<td>2.0%</td>
<td>-0.7%</td>
<td>2.7%</td>
<td>17.5%</td>
<td>15.8%</td>
<td>-15.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excl Petrol</td>
<td>0.4%</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>1.1%</td>
<td>-1.1%</td>
<td>-6.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petrol</td>
<td>10.5%</td>
<td>-2.6%</td>
<td>17.2%</td>
<td>152.5%</td>
<td>193.7%</td>
<td>-38.1%</td>
</tr>
<tr>
<td class="firstcol">Foods Feeds and Beverages</td>
<td>1.7%</td>
<td>-1.0%</td>
<td>0.4%</td>
<td>4.7%</td>
<td>4.4%</td>
<td>-6.4%</td>
</tr>
<tr>
<td class="firstcol">Industrial Supplies</td>
<td>6.1%</td>
<td>-1.8%</td>
<td>8.8%</td>
<td>65.6%</td>
<td>62.8%</td>
<td>-31.7%</td>
</tr>
<tr>
<td class="firstcol">Capital goods</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicles &amp; parts</td>
<td>0.2%</td>
<td>0.1%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>0.7%</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Consumer goods excl autos</td>
<td>-0.2%</td>
<td>-0.2%</td>
<td>0.1%</td>
<td>-1.1%</td>
<td>-1.0%</td>
<td>-1.2%</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/MO</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">EXPORTS</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>Jun-09</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
</tr>
<tr>
<td class="firstcol">ALL Exports</td>
<td>0.7%</td>
<td>-0.3%</td>
<td>1.0%</td>
<td>5.6%</td>
<td>3.3%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">Agriculture</td>
<td>0.2%</td>
<td>-4.9%</td>
<td>4.2%</td>
<td>-2.7%</td>
<td>6.1%</td>
<td>-14.1%</td>
</tr>
<tr>
<td class="firstcol">Non Agriculture</td>
<td>0.8%</td>
<td>0.1%</td>
<td>0.6%</td>
<td>6.1%</td>
<td>3.2%</td>
<td>-5.3%</td>
</tr>
<tr>
<td class="firstcol">Food Feeds and Beverages</td>
<td>-0.1%</td>
<td>-5.6%</td>
<td>4.4%</td>
<td>-5.6%</td>
<td>3.5%</td>
<td>-13.0%</td>
</tr>
<tr>
<td class="firstcol">Industrial Supplies</td>
<td>2.3%</td>
<td>0.0%</td>
<td>2.0%</td>
<td>18.3%</td>
<td>8.4%</td>
<td>-17.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.1%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>2.0%</td>
<td>2.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicles &amp; Parts</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>-0.7%</td>
<td>-0.4%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">Consumer goods excl autos</td>
<td>0.3%</td>
<td>0.4%</td>
<td>0.4%</td>
<td>4.1%</td>
<td>-0.5%</td>
<td>0.0%</td>
</tr>
</tbody>
</table>
</body></html>

US export and import prices remained tame in August. Headline prices shot up as oil prices scored double-digit gains in the month. For exports the headline rise was spurred by industrial supplies and the US does export some oil. [...]

Export and Import Prices Pop But Ex-Oil Import Prices Barely Budge

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090911a.jpg" align="left" border="0" height="265" width="353">
Consumer sentiment rose sharply to 70.2 in August in the U of
M consumer sentiment preliminary report. The month&#8217;s rise in sentiment
was the 42nd largest monthly rise out of the last 380 monthly changes.
It was the fourth largest monthly rise in the index in this
recession/recovery period. The current index rose sharply making the
second highest jump in this cycle. Expectations rose by 4.2 points
marking a solid rise that is the sixth largest gain for expectations in
this cycle. The move in August preliminary report is led by the
substantial gain in the current situation. 
 

Still in terms of cycle levels the current situation is weak
standing at the 38Th percentile of its recession cycle range, while
expectations are just off their cycle peak reading of 70.8 (June 2009). 
 

Both expectations and the current situation are some 30% shy
of their respective past cycle peaks. Still the day&#8217;s report represents
a sharp gain from the cycle lows and builds some well-needed momentum
into this report after a period of being mired below peak and sinking. 
 

The consumer remains the key to this economic recovery since
there will be no investment of note until consumer spending picks up.
Exports which are doing well are simply too small to lead recovery.
Dropping imports are fools gold for growth since they only drop if
domestic demand is weak and that is the road to perdition not to crisis
contrition. 
 
 

Near term we look, not inventory building, but to less cutting
to boost GDP growth. But that will not spur growth unless final sales
pick up requiring more restocking and spurring new rounds of hiring.
The consumer sentiment report may not dictate consumer spending
month-by-month. But the broad sweep of consumer moods do set the stage
for and reflect true changes in consumer spending habits. 
 

In the month consumers have seen their personal finance
situation improve and the buying conditions are said to be the best in
three months and better than anything 15 months before that. It is an
important rise in this assessment. Importantly, expected business
conditions in the next 12 months are the best in 24 months. 
 

This is a good solid report. As the back-to-school season
kicks in, the month of September is a key one for assessing how well
the economy is mending. So far it looks good. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr class="odd">
<th colspan="4" scope="col">U of M
Consumer Sentiment-Prelim</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>Sentiment</td>
<td>Current</td>
<td>Expectations</td>
</tr>
<tr class="grey3">
<td class="firstcol">Prelim</td>
<td>70.2</td>
<td>71.8</td>
<td>69.2</td>
</tr>
<tr class="grey3">
<td class="firstcol">Last Month</td>
<td>65.7</td>
<td>66.6</td>
<td>65.0</td>
</tr>
<tr class="grey2">
<td class="firstcol">Mo/Mo %</td>
<td>6.8%</td>
<td>7.8%</td>
<td>6.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">2-Mos</td>
<td>6.4%</td>
<td>1.8%</td>
<td>9.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Yr/Yr%</td>
<td>-0.1%</td>
<td>-4.3%</td>
<td>3.0%</td>
</tr>
<tr class="grey1">
<td colspan="4" class="firstcol">In
Recession: Max,Min, Avg
&amp; Percentile</td>
</tr>
<tr class="grey3">
<td class="firstcol">Max</td>
<td>78.4</td>
<td>94.4</td>
<td>69.4</td>
</tr>
<tr class="grey3">
<td class="firstcol">Min</td>
<td>55.3</td>
<td>57.5</td>
<td>49.2</td>
</tr>
<tr class="grey3">
<td class="firstcol">Average</td>
<td>64.6</td>
<td>72.2</td>
<td>59.7</td>
</tr>
<tr class="grey4">
<td class="firstcol">Percentile</td>
<td>64.5%</td>
<td>38.8%</td>
<td>99.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Cycle peak</td>
<td>103.8</td>
<td>113.5</td>
<td>100.1</td>
</tr>
<tr class="grey3">
<td class="firstcol">% of Peak</td>
<td>67.6</td>
<td>63.3</td>
<td>69.1</td>
</tr>
<tr class="grey1">
<td colspan="4" class="firstcol">U
of M Consumer
Sentiment-Prelim</td>
</tr>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>Sentiment</td>
<td>Current</td>
<td>Expectations</td>
</tr>
<tr class="grey3">
<td class="firstcol">Max</td>
<td>112.0</td>
<td>121.1</td>
<td>108.6</td>
</tr>
<tr class="grey3">
<td class="firstcol">Min</td>
<td>51.7</td>
<td>57.5</td>
<td>44.2</td>
</tr>
<tr class="grey3">
<td class="firstcol">Average</td>
<td>86.2</td>
<td>98.4</td>
<td>78.8</td>
</tr>
<tr class="grey4">
<td class="firstcol">Percentile</td>
<td>30.7%</td>
<td>22.5%</td>
<td>38.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Rank %</td>
<td>14.6%</td>
<td>4.2%</td>
<td>23.7%</td>
</tr>
<tr class="grey1">
<td colspan="4" class="firstcol">Since January 1970</td>
</tr>
</tbody>
</table>
</body></html>

Consumer sentiment rose sharply to 70.2 in August in the U of M consumer sentiment preliminary report. The month’s rise in sentiment was the 42nd largest monthly rise out of the last 380 monthly changes. It was the fourth largest [...]

University of Michigan Sentiment Makes Surprising Jump

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090911a.jpg" align="left" border="0" height="265" width="353">
Consumer sentiment rose sharply to 70.2 in August in the U of
M consumer sentiment preliminary report. The month&#8217;s rise in sentiment
was the 42nd largest monthly rise out of the last 380 monthly changes.
It was the fourth largest monthly rise in the index in this
recession/recovery period. The current index rose sharply making the
second highest jump in this cycle. Expectations rose by 4.2 points
marking a solid rise that is the sixth largest gain for expectations in
this cycle. The move in August preliminary report is led by the
substantial gain in the current situation. 
 

Still in terms of cycle levels the current situation is weak
standing at the 38Th percentile of its recession cycle range, while
expectations are just off their cycle peak reading of 70.8 (June 2009). 
 

Both expectations and the current situation are some 30% shy
of their respective past cycle peaks. Still the day&#8217;s report represents
a sharp gain from the cycle lows and builds some well-needed momentum
into this report after a period of being mired below peak and sinking. 
 

The consumer remains the key to this economic recovery since
there will be no investment of note until consumer spending picks up.
Exports which are doing well are simply too small to lead recovery.
Dropping imports are fools gold for growth since they only drop if
domestic demand is weak and that is the road to perdition not to crisis
contrition. 
 
 

Near term we look, not inventory building, but to less cutting
to boost GDP growth. But that will not spur growth unless final sales
pick up requiring more restocking and spurring new rounds of hiring.
The consumer sentiment report may not dictate consumer spending
month-by-month. But the broad sweep of consumer moods do set the stage
for and reflect true changes in consumer spending habits. 
 

In the month consumers have seen their personal finance
situation improve and the buying conditions are said to be the best in
three months and better than anything 15 months before that. It is an
important rise in this assessment. Importantly, expected business
conditions in the next 12 months are the best in 24 months. 
 

This is a good solid report. As the back-to-school season
kicks in, the month of September is a key one for assessing how well
the economy is mending. So far it looks good. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr class="odd">
<th colspan="4" scope="col">U of M
Consumer Sentiment-Prelim</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>Sentiment</td>
<td>Current</td>
<td>Expectations</td>
</tr>
<tr class="grey3">
<td class="firstcol">Prelim</td>
<td>70.2</td>
<td>71.8</td>
<td>69.2</td>
</tr>
<tr class="grey3">
<td class="firstcol">Last Month</td>
<td>65.7</td>
<td>66.6</td>
<td>65.0</td>
</tr>
<tr class="grey2">
<td class="firstcol">Mo/Mo %</td>
<td>6.8%</td>
<td>7.8%</td>
<td>6.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">2-Mos</td>
<td>6.4%</td>
<td>1.8%</td>
<td>9.5%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Yr/Yr%</td>
<td>-0.1%</td>
<td>-4.3%</td>
<td>3.0%</td>
</tr>
<tr class="grey1">
<td colspan="4" class="firstcol">In
Recession: Max,Min, Avg
&amp; Percentile</td>
</tr>
<tr class="grey3">
<td class="firstcol">Max</td>
<td>78.4</td>
<td>94.4</td>
<td>69.4</td>
</tr>
<tr class="grey3">
<td class="firstcol">Min</td>
<td>55.3</td>
<td>57.5</td>
<td>49.2</td>
</tr>
<tr class="grey3">
<td class="firstcol">Average</td>
<td>64.6</td>
<td>72.2</td>
<td>59.7</td>
</tr>
<tr class="grey4">
<td class="firstcol">Percentile</td>
<td>64.5%</td>
<td>38.8%</td>
<td>99.0%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Cycle peak</td>
<td>103.8</td>
<td>113.5</td>
<td>100.1</td>
</tr>
<tr class="grey3">
<td class="firstcol">% of Peak</td>
<td>67.6</td>
<td>63.3</td>
<td>69.1</td>
</tr>
<tr class="grey1">
<td colspan="4" class="firstcol">U
of M Consumer
Sentiment-Prelim</td>
</tr>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>Sentiment</td>
<td>Current</td>
<td>Expectations</td>
</tr>
<tr class="grey3">
<td class="firstcol">Max</td>
<td>112.0</td>
<td>121.1</td>
<td>108.6</td>
</tr>
<tr class="grey3">
<td class="firstcol">Min</td>
<td>51.7</td>
<td>57.5</td>
<td>44.2</td>
</tr>
<tr class="grey3">
<td class="firstcol">Average</td>
<td>86.2</td>
<td>98.4</td>
<td>78.8</td>
</tr>
<tr class="grey4">
<td class="firstcol">Percentile</td>
<td>30.7%</td>
<td>22.5%</td>
<td>38.8%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Rank %</td>
<td>14.6%</td>
<td>4.2%</td>
<td>23.7%</td>
</tr>
<tr class="grey1">
<td colspan="4" class="firstcol">Since
January 1970</td>
</tr>
</tbody>
</table>
 Export and Import Prices Pop But
Ex-Oil Import Prices Barely Budge 
by <a href="/comment/Brusca.html">Robert
Brusca</a> September 11, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090911b.jpg" align="left" border="0" height="265" width="353">
US export and import prices remained tame in August. Headline
prices shot up as oil prices scored double-digit gains in the month.
For exports the headline rise was spurred by industrial supplies and
the US does export some oil. Agricultural export prices were tame.
Export prices excluding agriculture rose by a sharp 0.8%. Import prices
excluding petroleum rose by 0.4% (after a 0.3% drop in July). The
headline price gains were more ominous-looking with an import prices up
by 2% and export prices gaining 0.7% 
 

If you look up and down the export and import categories you
see tempered price trends with the exception of petroleum prices and
industrial supplies, the category that contains industrial supplies. 
 

The US is not importing any inflation. This is just another
example of how weak the global economies still are. The dollar has been
weaker and oil prices have been rising but inflation is not getting any
traction. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Export and
Import Prices</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/MO</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">IMPORTS</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>Jun-09</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
</tr>
<tr>
<td class="firstcol">ALL Imports</td>
<td>2.0%</td>
<td>-0.7%</td>
<td>2.7%</td>
<td>17.5%</td>
<td>15.8%</td>
<td>-15.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excl Petrol</td>
<td>0.4%</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>1.1%</td>
<td>-1.1%</td>
<td>-6.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petrol</td>
<td>10.5%</td>
<td>-2.6%</td>
<td>17.2%</td>
<td>152.5%</td>
<td>193.7%</td>
<td>-38.1%</td>
</tr>
<tr>
<td class="firstcol">Foods Feeds and Beverages</td>
<td>1.7%</td>
<td>-1.0%</td>
<td>0.4%</td>
<td>4.7%</td>
<td>4.4%</td>
<td>-6.4%</td>
</tr>
<tr>
<td class="firstcol">Industrial Supplies</td>
<td>6.1%</td>
<td>-1.8%</td>
<td>8.8%</td>
<td>65.6%</td>
<td>62.8%</td>
<td>-31.7%</td>
</tr>
<tr>
<td class="firstcol">Capital goods</td>
<td>0.1%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>-1.5%</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicles &amp; parts</td>
<td>0.2%</td>
<td>0.1%</td>
<td>0.1%</td>
<td>1.5%</td>
<td>0.7%</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Consumer goods excl autos</td>
<td>-0.2%</td>
<td>-0.2%</td>
<td>0.1%</td>
<td>-1.1%</td>
<td>-1.0%</td>
<td>-1.2%</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/MO</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">EXPORTS</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>Jun-09</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
</tr>
<tr>
<td class="firstcol">ALL Exports</td>
<td>0.7%</td>
<td>-0.3%</td>
<td>1.0%</td>
<td>5.6%</td>
<td>3.3%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">Agriculture</td>
<td>0.2%</td>
<td>-4.9%</td>
<td>4.2%</td>
<td>-2.7%</td>
<td>6.1%</td>
<td>-14.1%</td>
</tr>
<tr>
<td class="firstcol">Non Agriculture</td>
<td>0.8%</td>
<td>0.1%</td>
<td>0.6%</td>
<td>6.1%</td>
<td>3.2%</td>
<td>-5.3%</td>
</tr>
<tr>
<td class="firstcol">Food Feeds and Beverages</td>
<td>-0.1%</td>
<td>-5.6%</td>
<td>4.4%</td>
<td>-5.6%</td>
<td>3.5%</td>
<td>-13.0%</td>
</tr>
<tr>
<td class="firstcol">Industrial Supplies</td>
<td>2.3%</td>
<td>0.0%</td>
<td>2.0%</td>
<td>18.3%</td>
<td>8.4%</td>
<td>-17.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>0.1%</td>
<td>0.3%</td>
<td>0.1%</td>
<td>2.0%</td>
<td>2.4%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicles &amp; Parts</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>-0.1%</td>
<td>-0.7%</td>
<td>-0.4%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">Consumer goods excl autos</td>
<td>0.3%</td>
<td>0.4%</td>
<td>0.4%</td>
<td>4.1%</td>
<td>-0.5%</td>
<td>0.0%</td>
</tr>
</tbody>
</table>
 UK Producer Prices Showing Steady
Accelerating Rise From Lows 
by <a href="/comment/Brusca.html">Robert
Brusca</a> September 11, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090911c.jpg" align="left" border="0" height="265" width="353">
Manufacturing prices in the UK rose by 0.5% in August as core
prices rose by 0.4%. Over 12- to 6- to 3-months annualized rates of MFG
prices are accelerating. But over the same periods Core MFG prices look
more as if they are decelerating. 
 

The chart shows the clear upward path of overall price
inflation in the UK. It certainly has a lot to do with the ongoing
rebound in global oil prices. Yet, Yr/Yr overall MFG prices are still
falling. And Yr/Yr core prices are up by just 0.7%. While the charts
dramatize the turnaround in inflation trends don&#8217;t forget to look at
the scales. Inflation is rising from deeply negative numbers to modest
rates of increase even when compounded over short periods. Yr-over-year
headline inflation is still lower. The modest core further cements the
notion of inflation being controlled. For now the pressure is mostly
due to oil prices and the pace of price recovery should not be taken
out of its proper context. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> UK PPI
MFG net output prices</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%m/m</td>
<td colspan="4">%-SAAR</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td> Aug-09</td>
<td> Jul-09</td>
<td> Jun-09</td>
<td> 3-mo</td>
<td> 6-mo</td>
<td> 12-mo</td>
<td> 12-moY-Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol"> MFG</td>
<td>0.5%</td>
<td>0.2%</td>
<td>0.1%</td>
<td>3.2%</td>
<td>2.1%</td>
<td>-0.4%</td>
<td>9.2%</td>
</tr>
<tr class="grey2">
<td class="firstcol"> Core</td>
<td>0.4%</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>0.4%</td>
<td>1.1%</td>
<td>0.7%</td>
<td>5.7%</td>
</tr>
<tr class="grey1">
<td colspan="8" class="firstcol">Core:
ex food beverages,
tobacco &amp; Petroleum</td>
</tr>
</tbody>
</table>
</body></html>

University of Michigan SentimentMakes Surprising Jump

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910d.jpg" width="353">
Improvement in the U.S. economy probably is behind the July deterioration in the international trade deficit to $32.0B versus a little-revised June deficit of $27.5B. Consensus expectations had been for a deficit of $27.0B. Nonoil imports reversed six months of decline with a 6.1% m/m gain, though that still left them down by one-quarter from the year-ago level. A 3.6% rise in oil imports reflected higher prices. Real petroleum imports slipped m/m and are off 10.8% y/y with the recession. For the third straight month, U.S. exports posted a strong gain. The competitive foreign exchange value of the dollar helped exports to rise by 2.2%, about as they did during May and June. The gains pared the YTD drop to 4.0%.
Adjusted for price inflation overall and for higher oil prices specifically, the trade deficit in goods deepened somewhat during July to $38.8B after having fallen to the lowest level since June 1999. It was down from the peak of $47.6B last July. Real non-auto consumer goods imports jumped 5.3% m/m but remained off 12.5% from last year. Real automotive vehicles &amp; parts imports jumped 21.3% and pared the y/y drop to 33.8%. Non-auto capital goods imports rose 4.3% but that still left them off one-quarter from last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910e.jpg" width="353">
The rise in petroleum imports was driven by higher crude oil prices. Prices rose to a July average of $62.48 per barrel versus the February low of $39.22. The recession and the rise in prices, however, prompted a decline in the volume of petroleum imports. Despite a June gain they have fallen roughly ten-percent since December.
Reflecting the competitive value of the dollar, real merchandise exports jumped 3.9% after two months of lesser increase. The chained dollar value of auto exports led the gain with a 24.7% increase (-40.9% y/y). Non-auto consumer goods exports rose a lesser 2.7% (-14.6% y/y) while real capital goods exports gained 2.2% (-20.0 y/y) for the second month of strong increase.
The international trade data can be found in Haver&#39;s USECON database. Detailed figures are available in the USINT database.

<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/@EE/@EE01/@EE01.HTM">Foreign Trade&nbsp;</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">U.S. Trade Deficit</td>
<td>$32.0B</td>
<td>$27.5B</td>
<td>$64.9B (7/08)</td>
<td>$695.9</td>
<td>$701.4</td>
<td>$760.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports - Goods &amp; Services</td>
<td>2.2%</td>
<td>2.1%</td>
<td>-22.4%</td>
<td>11.2%</td>
<td>13.2%</td>
<td>13.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports - Goods &amp; Services</td>
<td>4.7%</td>
<td>2.5%</td>
<td>-30.4%</td>
<td>7.6</td>
<td>6.0%</td>
<td>10.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>3.6%</td>
<td>24.3%</td>
<td>-55.0%</td>
<td>37.0%</td>
<td>9.4%</td>
<td>20.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>6.1%</td>
<td>-1.1%</td>
<td>-25.7%</td>
<td>1.5%</td>
<td>4.8%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
</body>
</html>

Improvement in the U.S. economy probably is behind the July deterioration in the international trade deficit to $32.0B versus a little-revised June deficit of $27.5B. Consensus expectations had been for a deficit of $27.0B. Nonoil [...]

U.S. Trade Deficit Deepens With A Jump In Imports

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910c.jpg" align="left" border="0" height="265" width="353">
French industrial production rose by a thin margin of 0.1% in
June, less than expected. Auto production contracted after a strong
spurt in earlier months. Still, France has showed one of the stronger
rebounds in EMU IP. It did not sink as far as German IP but it has
rebounded just as much. 
 

In France consumer durables output fell by a sharp 2.6% in
July. For nondurables consumer output was up by 1.1%. Capital goods
output took a set back despite what has been a solid run of growth for
that sector. Intermediate goods output rose strongly in July. 
 

Trends in French IP are up strongly and across the board with
the exception of consumer durables. 
 

In the current quarter output is rising at a 7.7% annual rate
with all main sectors doing better than that except, again, consumer
durables which is contracting in the new quarter and weighing down the
headline. On balance the rebound is robust and seems well entrenched.
The lack of progress in consumer durable goods is however a fly in the
recovery ointment. It suggests that consumers are able to be coaxed out
to buy some things but that they do not have the fundamental confidence
to take on the bigger-ticket items. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> French IP Excluding Construction </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Jul-09</td>
<td>Jun-09</td>
<td>May-09</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter -To-Date</td>
</tr>
<tr>
<td class="firstcol">IP total</td>
<td>0.1%</td>
<td>0.2%</td>
<td>3.0%</td>
<td>13.9%</td>
<td>-0.7%</td>
<td>-13.0%</td>
<td>7.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Dur</td>
<td>-2.6%</td>
<td>-2.9%</td>
<td>0.8%</td>
<td>-17.8%</td>
<td>-20.9%</td>
<td>-21.5%</td>
<td>-23.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Ndur</td>
<td>1.1%</td>
<td>0.3%</td>
<td>0.0%</td>
<td>5.9%</td>
<td>-3.4%</td>
<td>-2.3%</td>
<td>11.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Capital</td>
<td>-0.2%</td>
<td>1.1%</td>
<td>4.0%</td>
<td>21.0%</td>
<td>7.4%</td>
<td>-15.0%</td>
<td>11.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Intermed</td>
<td>1.6%</td>
<td>-0.1%</td>
<td>3.7%</td>
<td>22.7%</td>
<td>4.4%</td>
<td>-19.6%</td>
<td>17.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Auto</td>
<td>-1.9%</td>
<td>14.3%</td>
<td>12.5%</td>
<td>154.2%</td>
<td>23.2%</td>
<td>-29.8%</td>
<td>87.2%</td>
</tr>
</tbody>
</table>
</body></html>

French industrial production rose by a thin margin of 0.1% in June, less than expected. Auto production contracted after a strong spurt in earlier months. Still, France has showed one of the stronger rebounds in EMU IP. It did not [...]

IP In France Edges Higher In July

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<img align="left" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910a.jpg">
Initial claims for jobless insurance have been suggesting improvement in the labor market, however grudging. For last week, the Labor Department indicated that claims fell 26,000 to 550,000 which was their lowest level since early-July and down from the March weekly peak of 674,000. The latest decline about matched expectations.
Continuing claims for unemployment insurance during the latest week fell and more than reversed all of the prior period&#39;s increase. The decline was to the lowest level since early-April and claims were down by 10% from the late-June high, a decline which probably owes partially to the exhaustion of benefits. Continuing claims provide an indication of workers&#39; ability to find employment. The level of 6,088,000 claims is up sharply from the year-ago level. The four-week average of continuing claims fell modestly to 6,182,500. The series dates back to 1966.
Extended benefits for unemployment insurance slipped for the fourth week in the last five. Nevertheless, the trend in benefits has been sharply upward as worker rehiring continues weak. Through mid-August extended benefits averaged 453,831 versus 416,630 during July.<img align="right" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910b.jpg">
The insured rate of unemployment dipped slightly to 4.6% and was near the lowest level since mid-April. The rate reached a high of 5.2% during late-June. During the last ten years, there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics.
The highest insured unemployment rates in the week ending Aug. 22 were in Puerto Rico (7.0 percent), Pennsylvania (5.9), Oregon (5.9), Michigan (5.7), Nevada (5.7), California (5.3), Wisconsin (5.3), Connecticut (5.2), New Jersey (5.1), North Carolina (4.8), Rhode Island (4.8), and South Carolina (4.8).
The unemployment insurance claims data is available in Haver&#39;s WEEKLY database and the state data is in the REGIONW database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">09/05/09</th>
<th scope="col">08/29/09</th>
<th scope="col">08/22/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>550</td>
<td>576</td>
<td>574</td>
<td>23.0%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,088</td>
<td>6,247</td>
<td>71.5%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.6</td>
<td>4.7</td>
<td>2.7 (08/2008)</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body>
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Initial claims for jobless insurance have been suggesting improvement in the labor market, however grudging. For last week, the Labor Department indicated that claims fell 26,000 to 550,000 which was their lowest level since early- [...]

U.S. Weekly Claims For Jobless Insurance Near Cycle Low

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910a.jpg" align="left" border="0">
Initial claims for jobless insurance have been suggesting
improvement in the labor market, however grudging. For last week, the
Labor Department indicated that claims fell 26,000 to 550,000 which was
their lowest level since early-July and down from the March weekly peak
of 674,000. The latest decline about matched expectations.
Continuing claims for unemployment insurance during the latest
week fell and more than reversed all of the prior period's increase.
The decline was to the lowest level since early-April and claims were
down by 10% from the late-June high, a decline which probably owes
partially to the exhaustion of benefits. Continuing claims provide an
indication of workers' ability to find employment. The level of
6,088,000 claims is up sharply from the year-ago level. The four-week
average of continuing claims fell modestly to 6,182,500. The series
dates back to 1966.
Extended benefits for unemployment insurance slipped for the
fourth week in the last five. Nevertheless, the trend in benefits has
been sharply upward as worker rehiring continues weak. Through
mid-August extended benefits averaged 453,831 versus 416,630 during
July.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910b.jpg" align="right" border="0">
The insured rate of unemployment dipped slightly to 4.6% and
was near the lowest level since mid-April. The rate reached a high of
5.2% during late-June. During the last ten years, there has been a 93%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.
The highest insured unemployment rates in the week ending Aug.
22 were in Puerto Rico (7.0 percent), Pennsylvania (5.9), Oregon (5.9),
Michigan (5.7), Nevada (5.7), California (5.3), Wisconsin (5.3),
Connecticut (5.2), New Jersey (5.1), North Carolina (4.8), Rhode Island
(4.8), and South Carolina (4.8).
The unemployment insurance claims data is available in Haver's
WEEKLY database and the state data is in the REGIONW
database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">09/05/09</th>
<th scope="col">08/29/09</th>
<th scope="col">08/22/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>550</td>
<td>576</td>
<td>574</td>
<td>23.0%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,088</td>
<td>6,247</td>
<td>71.5%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.6</td>
<td>4.7</td>
<td>2.7 (08/2008)</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
 IP In France Edges Higher In July 
by <a href="/comment/Brusca.html">Robert
Brusca&nbsp;</a> September 10, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910c.jpg" align="left" border="0" height="265" width="353">
French industrial production rose by a thin margin of 0.1% in
June, less than expected. Auto production contracted after a strong
spurt in earlier months. Still, France has showed one of the stronger
rebounds in EMU IP. It did not sink as far as German IP but it has
rebounded just as much. 
 

In France consumer durables output fell by a sharp 2.6% in
July. For nondurables consumer output was up by 1.1%. Capital goods
output took a set back despite what has been a solid run of growth for
that sector. Intermediate goods output rose strongly in July. 
 

Trends in French IP are up strongly and across the board with
the exception of consumer durables. 
 

In the current quarter output is rising at a 7.7% annual rate
with all main sectors doing better than that except, again, consumer
durables which is contracting in the new quarter and weighing down the
headline. On balance the rebound is robust and seems well entrenched.
The lack of progress in consumer durable goods is however a fly in the
recovery ointment. It suggests that consumers are able to be coaxed out
to buy some things but that they do not have the fundamental confidence
to take on the bigger-ticket items. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> French IP
Excluding Construction </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Jul-09</td>
<td>Jun-09</td>
<td>May-09</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter 
-To-Date</td>
</tr>
<tr>
<td class="firstcol">IP total</td>
<td>0.1%</td>
<td>0.2%</td>
<td>3.0%</td>
<td>13.9%</td>
<td>-0.7%</td>
<td>-13.0%</td>
<td>7.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Dur</td>
<td>-2.6%</td>
<td>-2.9%</td>
<td>0.8%</td>
<td>-17.8%</td>
<td>-20.9%</td>
<td>-21.5%</td>
<td>-23.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Ndur</td>
<td>1.1%</td>
<td>0.3%</td>
<td>0.0%</td>
<td>5.9%</td>
<td>-3.4%</td>
<td>-2.3%</td>
<td>11.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Capital</td>
<td>-0.2%</td>
<td>1.1%</td>
<td>4.0%</td>
<td>21.0%</td>
<td>7.4%</td>
<td>-15.0%</td>
<td>11.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Intermed</td>
<td>1.6%</td>
<td>-0.1%</td>
<td>3.7%</td>
<td>22.7%</td>
<td>4.4%</td>
<td>-19.6%</td>
<td>17.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Auto</td>
<td>-1.9%</td>
<td>14.3%</td>
<td>12.5%</td>
<td>154.2%</td>
<td>23.2%</td>
<td>-29.8%</td>
<td>87.2%</td>
</tr>
</tbody>
</table>
 U.S. Trade Deficit Deepens With A
Jump In Imports 
by <a href="/comment/Moeller.html">Tom
Moeller</a> September 10, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910d.jpg" align="left" border="0" height="265" width="353">
Improvement in the U.S. economy probably is behind the July
deterioration in the international trade deficit to $32.0B versus a
little-revised June deficit of $27.5B. Consensus expectations had been
for a deficit of $27.0B. Nonoil imports reversed six months of decline
with a 6.1% m/m gain, though that still left them down by one-quarter
from the year-ago level. A 3.6% rise in oil imports reflected higher
prices. Real petroleum imports slipped m/m and are off 10.8% y/y with
the recession. For the third straight month, U.S. exports posted a
strong gain. The competitive foreign exchange value of the dollar
helped exports to rise by 2.2%, about as they did during May and June.
The gains pared the YTD drop to 4.0%.
Adjusted for price inflation overall and for higher oil prices
specifically, the trade deficit in goods deepened somewhat during July
to $38.8B after having fallen to the lowest level since June 1999. It
was down from the peak of $47.6B last July. Real non-auto consumer
goods imports jumped 5.3% m/m but remained off 12.5% from last year.
Real automotive vehicles &amp; parts imports jumped 21.3% and pared
the y/y drop to 33.8%. Non-auto capital goods imports rose 4.3% but
that still left them off one-quarter from last year.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090910e.jpg" align="right" border="0" height="265" width="353">
The rise in petroleum imports was driven by higher crude oil
prices. Prices rose to a July average of $62.48 per barrel versus the
February low of $39.22. The recession and the rise in prices, however,
prompted a decline in the volume of petroleum imports. Despite a June
gain they have fallen roughly ten-percent since December.
Reflecting the competitive value of the dollar, real
merchandise exports jumped 3.9% after two months of lesser increase.
The chained dollar value of auto exports led the gain with a 24.7%
increase (-40.9% y/y). Non-auto consumer goods exports rose a lesser
2.7% (-14.6% y/y) while real capital goods exports gained 2.2% (-20.0
y/y) for the second month of strong increase.
The international trade data can be found in Haver's USECON
database. Detailed figures are available in the USINT
database.

<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/@EE/@EE01/@EE01.HTM">Foreign
Trade&nbsp;</a></th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">U.S. Trade Deficit</td>
<td>$32.0B</td>
<td>$27.5B</td>
<td>$64.9B (7/08)</td>
<td>$695.9</td>
<td>$701.4</td>
<td>$760.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports - Goods
&amp; Services</td>
<td>2.2%</td>
<td>2.1%</td>
<td>-22.4%</td>
<td>11.2%</td>
<td>13.2%</td>
<td>13.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports - Goods
&amp; Services</td>
<td>4.7%</td>
<td>2.5%</td>
<td>-30.4%</td>
<td>7.6</td>
<td>6.0%</td>
<td>10.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>3.6%</td>
<td>24.3%</td>
<td>-55.0%</td>
<td>37.0%</td>
<td>9.4%</td>
<td>20.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>6.1%</td>
<td>-1.1%</td>
<td>-25.7%</td>
<td>1.5%</td>
<td>4.8%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Weekly Claims For JoblessInsurance Near Cycle Low

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

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

Even with expected tariff-induced increases in inflation, BCFF forecasters look for a more aggressive round of monetary easing

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

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Mortgage applications fell 1.4% (+22.7% y/y) in the week ending August 15 after rising 10.9% in the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for purchase loans edged 0.1% higher (22.7% y/y) last week, following a 1.4% gain in the prior week. Applications to refinance a home loan fell 3.1% (+22.8% y/y) last week, following a 23.0% rise in the week of August 8.

The effective interest rate on a 30-year fixed-rate loan held steady at 6.86% in the week ending August 15 after falling from 6.94% in the first week of August. It was the lowest rate since the first week of March, down from a high of 7.28% in the second week of January. The rate on 15-year fixed-rate mortgages rose to 6.13% in the latest week from 6.09% in the week of August 8. Conversely, the rate on 30-year Jumbo loans decreased to 6.82% last week from 6.86% one week earlier. The rate on a 5-year ARM rose to 6.24% in the week of August 15 and reversed the prior week’s decline to 6.05%.

The share of applications for refinancing an existing loan eased to 46.1% of total applications in the week ending August 15 after rising to 46.5% in the prior week. The share hit a low of 34.6% in the fourth week of May. The adjustable-rate mortgage (ARM) share of activity declined to 8.60% in the latest week after rising to 9.60% in the week of August 8.

The average size of a mortgage loan fell 2.7% (+4.1% y/y) to $387,800 in the week of August 15, following a 4.5% rise in the prior week. The average size of a purchase loan edged 0.5% higher (0.6% y/y) to $429,000 in the latest week after falling 1.2% in the week ending August 8. The average size of a loan to refinance a mortgage fell 7.3% (+9.5% y/y) to $339,800 last week, after rising 18.3% to $366,400 in the prior week. It was increased from $277,900 in the last week of May.

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.

**Tracking Labor Market Stress** from the Federal Reserve Bank of San Francisco is available [here](https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/08/tracking-labor-market-stress/).

- Purchase applications edge higher while loan refinancing declines.
- Effective fixed-interest rate on 30-year loans remains at four-month low.
- Average loan size declines.

U.S. Mortgage Applications Decline Last Week as Interest Rates Steady

250819F1.jpg

250819G1.jpg

Total housing starts increased 5.2% (12.9% y/y) in July to 1.428 million (SAAR) after rising 5.9% in June to 1.358 million, revised from 1.321 million, and falling 8.3% to 1.282 in May, revised from 1.263 million, according to the U.S. Census Bureau. Total starts in July remained 22.5% below their peak of 1.820 million units reached in April 2022. The Action Economics Forecast Survey expected 1.30 million starts in July.

Single-family starts in July rose 2.8% (7.8% y/y) to 939,000 after falling 3.8% in June to 913,000, revised from 883,000, and edging 0.1% higher in May to 949,000, revised from 926,000. Multi-family starts surged 9.9% (24.1% y/y) in July to 489,000 after strengthening 33.6% in June to 445,000, revised from 438,000, and declining 26.0% to a little-revised 333,000 units in May.

Housing starts in the Midwest surged 33.3% (40.8% y/y) in July to 252,000 after rising 3.3% in June. Adding to this increase, starts in the South rose 19.2% (29.5% y/y) to 833,000 after holding steady in June. Offsetting these gains, starts in the West declined 27.5% (-14.4% y/y) to 232,000 after rising 8.1% in June. Housing starts in the Northeast declined 26.0% (-35.5% y/y) to 111,000 after increasing 44.2% in June.

Building permits declined 2.8% (-5.7% y/y) last month to 1.354 million after easing slightly in June. It was the fourth consecutive monthly decline. Single-family permits rose 0.5% (-7.9% y/y) in July to 870,000 after weakening for four straight months. Multi-family permits fell 8.2% (-1.4% y/y) to 484,000 after rising 6.5% in June. Building permits in the Northeast rose 25.2% (-7.9% y/y), and they edged up 0.5% (12.9% y/y) in the Midwest. In the South, building permits declined 4.6% (-6.1% y/y) while in the West, building permits weakened 10.1% (-15.2% y/y).

The housing starts and building permits figures can be found in Haver’s **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

250819H1.jpg

250819I1.jpg

- Increase brings starts to five-month high.
- Multi-family starts surge while single-family starts rise moderately.
- Building permits decline is led by multi-family.

U.S. Housing Starts Strengthen Unexpectedly in July

Winnie Tapasanun

250819A35.jpg

250819B35.jpg

Online retail sales, formally known as retail e-commerce sales, rose a seasonally adjusted 1.4% q/q in Q2'25 to $304.2 billion following a 0.1% downtick in Q1’25 (0.0% initially) and a 1.7% increase in Q4’24 (unrevised), according to the U.S. Census Bureau. The Q2’25 reading was the 14th q/q gain in 15 quarters. The year-on-year rate of increase decelerated to 5.3% in Q2'25, the lowest since Q2'22, from 6.0% Q1’25. The latest y/y number was lower than 7.1% in Q2'24; thus, having remained significantly below a high of 45.3% in Q1'21 and a peak of 53.5% in Q2’20.

The Q2'25 rise in retail e-commerce sales compared to a 0.4% q/q gain (3.9% y/y) to $1,865.4 billion in total retail sales during the same period. This overall measure of retail sales excludes food services and restaurant sales. Retail e-commerce sales accounted for 16.3% of total retail sales in Q2'25 following 16.1% in Q1'25, registering the highest rate since Q2'20; the percentage was 16.1% in 2024, 15.3% in 2023, and 7.1% in 2015.

Details of the retail e-commerce sales data by sector are not seasonally adjusted. Sales of nonstore retailers, which accounted for 58.5% of total e-commerce sales, rose 5.3% (1.8% y/y) in Q2'25, the fourth q/q rise in five quarters, following a 20.7% decrease in Q1'25. Building materials & garden equipment sales recovered 34.7% (9.9% y/y), the largest q/q gain since Q2'20, reversing a 16.2% drop. Health & personal care sales rebounded 12.8% (1.7% y/y), the second q/q increase in three quarters, after having plummeted 40.9%.

Clothing accessory store sales rose 9.2% (-1.3% y/y) in Q2'25 after a 38.3% plunge in Q1'25. General merchandise store sales increased 8.4% (17.2% y/y) following a 20.9% drop. Sales of furniture & home furnishings rose 5.1% (4.4% y/y) after a 15.6% fall. Sporting goods, hobby, musical instrument & book sales grew 4.3% (6.7% y/y) following a 31.3% slump. These series registered the fourth q/q gain in five quarters.

Sales of motor vehicles & parts advanced 8.3% (15.9% y/y) in Q2'25, the largest of six straight q/q increases, on top of a 1.0% rise in Q1'25. Miscellaneous sales including gasoline stations recovered 2.6% (2.3% y/y), up for the second quarter in three, following a 2.3% decline. Food & beverage sales excluding food services rose 0.8% (15.5% y/y), the third q/q rise in four quarters, after a 0.1% easing.

E-commerce sales are goods and services ordered over an internet, mobile device (M-commerce), extranet, Electronic Data Interchange (EDI) network, electronic mail, or other comparable online system. Payment may or may not be made online and sometimes sale & price are negotiated. Total sales estimates are adjusted for seasonal variation, but not for price changes. They are also adjusted for trading-day differences and moving holidays.

Retail e-commerce sales data can be found in Haver's **USECON** database.

- Sales +1.4%, the 14th q/q rise in 15 qtrs.; +5.3% y/y, the lowest since Q2'22.
- Online share of total retail sales up to 16.3%, the highest since Q2'20.
- Nonstore sales rebound, up for the fourth quarter in five.
- Widespread gain in online sales led by bldg. materials & garden equipt. (+34.7% q/q).

U.S. Retail E-Commerce Sales Rise in Q2'25

250819C20.jpg

250819D20.jpg

Retail gasoline prices for all grades, on average, inched up to $3.25 per gallon (-7.1% y/y) last week after falling to $3.24 one week earlier. Prices remained above their low of $3.13 in the week of December 9. The recent high was $3.79 in the week ending April 22, 2024. Their all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel fell to $3.71 per gallon (+0.7% y/y) in the week of August 18 after easing to $3.75 in the prior week. The latest diesel price stood well below a high of $4.63 in the week ending September 18, 2023 and a peak of $5.81 in the week ending June 20, 2022.

The price of West Texas Intermediate crude oil declined to $63.31 per barrel (-19.7% y/y) in the week ended August 15 from $64.71 in the prior week. The drop left prices at the lowest level since the first week of June. Prices remained above a $59.04 low in the second week of May. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $63.96 per barrel. The price of European Brent crude fell to $67.17 per barrel (-18.6% y/y) in the week of August 15, after falling to $68.17 in the prior week. Prices remained below a recent high of $95.61 in the week of September 29, 2023 and below a peak of $127.40 in June 2022. The price was $68.18 per gallon yesterday.

Natural gas prices slipped to an average $2.94/mmbtu (+38.0% y/y) in the week ended August 15, after falling to an average $2.99/mmbtu in the prior week. Prices remained well above a low of $1.40/mmbtu in the week of March 15, 2024 but below their peak of $9.56 in the week of August 26, 2022. Yesterday, the price was $2.96 per mmbtu.

Gasoline demand declined 1.5% y/y in the four weeks ending August 8, following a 2.2% y/y decline in the prior four weeks. Demand for all petroleum products rose 2.9% y/y in the four weeks ending August 8, after a 1.6% y/y increase in the previous four-week period. Crude oil input to refineries rose 4.2% y/y in the four weeks ending August 8, after a 2.9% y/y gain in the prior four weeks.

Gasoline inventories rose 1.8% y/y in the week ending August 8 after a 0.9% y/y in the prior week. Residual fuel oil inventories fell 25.7% y/y in the week of August 8, after a 25.8% y/y fall in the prior week. Crude oil inventories rose 2.8% y/y in the week of August 8 after a 2.7% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories stood at 25.0 days in the week of August 8, unchnged from the prior week. The recent low was 22.9 days in the week of November 8, 2024. The supply of crude oil held at 25.0 days in the week of August 8, and remained below a high of 31.9 days in the week of March 3, 2023.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** & **USENERGY** database.

U.S. Energy Prices Are Mixed in Latest Week

Tian Yong Woon

This week, we examine recent developments in US-China trade and assess the broader implications of US trade actions for the BRIC bloc—Brazil, Russia, India, and China. Last week, the US and China extended their tariff truce by 90 days, a move welcomed by equity markets (chart 1). While this pause eased fears of renewed trade tensions, it remains temporary and fragile, with no durable resolution in sight.

As for China’s economy, July data disappointed: retail sales, industrial production, and fixed-asset investment all missed expectations (chart 2). This may signal that tariffs are beginning to bite, as earlier growth drivers—such as some front-loading of imports and one-off consumption boosts like China’s durable-goods subsidy—are fading (chart 3). Newer measures, including loan-interest subsidies, may provide some interim relief. Meanwhile, the property sector remains under heavy strain, with further price and investment declines evidenced in July (chart 4).

In the broader regional context, US trade measures may inadvertently push trading partners closer together, complicating Washington’s bilateral strategy. The BRIC bloc shows tentative signs of greater alignment, though this has yet to appear in data for trade flows (chart 5). China and India, however, are warming toward one another: Foreign Minister Wang Yi’s visit to India this week—focused on the Himalayan border among other issues—suggests an improving dialogue. Separately, discussions at the national level to restart direct flights between the two countries also signal a thaw. Full economic integration remains distant, but the scale of both economies suggests significant potential if relations continue to improve (chart 6).

**The US-China tariff truce**
Last week, the US and China announced a 90-day extension to their mutual tariff truce. Although largely expected, the move still generated further equity market gains (see chart 1). This contrasts sharply with worst-case scenarios earlier this year, when tensions peaked and Washington imposed sweeping tariffs of 145% on Chinese imports — levels that would have severely disrupted global trade and growth if sustained. Instead, both sides agreed to keep additional tariffs at 10% until November 10, allowing more time to pursue a durable trade deal. Still, this is merely a pause rather than progress. 

250819T1.jpg

**The China docket**
In the meantime, China’s latest monthly data releases were watched closely and offered valid reasons for caution despite earlier signs of resilience. More specifically, retail sales, industrial production, and fixed-asset investment (chart 2) all missed expectations, suggesting US tariff and non-tariff measures are beginning to weigh on growth alongside persistent domestic headwinds. Also, China’s unemployment rate inched higher, while property prices continued to decline. If such weakness persists, calls for additional policy support will grow, even though debt-fuelled measures risk merely trading today’s problems for tomorrow’s.

250819T2.jpg

**China retail sales**
Diving deeper into the individual releases, chart 3 highlights the gradual slowdown in China’s retail sales in recent months, with growth easing to 3.7% y/y in July. By product category, the deceleration reflects weaker automobile sales — amid authorities’ clampdown on carmaker price wars — and softer furniture sales, suggesting a one-off boost from the government’s durable-goods subsidy programme may now be fading. Clearer confirmation could come if sales growth of other subsidized goods, such as home appliances, also begin to weaken. Still, retail spending — and broader consumption activity — may gain fresh support from China’s new loan-interest subsidy programme, which covers both consumer borrowing and eligible service-sector business loans.

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**China property prices and investment**
Moving next to China’s beleaguered property market, the sector has shown no meaningful recovery for several years. Prices remain on a downtrend, and repeated investor attempts to call a bottom have proven futile. The latest data offered no relief: property prices continued to decline, while investment in the sector fell 12% y/y year-to-date in July (chart 4). That said, the pace of price declines has slowed sharply compared with last year. Even so, what was once a major engine of China’s growth continues to shrink into a shadow of its former self.

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**The BRIC bloc**
While recent trade measures appear favourable for the US, lowering partner tariffs and modestly raising Washington’s own rates, significant risks remain. Such moves could push US trading partners closer together, undermining the administration’s strategy of leveraging bilateral negotiations. One potential area of alignment is the BRIC bloc — Brazil, Russia, India, and China. Although hard data have yet to show major shifts (see chart 5), recent headlines suggest small steps toward deeper cooperation. That said, Russia remains constrained by heavy US sanctions and pressure, as reflected in trade flows with its closest partners.

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Digging a little further, China and India have recently begun to ease their decades-long frosty ties, partly in response to this year’s US trade tensions. A key sign of improving relations is China’s Foreign Minister Wang Yi’s high-profile visit to India from Monday to Wednesday this week. The visit focused on, among other topics, the disputed Himalayan border — which, if resolved, would mark a major step in restoring bilateral relations — and trade across the border. Other indicators of a warming relationship include ongoing talks to restart direct flights, suspended during the pandemic. Given the sheer size of their populations and economies, as shown in chart 6, a fully developed China-India economic partnership could unlock immense potential. However, the path to meaningful economic integration remains at an early stage, with numerous hurdles still to navigate.

Economy in Brief: September 2009

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