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/080602a.jpg" align="left" border="0" height="265" width="353">
The Institute of Supply Management (ISM) reported that during
May its Composite Index of Manufacturing Sector Activity rose to 49.6
from an unrevised 48.6 in April. The latest was better than Consensus
expectations which had been for an unchanged reading m/m. However, the
index remained below the break even level for factory sector activity
of 50 for the fifth month in the last six.
The index's average level of 49.0 so far this year was its
lowest since early 2003.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602b.jpg" align="right" border="0" height="265" width="353">
During the last twenty years there has been a 64% correlation
between the level of the Composite Index and the three-month growth in
factory sector industrial production.
It is appropriate to correlate the ISM index level
with factory sector growth because the ISM index
is a diffusion index. It measures growth by using all of the positive
changes in activity added to one half of the zero change in activity
measures.
The new orders index rose slightly m/m to its highest level
since November of last year. The reading was, however, near the lowest
level since the recession year of 2001. The production index also rose
very modestly for the second month. The inventory component and the
supplier delivery indexes were roughly unchanged month-to-month.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602c.jpg" align="left" border="0" height="265" width="353">
The new export orders sub-series rose moderately to 59.5 which
was its highest level since early 2004. During the last ten years there
has been a 53% correlation between the index and the q/q change in real
exports of goods in the GDP accounts.
The employment index was about unchanged at the low reading of
45.5, near its lowest level since mid 2003. During the last twenty
years there has been a 67% correlation between the level of the ISM
employment index and the three-month growth in factory sector
employment.
The prices paid index rose again to its highest level since
early 2004. During the last twenty years there has been a 77%
correlation between the price index and the three-month change in the
PPI for intermediate goods.
The NBER's Business-Cycle Dating Procedure
is available <a href="http://www.nber.org/cycles/recessions.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/SURVEYS/@S2/@S201/@S201.HTM">ISM
Mfg</a></th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">May '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>49.6</td>
<td>48.6</td>
<td>52.8</td>
<td>51.1</td>
<td>53.1</td>
<td>54.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders Index</td>
<td>49.7</td>
<td>46.5</td>
<td>58.6</td>
<td>54.3</td>
<td>55.4</td>
<td>57.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Employment Index</td>
<td>45.5</td>
<td>45.4</td>
<td>51.4</td>
<td>50.5</td>
<td>51.7</td>
<td>53.6</td>
</tr>
<tr>
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>87.0</td>
<td>84.5</td>
<td>71.0</td>
<td>64.6</td>
<td>65.0</td>
<td>66.4</td>
</tr>
</tbody>
</table>
U.S. Construction Spending Down
Again 
by <a href="/comment/Moeller.html">Tom
Moeller</a> June 2, 2008



<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602h.jpg" align="left" border="0" height="265" width="353">

The value of construction put in place fell for the seventh
consecutive month in April. The 0.4% decline was about as-expected and
the March decline of 0.6% was half that reported initially.
Nevertheless, the value of total construction was down 8.6% since its
peak in early 2006.
A 2.3% decline in the April value of residential building
activity led last month's decline in the total, and since its peak it
has fallen by more than one-third. The 37.4% decline was paced by lower
building of single family units; down 4.4% in April and by 3.0% to 5.4%
in each of the prior eight months. Building activity on multi-family
units increased 0.4% (-12.5% y/y) for the second straight month while
spending on improvements fell 0.5% (+7.5% y/y).
During the last twenty years there has been an 84% correlation
between the q/q change in the value of residential building and its
contribution to growth in real GDP.
The value of nonresidential building activity surged again for
the third straight month. The 1.6% increase was led by a 7.6% (45.4%
y/y) jump in lodging and a 1.0% (19.4% y/y) increase in the education
category. Growth in office building remained firm though it posted only
a 0.5% (15.0% y/y) increase during April. Growth in multi-retail
building eased. A 2.1% gain during April failed to make up the declines
during the prior few months and spending was down 4.1% y/y.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602i.jpg" align="right" border="0" height="265" width="353">
Public construction slipped 0.3% after a 1.0% March surge.
Public sector nonresidential building slipped 0.5% but it still was up
7.0% y/y. The value of construction spending on highways &amp;
streets ticked up 0.1% (5.2% y/y) after strong gains during the prior
two months. (The value of construction on highways &amp; streets is
roughly one third of the value of total public construction spending.)
Building activity of educational facilities rose 7.3% from a year
earlier and nonresidential office building surged 26.4% y/y.
The more detailed categories of construction represent the
Census Bureau&#8217;s reclassification of construction activity into end-use
groups. Finer detail is available for many of the categories; for
instance, commercial construction is shown for automotive sales and
parking facilities, drugstores, building supply stores, and both
commercial warehouses and mini-storage facilities. Note that start
dates vary for some seasonally adjusted line items in 2000 and 2002 and
that constant-dollar data are no longer computed.
</div>


<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/@E9/@E907/@E907.HTM">Construction</a></th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>-0.4%</td>
<td>-0.6%</td>
<td>-3.9%</td>
<td>-2.7%</td>
<td>5.6%</td>
<td>10.7%</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>-0.5%</td>
<td>-1.1%</td>
<td>-7.2%</td>
<td>-6.8%</td>
<td>4.7%</td>
<td>12.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>-2.3%</td>
<td>-3.0%</td>
<td>-21.0%</td>
<td>-18.1%</td>
<td>0.5%</td>
<td>13.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>1.6%</td>
<td>1.2%</td>
<td>15.4%</td>
<td>18.0%</td>
<td>15.2%</td>
<td>7.8%</td>
</tr>
<tr>
<td class="firstcol">Public</td>
<td>-0.3%</td>
<td>1.0%</td>
<td>6.8%</td>
<td>12.2%</td>
<td>9.2%</td>
<td>6.2%</td>
</tr>
</tbody>
</table>
 EMU MFG Weakens but Pace
ofDecline Slows 
by <a href="/comment/Brusca.html">Robert
Brusca</a>
June 2, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602d.jpg" align="left" border="0" height="265" width="353">
Manufacturing output weakened slightly in the Euro Area in May
but the pace of decline is slowing. Among reporting countries the MFG
PMIs mostly slipped in May. France and the Netherlands were exceptions,
the Netherlands in the most trivial of ways.

Spain remains the mostly serious impacted of EMU countries
with its MFG PMI in the bottom 2.5% of range constructed from early
2000 on. The overall EMU PMI is below breakeven at the 43.7 range
percentile. France, Italy and Austria, too, are below their respective
range midpoints. Germany&#8217;s standing at the 61.2 percentile of its range
is astonishing. The UK, an EU only member, stands in the 42 percentile
of its range.

For the most part these rankings reflect inflation rankings
and therefore reflect competitiveness rankings within the EMU area.
Greece, however, is performing in terms of its MFG PMI much better than
its inflation ranking would have you believe it would. The rest fall
more or less into line. (see inflation chart below for cumulative
inflation on the national HICPs since July 2000).

The table shows that German inflation has risen by 4.4
percentage points less than EMU inflation during their period. Greece&#8217;s
HICP has risen by 11.5% more than the EMU average. Spain is also an
inflation leader and as expected it is an output laggard in this cycle
as the euro has risen.&gt;

On balance there is a great deal of irregularity within the
Euro Area involving inflation performance and output results. Still
there is only one monetary policy, making things difficult. The ECB is
looking only at group inflation (EMU-wide) to make policy and holding
to a firm path. Cracks in the Euro Area are beginning to form. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">NTC MFG
Indices </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>May-08</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr>
<td class="firstcol">Euro-13</td>
<td>50.60</td>
<td>50.74</td>
<td>52.03</td>
<td>51.12</td>
<td>51.84</td>
<td>52.78</td>
<td>43.7%</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>53.57</td>
<td>53.62</td>
<td>55.14</td>
<td>54.11</td>
<td>54.11</td>
<td>54.58</td>
<td>61.2%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>51.48</td>
<td>51.12</td>
<td>51.88</td>
<td>51.49</td>
<td>52.68</td>
<td>52.44</td>
<td>41.5%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>48.05</td>
<td>48.24</td>
<td>49.41</td>
<td>48.57</td>
<td>49.65</td>
<td>51.16</td>
<td>29.5%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>43.79</td>
<td>45.19</td>
<td>46.42</td>
<td>45.13</td>
<td>46.90</td>
<td>49.41</td>
<td>2.5%</td>
</tr>
<tr>
<td class="firstcol">Austria</td>
<td>49.76</td>
<td>49.83</td>
<td>53.39</td>
<td>50.99</td>
<td>52.11</td>
<td>53.14</td>
<td>41.4%</td>
</tr>
<tr>
<td class="firstcol">Greece</td>
<td>53.77</td>
<td>54.38</td>
<td>52.73</td>
<td>53.63</td>
<td>52.89</td>
<td>53.48</td>
<td>52.7%</td>
</tr>
<tr>
<td class="firstcol">Netherlands</td>
<td>51.46</td>
<td>51.45</td>
<td>53.15</td>
<td>52.02</td>
<td>52.58</td>
<td>54.64</td>
<td>51.7%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol"> EU</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>50.03</td>
<td>50.81</td>
<td>51.14</td>
<td>50.66</td>
<td>51.02</td>
<td>52.76</td>
<td>42.1%</td>
</tr>
<tr>
<td colspan="6" class="firstcol">Percentile
is over range since March
2000</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col">Trouble in
the Zone? </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Jul-00</td>
<td>Gap</td>
</tr>
<tr class="odd">
<td class="firstcol">HICP</td>
<td>Apr-08</td>
<td>W/EMU</td>
</tr>
<tr>
<td class="firstcol">Austria</td>
<td>17.1%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td>17.7%</td>
<td>-1.8%</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>15.1%</td>
<td>-4.4%</td>
</tr>
<tr>
<td class="firstcol">Greece</td>
<td>31.0%</td>
<td>11.5%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>20.8%</td>
<td>1.3%</td>
</tr>
<tr>
<td class="firstcol">The Netherlands</td>
<td>20.3%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>28.3%</td>
<td>8.8%</td>
</tr>
<tr>
<td class="firstcol">EMU Total</td>
<td>19.5%</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
Far East Inflation AndEasy Monetary Policies Mean Negative Real Interest Rates In The Area 
by <a href="/comment/Curley.html">Louise
Curley</a> June 2, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602e.jpg" align="left" border="0" height="265" width="353">
Inflation has risen sharply in most of the Far Eastern
countries. Even those countries that had inflation rates below 3% in
2007--Singapore, Thailand, the Philippines and South Korea-- are now
showing rates of inflation ranging from 4.9% to 8.35% in recent months.
The first chart shows inflation rates in these four countries. Only in
Malaysia, where inflation was 2.0% in 2007, is inflation still below
3.0%.
In April, China's inflation rate was 8.5% and in India, where
the latest data are for March, the inflation rate was 6.0%. In other
countries inflation rates are much higher. For example, in May, the
inflation rates in Indonesia was 10.4% and in Vietnam, 25.3%.
In most Far Eastern countries the monetary authorities have
kept interest rates steady in recent months so that most countries now
have negative real interest rates. The second chart show some typical
policy interest rates and the third chart shows real interest rates in
China and India, which have recently become negative.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602f.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080602g.jpg" border="0" height="265" width="312">


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">INFLATION
RATES IN THE FAR EAST (%)&nbsp;</th>
<th scope="col">May 08</th>
<th scope="col">Apr 08&nbsp;</th>
<th scope="col">Mar&nbsp; 08&nbsp;</th>
<th scope="col">Feb 08&nbsp;</th>
<th scope="col">Jan 08&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">China</td>
<td>--</td>
<td>8.49</td>
<td>8.29</td>
<td>8.84</td>
<td>4.10</td>
<td>4.79</td>
<td>1.76</td>
<td>1.78</td>
</tr>
<tr>
<td class="firstcol">India&nbsp;</td>
<td>--</td>
<td>--</td>
<td>6.02</td>
<td>5.23</td>
<td>4.84</td>
<td>4.79</td>
<td>1.76</td>
<td>1.78</td>
</tr>
<tr class="odd">
<td class="firstcol">South Korea</td>
<td>4.88</td>
<td>4.11</td>
<td>3.91</td>
<td>3.57</td>
<td>3.89</td>
<td>2.53</td>
<td>2.24</td>
<td>2.75</td>
</tr>
<tr>
<td class="firstcol">Malaysia</td>
<td>--</td>
<td>3.05</td>
<td>2.76</td>
<td>2.66</td>
<td>2.28</td>
<td>2.03</td>
<td>3.61</td>
<td>3.05</td>
</tr>
<tr class="odd">
<td class="firstcol">Thailand</td>
<td>7.59</td>
<td>6.19</td>
<td>5.29</td>
<td>5.41</td>
<td>4.26</td>
<td>2.23</td>
<td>4.64</td>
<td>4.54</td>
</tr>
<tr>
<td class="firstcol">Singapore</td>
<td>--</td>
<td>7.54</td>
<td>6.69</td>
<td>6.58</td>
<td>6.51</td>
<td>2.10</td>
<td>0.96</td>
<td>0.47</td>
</tr>
<tr class="odd">
<td class="firstcol">Philippines
</td>
<td>--</td>
<td>8.29</td>
<td>6.37</td>
<td>5.36</td>
<td>4.86</td>
<td>2.77</td>
<td>6.23</td>
<td>7.68</td>
</tr>
<tr>
<td class="firstcol">Indonesia</td>
<td>10.38</td>
<td>8.96</td>
<td>8.17</td>
<td>7.90</td>
<td>7.36</td>
<td>6.41</td>
<td>13.10</td>
<td>10.46</td>
</tr>
<tr class="odd">
<td class="firstcol">Vietnam</td>
<td>25.27</td>
<td>21.43</td>
<td>19.39</td>
<td>15.67</td>
<td>14.09</td>
<td>8.30</td>
<td>7.39</td>
<td>8.28</td>
</tr>
<tr>
<td class="firstcol">Malaysia</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
</body></html>

The Institute of Supply Management (ISM) reported that during May its Composite Index of Manufacturing Sector Activity rose to 49.6 from an unrevised 48.6 in April. The latest was better than Consensus expectations which had been for [...]

ISM Factory Sector Index Rose Unexpectedly; Level Still Indicates Contraction

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>
 




<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530g.jpg" align="left" border="0" height="265" width="353">

Industrial output is slowing sharply in Japan and across most
sectors. Consumer goods and intermediate goods are leading the way
down. Very sharp declines have come in textiles and transportation
goods in the past two months. Intermediate goods, in addition to
consumer goods, find weak trends in place over two months as well. Even
investment goods that have been relatively stronger on a worldwide
basis are showing some softness as the output of investment goods fell
in March in Japan and managed only a weak rebound in April.

In the new quarter-to-date all sectors and breakdowns show
steep declines except for mining. Japan like German is getting off to a
weak start in 2008-Q2. For Germany it is weak retail sales, for Japan
it&#8217;s weakness in output.




<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col"> Japan Industrial Production Trends</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">m/m %</td>
<td colspan="3">Saar %</td>
<td>Yr/Yr</td>
<td>Qtr-2-Date</td>
</tr>
<tr class="odd">
<td class="firstcol">seasonally adjusted</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Yr-Ago</td>
<td>% AR</td>
</tr>
<tr>
<td class="firstcol">Mining &amp; Manufacturing</td>
<td>-0.3%</td>
<td>-3.4%</td>
<td>1.6%</td>
<td>-8.2%</td>
<td>-6.8%</td>
<td>0.6%</td>
<td>1.1%</td>
<td>-11.6%</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>-0.1%</td>
<td>-3.8%</td>
<td>2.0%</td>
<td>-7.5%</td>
<td>-5.6%</td>
<td>0.6%</td>
<td>1.1%</td>
<td>-11.4%</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>-0.4%</td>
<td>-3.3%</td>
<td>1.6%</td>
<td>-8.2%</td>
<td>-6.8%</td>
<td>0.6%</td>
<td>1.0%</td>
<td>-11.7%</td>
</tr>
<tr>
<td class="firstcol">Textiles</td>
<td>-1.6%</td>
<td>-1.3%</td>
<td>-0.2%</td>
<td>-11.8%</td>
<td>-10.4%</td>
<td>-7.1%</td>
<td>-5.0%</td>
<td>-14.3%</td>
</tr>
<tr>
<td class="firstcol">Transportation</td>
<td>-2.2%</td>
<td>-5.6%</td>
<td>1.3%</td>
<td>-23.6%</td>
<td>-11.0%</td>
<td>4.2%</td>
<td>0.7%</td>
<td>-29.0%</td>
</tr>
<tr class="even">
<td colspan="9" class="firstcol">Product Group</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-1.3%</td>
<td>-5.2%</td>
<td>2.7%</td>
<td>-14.7%</td>
<td>-9.0%</td>
<td>0.1%</td>
<td>-1.9%</td>
<td>-21.4%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-0.7%</td>
<td>-1.3%</td>
<td>1.0%</td>
<td>-4.3%</td>
<td>-5.3%</td>
<td>2.1%</td>
<td>3.1%</td>
<td>-7.5%</td>
</tr>
<tr>
<td class="firstcol">Investment Goods</td>
<td>0.5%</td>
<td>-4.3%</td>
<td>1.1%</td>
<td>-10.8%</td>
<td>-7.2%</td>
<td>-2.5%</td>
<td>0.2%</td>
<td>-11.9%</td>
</tr>
<tr>
<td class="firstcol">Mining</td>
<td>4.2%</td>
<td>1.4%</td>
<td>2.3%</td>
<td>36.4%</td>
<td>-1.3%</td>
<td>0.6%</td>
<td>5.9%</td>
<td>41.3%</td>
</tr>
<tr>
<td class="firstcol">Electricity &amp; Gas</td>
<td>3.8%</td>
<td>-11.4%</td>
<td>9.7%</td>
<td>3.7%</td>
<td>3.5%</td>
<td>-0.2%</td>
<td>4.2%</td>
<td>-8.0%</td>
</tr>
</tbody>
</table>
</div></body></html>

Industrial output is slowing sharply in Japan and across most sectors. Consumer goods and intermediate goods are leading the way down. Very sharp declines have come in textiles and transportation goods in the past two months. [...]

Japan Industrial Sector in Steep Slowdown…or Worse

<!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>
 




<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530f.jpg" align="left" border="0" height="265" width="353">

German retail sales are showing some real weakness in April.
Nominal sales ex-autos are off by 1.3% in April and 1.7% in real terms.
For the developing second quarter the results are grim. As of the first
month of the new quarter the growth rate of ex auto retail sales in
April over the Q1 base is at a minus 13.1% annualized growth rate for
nominal retail sales and -15.9% for inflation-adjusted retail sales. 
 

The table shows a steady menu of negative growth rates over
all horizons from one year in, with the pace of declines getting more
or less progressively weaker. 
 

The chart shows that retail sales trends in Germany have been
volatile even though these series exclude auto sales which can be even
more volatile. The current month is turning trends sharply lower. April
is the second deeply negative month in a row. Weakness in March and
April offset what had looked like a strong gain in February sales. The
trends in Europe have been more consistently negative. Like in the US,
consumer readings in Germany and in Europe are generally among some of
the weakest in the entire economy. Weak retail sales keep this trend in
play. 

</div>


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col"> German Real and Nominal Retail Sales</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>Yr Ago</td>
<td>QTR Saar</td>
</tr>
<tr>
<td class="firstcol">Retail Excl Auto</td>
<td>-1.3%</td>
<td>-2.2%</td>
<td>1.4%</td>
<td>-8.1%</td>
<td>-0.8%</td>
<td>-3.1%</td>
<td>1.7%</td>
<td>-13.1%</td>
</tr>
<tr>
<td class="firstcol">Food Beverage &amp; Tobacco</td>
<td>-1.0%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>-4.4%</td>
<td>-3.1%</td>
<td>-2.3%</td>
<td>1.7%</td>
<td>-6.4%</td>
</tr>
<tr>
<td class="firstcol">Clothing footwear</td>
<td>1.2%</td>
<td>-10.3%</td>
<td>6.2%</td>
<td>-13.4%</td>
<td>-4.0%</td>
<td>-9.9%</td>
<td>8.6%</td>
<td>-21.8%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="9">Real</td>
</tr>
<tr>
<td class="firstcol">Retail Excl auto</td>
<td>-1.7%</td>
<td>-2.2%</td>
<td>1.0%</td>
<td>-11.3%</td>
<td>-3.9%</td>
<td>-5.6%</td>
<td>0.9%</td>
<td>-15.9%</td>
</tr>
</tbody>
</table>
</body></html>

German retail sales are showing some real weakness in April. Nominal sales ex-autos are off by 1.3% in April and 1.7% in real terms. For the developing second quarter the results are grim. As of the first month of the new quarter the [...]

German Retail Sales by Sector

<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/080530a.jpg" width="353">
The final reading of consumer sentiment during May from the University of Michigan fell 4.5% from April to a level of 59.8. That was about as indicated in the preliminary report made two weeks ago and it nearly matched Consensus expectations. The latest level was the lowest since the brief &quot;credit crunch&quot; recession during 1980. 
During the last ten years there has been a 47% correlation between the level of sentiment and the three month change in real consumer spending.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530b.jpg" width="353">
The current conditions index nearly matched the April decline and fell 6.9% after an 8.6% decline during April. The view of current conditions for buying large household goods fell a hard 6.3% (-34.4% y/y) and it was the third sharp m/m drop this year. Only 49% of respondents thought that now was a good time to buy versus 70%-plus during the last three years. Conversely, 44% thought it was a bad time to buy. That was the highest reading since 1990 and more than double the recent rates. The view of current personal finances fell to its lowest level since early 1981.
The expectations component of overall sentiment fell 3.0% after its 11.3% April dive. The index fell to its lowest level since late 1990. Expectations for personal finances fell slightly after a sharp April decline to the lowest level since 1980. Expectations for business conditions during the next year fell much more strongly by 12.5% (-63.9% y/y) to its lowest level since 1980. The index for expected business conditions over the next five years also fell but more mildly m/m (-21.3% y/y).<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530c.jpg" width="353">
Opinions about government policy, which apparently influence economic expectations, still showed a sharp 21.9% m/m (-43.2% y/y) drop. The percentage of those surveyed who indicated that they thought government was doing a good job amounted to only 6% but those who thought a poor job was being done shot up to a record 56% from 43% in April.
The mean expected rate of inflation during the next twelve months surged to 7.0% from 5.7% in April, the highest level since 1981.Has the Behavior of Inflation and Long-Term Inflation Expectations Changed? from the Federal Reserve Bank of Kansas City can be found <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/1q08Clark.pdf">here</a>.
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&#39;s USECON database, with details in the proprietary UMSCA database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University of Michigan</a></th>
<th scope="col">May (Final)</th>
<th scope="col">May (Prelim.)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">May y/y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>59.8</td>
<td>59.5</td>
<td>62.6</td>
<td>&nbsp;69.5</td>
<td>-32.3% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>73.3</td>
<td>71.7</td>
<td>77.0</td>
<td>84.2</td>
<td>-30.3%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>51.1</td>
<td>51.7</td>
<td>53.3</td>
<td>60.1</td>
<td>-34.1%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
</body>
</html>

The final reading of consumer sentiment during May from the University of Michigan fell 4.5% from April to a level of 59.8. That was about as indicated in the preliminary report made two weeks ago and it nearly matched Consensus [...]

Michigan Consumer Sentiment Still the Lowest Since 1980

<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>
 



<div align="left"><img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530d.jpg" width="353">
Nominal personal income rose 0.2% last month after a 0.4% March increase which was revised up slightly from the initial report. The April rise matched Consensus expectations. Nevertheless, slower growth in payrolls slowed the rise in income to a three-month growth rate of 4.2% after the 6.2% increase during all of last year.
Disposable personal income also rose a moderate 0.2% during April. Adjusted for price inflation, however, real income fell just slightly after no change in March. As a result of this recent and earlier weakness, the 1.5% three-month growth rate in real DPI was roughly half of that during all of 2007.
The PCE chain price index matched expectations and increased 0.2% after a 0.3% rise in March. The core PCE price index also matched expectations and ticked up just 0.1%. That weakness was enough to lower the three-month growth in core prices to 1.8%, its weakest since the middle of last year. Easier gains have been registered for goods prices but services prices have grown at a firmer 3.7% annual rate during the last three months.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530e.jpg" width="353">
Wage &amp; salary income fell 0.2% (+4.4% y/y) after a 0.5% March increase. As a result of the April decline the three-month growth in wages fell to 2.5%, half of last year&#39;s growth and still well reduced from the 10% rate of growth early in 2007 and late in 2006. Factory sector wages fell 0.7% (+1.1% y/y) and the decline reversed all of the gains during the prior three months. Wages &amp; salaries in the private service-providing industries fell as well in April but remained relatively strong versus the goods producing sector. A 0.2% April drop (+5.1% y/y) pulled three-month growth to 3.2% or half the gain during 2007. Wages in the government sector rose 0.3% (4.9% y/y) for the second straight month and three-month growth of 4.5% was equal to last year&#39;s increase but it was down from the 7.3% growth during 1Q.
Interest income rose a modest 0.1% after lower interest rates had caused interest income to be flat or unchanged (+2.2% y/y) during the prior six months. That rise is down from 5% to 14% growth during each of the prior three years. Dividend income rose another firm 0.5% (10.3% y/y) and, again, a three-month gain of 7.2% is half, or more than half, the rates of growth during the prior four years.
Personal consumption expenditures rose just 0.2% last month or half the gain during March. Adjusted for price inflation, real spending fell just slightly in April and it has grown at a 0.1% annual rate during the last three months. That&#39;s after 2.9% growth in 2007 and much less than the 3.0% growth in each of the prior two years.
Real spending on discretionary items was mixed. Motor vehicle &amp; parts purchases fell 2.3% last month and three-month growth plummeted further to -15.3%. In a reversal, real spending on household furniture &amp; appliances surged 1.9%. That was the strongest increase since early 2006. Real spending on apparel grew another 0.5% and three-month growth held firm at 9.0%. These and other detailed spending figures are available in Haver&#39;s USNA database.
The personal savings rate improved slightly from the prior three year&#39;s average to 0.7%.</div>

<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/@E7/@E711/@E71102/@E71102.HTM">Disposition of Personal Income</a> (%)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.2</td>
<td>0.4</td>
<td>4.8</td>
<td>6.2</td>
<td>6.6</td>
<td>5.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Disposable Personal Income</td>
<td>0.2</td>
<td>0.3</td>
<td>5.0</td>
<td>5.7</td>
<td>5.9</td>
<td>4.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption</td>
<td>0.2</td>
<td>0.4</td>
<td>4.8%</td>
<td>5.5</td>
<td>5.9</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>0.7</td>
<td>0.7</td>
<td>0.4 (April &#39;07)</td>
<td>0.5</td>
<td>0.4</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>0.2</td>
<td>0.3</td>
<td>3.2</td>
<td>2.5</td>
<td>2.8</td>
<td>2.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Less food &amp; energy</td>
<td>0.1</td>
<td>0.2</td>
<td>2.1</td>
<td>2.1</td>
<td>2.2</td>
<td>2.2</td>
</tr>
</tbody>
</table>
</body>
</html>

Nominal personal income rose 0.2% last month after a 0.4% March increase which was revised up slightly from the initial report. The April rise matched Consensus expectations. Nevertheless, slower growth in payrolls slowed the rise in [...]

U.S. Income & Spending Rose Moderately in April; Real Income Flat

<!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>
 




<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530d.jpg" align="left" border="0" height="265" width="353">

Nominal personal income rose 0.2% last
month after a 0.4% March increase which was revised up slightly from
the initial report. The April rise matched Consensus expectations.
Nevertheless, slower growth in payrolls slowed the rise in income to a
three-month growth rate of 4.2% after the 6.2% increase during all of
last year.
Disposable personal income also rose a
moderate 0.2% during April. Adjusted for price inflation, however, real
income fell just slightly after no change in March. As a result of this
recent and earlier weakness, the 1.5% three-month growth rate in real
DPI was roughly half of that during all of 2007.
The PCE chain price index matched
expectations and increased 0.2% after a 0.3% rise in March. The core
PCE price index also matched expectations and ticked up just
0.1%. That weakness was enough to lower the three-month growth in core
prices to 1.8%, its weakest since the middle of last year.
Easier gains have been registered for goods prices but services prices
have grown at a firmer 3.7% annual rate during the last three months.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530e.jpg" align="right" border="0" height="265" width="353">
Wage &amp; salary income fell 0.2% (+4.4% y/y) after a
0.5% March increase. As a result of the April decline the three-month
growth in wages fell to 2.5%, half of last year's growth and still well
reduced from the 10% rate of growth early in 2007 and late in 2006.
Factory sector wages fell 0.7% (+1.1% y/y) and the decline reversed all
of the gains during the prior three months. Wages &amp; salaries in
the private service-providing industries fell as well in April but
remained relatively strong versus the goods producing sector. A 0.2%
April drop (+5.1% y/y) pulled three-month growth to 3.2% or half the
gain during 2007. Wages in the government sector rose 0.3% (4.9% y/y)
for the second straight month and three-month growth of 4.5% was equal
to last year's increase but it was down from the 7.3% growth during 1Q.
Interest income rose a modest 0.1% after lower interest rates
had caused interest income to be flat or unchanged (+2.2% y/y) during
the prior six months. That rise is down from 5% to 14% growth during
each of the prior three years. Dividend income rose another firm 0.5%
(10.3% y/y) and, again, a three-month gain of 7.2% is half, or more
than half, the rates of growth during the prior four years.
Personal consumption expenditures rose just 0.2% last month or
half the gain during March. Adjusted for price inflation, real
spending fell just slightly in April and it has grown at a
0.1% annual rate during the last three months. That's after 2.9% growth
in 2007 and much less than the 3.0% growth in each of the prior two
years.
Real spending on discretionary items was mixed. Motor vehicle
&amp; parts purchases fell 2.3% last month and three-month growth
plummeted further to -15.3%. In a reversal, real spending on household
furniture &amp; appliances surged 1.9%. That was the strongest
increase since early 2006. Real spending on apparel grew another 0.5%
and three-month growth held firm at 9.0%. These and other detailed
spending figures are available in Haver's USNA database.
The personal savings rate improved slightly from the prior
three year's average to 0.7%.
</div>


<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/@E7/@E711/@E71102/@E71102.HTM">Disposition
of Personal Income</a> (%)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Personal Income</td>
<td>0.2</td>
<td>0.4</td>
<td>4.8</td>
<td>6.2</td>
<td>6.6</td>
<td>5.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Disposable
Personal Income</td>
<td>0.2</td>
<td>0.3</td>
<td>5.0</td>
<td>5.7</td>
<td>5.9</td>
<td>4.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Personal Consumption</td>
<td>0.2</td>
<td>0.4</td>
<td>4.8%</td>
<td>5.5</td>
<td>5.9</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">Saving Rate</td>
<td>0.7</td>
<td>0.7</td>
<td>0.4 (April '07)</td>
<td>0.5</td>
<td>0.4</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">PCE Chain Price Index</td>
<td>0.2</td>
<td>0.3</td>
<td>3.2</td>
<td>2.5</td>
<td>2.8</td>
<td>2.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Less food
&amp; energy</td>
<td>0.1</td>
<td>0.2</td>
<td>2.1</td>
<td>2.1</td>
<td>2.2</td>
<td>2.2</td>
</tr>
</tbody>
</table>
Michigan Consumer Sentiment Still
the Lowest Since 1980 
by <a href="/comment/Moeller.html">Tom
Moeller</a> May 30, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530a.jpg" align="left" border="0" height="265" width="353">
The final reading of consumer sentiment during May from the
University of Michigan fell 4.5% from April to a level of 59.8. That
was about as indicated in the preliminary report made two weeks ago and
it nearly matched Consensus expectations. The
latest level was the lowest since the brief "credit crunch" recession
during 1980. 
During the last ten years there has been a 47% correlation
between the level of sentiment and the three month change in real
consumer spending.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530b.jpg" align="right" border="0" height="265" width="353">
The current conditions index nearly matched the April decline
and fell 6.9% after an 8.6% decline during April. The view of current
conditions for buying large household goods fell a hard 6.3% (-34.4%
y/y) and it was the third sharp m/m drop this year. Only 49% of
respondents thought that now was a good time to buy versus 70%-plus
during the last three years. Conversely, 44% thought it was a bad time
to buy. That was the highest reading since 1990 and more than double
the recent rates. The view of current personal finances fell to its
lowest level since early 1981.
The expectations component of overall sentiment fell 3.0%
after its 11.3% April dive. The index fell to its lowest level since
late 1990. Expectations for personal finances fell slightly after a
sharp April decline to the lowest level since 1980. Expectations for
business conditions during the next year fell much more strongly by
12.5% (-63.9% y/y) to its lowest level since 1980. The index for
expected business conditions over the next five years also fell but
more mildly m/m (-21.3% y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530c.jpg" align="left" border="0" height="265" width="353">
Opinions about government policy, which apparently influence
economic expectations, still showed a sharp 21.9% m/m (-43.2% y/y)
drop. The percentage of those surveyed who indicated that they thought
government was doing a good job amounted to only 6% but those who
thought a poor job was being done shot up to a record 56% from 43% in
April.
The mean expected rate of inflation during the next twelve
months surged to 7.0% from 5.7% in April, the highest level since 1981.Has
the Behavior of Inflation and Long-Term Inflation Expectations Changed?
from the Federal Reserve Bank of Kansas City can be found <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/PDF/1q08Clark.pdf">here</a>.
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.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM">University
of Michigan</a></th>
<th scope="col">May (Final)</th>
<th scope="col">May (Prelim.)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">May y/y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>59.8</td>
<td>59.5</td>
<td>62.6</td>
<td>&nbsp;69.5</td>
<td>-32.3% </td>
<td>85.6</td>
<td>87.3</td>
<td>88.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>73.3</td>
<td>71.7</td>
<td>77.0</td>
<td>84.2</td>
<td>-30.3%</td>
<td>101.2</td>
<td>105.1</td>
<td>105.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>51.1</td>
<td>51.7</td>
<td>53.3</td>
<td>60.1</td>
<td>-34.1%</td>
<td>75.6</td>
<td>75.9</td>
<td>77.4</td>
</tr>
</tbody>
</table>
German Retail Sales by Sector 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 30, 2008



<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530f.jpg" align="left" border="0" height="265" width="353">

German retail sales are showing some real weakness in April.
Nominal sales ex-autos are off by 1.3% in April and 1.7% in real terms.
For the developing second quarter the results are grim. As of the first
month of the new quarter the growth rate of ex auto retail sales in
April over the Q1 base is at a minus 13.1% annualized growth rate for
nominal retail sales and -15.9% for inflation-adjusted retail sales. 
 

The table shows a steady menu of negative growth rates over
all horizons from one year in, with the pace of declines getting more
or less progressively weaker. 
 

The chart shows that retail sales trends in Germany have been
volatile even though these series exclude auto sales which can be even
more volatile. The current month is turning trends sharply lower. April
is the second deeply negative month in a row. Weakness in March and
April offset what had looked like a strong gain in February sales. The
trends in Europe have been more consistently negative. Like in the US,
consumer readings in Germany and in Europe are generally among some of
the weakest in the entire economy. Weak retail sales keep this trend in
play. 

</div>


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col"> German
Real and Nominal Retail Sales</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>Yr Ago</td>
<td>QTR Saar</td>
</tr>
<tr>
<td class="firstcol">Retail Excl Auto</td>
<td>-1.3%</td>
<td>-2.2%</td>
<td>1.4%</td>
<td>-8.1%</td>
<td>-0.8%</td>
<td>-3.1%</td>
<td>1.7%</td>
<td>-13.1%</td>
</tr>
<tr>
<td class="firstcol">Food Beverage &amp; Tobacco</td>
<td>-1.0%</td>
<td>-0.1%</td>
<td>0.0%</td>
<td>-4.4%</td>
<td>-3.1%</td>
<td>-2.3%</td>
<td>1.7%</td>
<td>-6.4%</td>
</tr>
<tr>
<td class="firstcol">Clothing footwear</td>
<td>1.2%</td>
<td>-10.3%</td>
<td>6.2%</td>
<td>-13.4%</td>
<td>-4.0%</td>
<td>-9.9%</td>
<td>8.6%</td>
<td>-21.8%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="9">Real</td>
</tr>
<tr>
<td class="firstcol">Retail Excl auto</td>
<td>-1.7%</td>
<td>-2.2%</td>
<td>1.0%</td>
<td>-11.3%</td>
<td>-3.9%</td>
<td>-5.6%</td>
<td>0.9%</td>
<td>-15.9%</td>
</tr>
</tbody>
</table>
Japan Industrial Sector in SteepSlowdown&#8230;or Worse 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 30, 2008



<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080530g.jpg" align="left" border="0" height="265" width="353">

Industrial output is slowing sharply in Japan and across most
sectors. Consumer goods and intermediate goods are leading the way
down. Very sharp declines have come in textiles and transportation
goods in the past two months. Intermediate goods, in addition to
consumer goods, find weak trends in place over two months as well. Even
investment goods that have been relatively stronger on a worldwide
basis are showing some softness as the output of investment goods fell
in March in Japan and managed only a weak rebound in April.

In the new quarter-to-date all sectors and breakdowns show
steep declines except for mining. Japan like German is getting off to a
weak start in 2008-Q2. For Germany it is weak retail sales, for Japan
it&#8217;s weakness in output.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col"> Japan
Industrial Production Trends</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">m/m %</td>
<td colspan="3">Saar %</td>
<td>Yr/Yr</td>
<td>Qtr-2-Date</td>
</tr>
<tr class="odd">
<td class="firstcol">seasonally adjusted</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Yr-Ago</td>
<td>% AR</td>
</tr>
<tr>
<td class="firstcol">Mining &amp; Manufacturing</td>
<td>-0.3%</td>
<td>-3.4%</td>
<td>1.6%</td>
<td>-8.2%</td>
<td>-6.8%</td>
<td>0.6%</td>
<td>1.1%</td>
<td>-11.6%</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>-0.1%</td>
<td>-3.8%</td>
<td>2.0%</td>
<td>-7.5%</td>
<td>-5.6%</td>
<td>0.6%</td>
<td>1.1%</td>
<td>-11.4%</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>-0.4%</td>
<td>-3.3%</td>
<td>1.6%</td>
<td>-8.2%</td>
<td>-6.8%</td>
<td>0.6%</td>
<td>1.0%</td>
<td>-11.7%</td>
</tr>
<tr>
<td class="firstcol">Textiles</td>
<td>-1.6%</td>
<td>-1.3%</td>
<td>-0.2%</td>
<td>-11.8%</td>
<td>-10.4%</td>
<td>-7.1%</td>
<td>-5.0%</td>
<td>-14.3%</td>
</tr>
<tr>
<td class="firstcol">Transportation</td>
<td>-2.2%</td>
<td>-5.6%</td>
<td>1.3%</td>
<td>-23.6%</td>
<td>-11.0%</td>
<td>4.2%</td>
<td>0.7%</td>
<td>-29.0%</td>
</tr>
<tr class="even">
<td colspan="9" class="firstcol">Product
Group</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-1.3%</td>
<td>-5.2%</td>
<td>2.7%</td>
<td>-14.7%</td>
<td>-9.0%</td>
<td>0.1%</td>
<td>-1.9%</td>
<td>-21.4%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-0.7%</td>
<td>-1.3%</td>
<td>1.0%</td>
<td>-4.3%</td>
<td>-5.3%</td>
<td>2.1%</td>
<td>3.1%</td>
<td>-7.5%</td>
</tr>
<tr>
<td class="firstcol">Investment Goods</td>
<td>0.5%</td>
<td>-4.3%</td>
<td>1.1%</td>
<td>-10.8%</td>
<td>-7.2%</td>
<td>-2.5%</td>
<td>0.2%</td>
<td>-11.9%</td>
</tr>
<tr>
<td class="firstcol">Mining</td>
<td>4.2%</td>
<td>1.4%</td>
<td>2.3%</td>
<td>36.4%</td>
<td>-1.3%</td>
<td>0.6%</td>
<td>5.9%</td>
<td>41.3%</td>
</tr>
<tr>
<td class="firstcol">Electricity &amp; Gas</td>
<td>3.8%</td>
<td>-11.4%</td>
<td>9.7%</td>
<td>3.7%</td>
<td>3.5%</td>
<td>-0.2%</td>
<td>4.2%</td>
<td>-8.0%</td>
</tr>
</tbody>
</table>
</div>
</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/080529h.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s retail sales have been floundering and in a downtrend
since 2005. But in December of 2007 and January of 2008 sales suddenly
spiked. They have since settled back down into the sleepy pattern we
have been used to. Indeed, sales are weakening sharply in 2008-Q2 after
a sales surge in 2008-Q1. Sales spiked to a 3.2% annual rate in Q1 on
the back of a 12.7% pace of sales in the auto sector. But in 2008-Q2
sales are starting out quite weak at an annual rate pace of -0.8%. Auto
sales are falling at a -2.7% annual rate. Fabric and apparel retail
sales are off at a 15.6% pace in the new quarter. The sales boom in
Japan appears to have been quite short-lived. 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col"> Japan Retail Sales Trends</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Yr-Ago</td>
<td>Q-to-Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Total SA</td>
<td>-0.1%</td>
<td>0.4%</td>
<td>-0.9%</td>
<td>-2.4%</td>
<td>-0.8%</td>
<td>0.4%</td>
<td>-0.8%</td>
<td>-0.8%</td>
</tr>
<tr>
<td class="firstcol" colspan="9">Not
seasonally adjusted</td>
</tr>
<tr class="odd">
<td class="firstcol">Total: Nominal</td>
<td>-0.8%</td>
<td>-2.4%</td>
<td>2.4%</td>
<td>-3.6%</td>
<td>-1.0%</td>
<td>0.1%</td>
<td>-3.1%</td>
<td>-9.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Motor Vehicles</td>
<td>1.6%</td>
<td>-1.4%</td>
<td>-3.2%</td>
<td>-11.5%</td>
<td>-2.0%</td>
<td>4.1%</td>
<td>-27.8%</td>
<td>-2.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Food &amp; Beverage</td>
<td>-0.5%</td>
<td>-0.5%</td>
<td>1.9%</td>
<td>3.8%</td>
<td>1.7%</td>
<td>0.6%</td>
<td>4.6%</td>
<td>-1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Fabric apparel &amp; access</td>
<td>-2.4%</td>
<td>-3.0%</td>
<td>5.0%</td>
<td>-2.3%</td>
<td>-1.1%</td>
<td>-2.5%</td>
<td>-6.4%</td>
<td>-15.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Rest of Retail</td>
<td>-1.3%</td>
<td>-3.7%</td>
<td>3.5%</td>
<td>-6.3%</td>
<td>-2.3%</td>
<td>-0.7%</td>
<td>-0.6%</td>
<td>-14.9%</td>
</tr>
</tbody>
</table>
</body></html>

Japan’s retail sales have been floundering and in a downtrend since 2005. But in December of 2007 and January of 2008 sales suddenly spiked. They have since settled back down into the sleepy pattern we have been used to. Indeed, sales [...]

Japan's Sales Wither After a Spike

<!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>
 




<div align="left"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080529e.jpg" align="left" border="0" height="265" width="353">

The EU overall sentiment reading fell to 96.7 in May from 98
in April. The EMU area&#8217;s overall index was unchanged in the month. For
the EU area, the industrial sector continues to be the relative
strongest. We gauge this NOT from the absolute index value for the
month but from its ranking for the month within its own range (see
percentile or rank column). The industrial sector has a raw reading of
-3 but a range percentile standing of 70.6 percent. In contrast the
services sector has a stronger looking +6 raw reading, but that reading
resides in the bottom 30 percentile of its range. Since sectors have
different intrinsic averages and volatility we view the percentiles as
a superior way to assess the readings across the various measures.
Comparisons to the mean also makes this clear since the service sector
mean is +16 compared to its current reading of +6 while for the
industrial sector the average reading is -7 and the current reading is
-3. 
 

Retail and construction sectors are in moderately good shape
at the border of the top third of their respective ranges, consumer
confidence is quite weak residing in the 44th percentile of its range. 
 

Country indices are uniformly lower, with Germany having the
relative best reading of this group in the 65th percentile of its range
followed by France in the 60th percentile of its range. Italy is in the
47th percentile of its range, even with the sharp jump in its sentiment
index this month. Spain is in the 25th percentile of its range and the
UK, a large EU (not EMU) member, stands in the 44th percentile of its
range. 
 

The components readings: The EU/EMU region is still having
some difficulty. The EMU sentiment indicator stalled this month but the
EU measure continued to fall at a fairly rapid pace. The service sector
has been moving sideways for several months, while consumer sentiment,
having steadied in earlier months, fell sharply in May, amid some very
weak component readings. For industry, confidence has stayed aloft
while most components are showing decay. The production expectation
reading is the weakest relative component in the industrial sector
survey. Retailing shows encroaching weakness in employment expectations
and in orders placed. For services all of the main components are
around the bottom third of their respective ranges. Construction is a
relatively solid sector with firm component readings in the top third
of their respective ranges. While the industrial sector has the highest
range readings its components look weaker. Time will tell how ell
Europe holds up as the strong euro continues to take a toll along with
ebbing financial distress and a weakening global environment. 

</div>


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="12" scope="col">EU
Sectors and Country level Overall Sentiment </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">EU</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>Mar 
08</td>
<td>Feb 
08</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
<td>R-SQ 
w/ 
Overall</td>
</tr>
<tr class="odd">
<td class="firstcol">Overall</td>
<td>96.7</td>
<td>98</td>
<td>101.9</td>
<td>100.3</td>
<td>54.7</td>
<td>132</td>
<td>116</td>
<td>73</td>
<td>43</td>
<td>100</td>
<td>1.00</td>
</tr>
<tr class="odd">
<td class="firstcol">Industrial</td>
<td>-3</td>
<td>-2</td>
<td>0</td>
<td>0</td>
<td>70.6</td>
<td>72</td>
<td>7</td>
<td>-27</td>
<td>34</td>
<td>-7</td>
<td>0.87</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Confidence</td>
<td>-14</td>
<td>-12</td>
<td>-11</td>
<td>-11</td>
<td>44.8</td>
<td>149</td>
<td>2</td>
<td>-27</td>
<td>29</td>
<td>-10</td>
<td>0.83</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail</td>
<td>-3</td>
<td>-6</td>
<td>1</td>
<td>1</td>
<td>66.7</td>
<td>48</td>
<td>6</td>
<td>-21</td>
<td>27</td>
<td>-6</td>
<td>0.47</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>-12</td>
<td>-11</td>
<td>-9</td>
<td>-7</td>
<td>66.7</td>
<td>83</td>
<td>3</td>
<td>-42</td>
<td>45</td>
<td>-17</td>
<td>0.42</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>6</td>
<td>6</td>
<td>11</td>
<td>6</td>
<td>31.6</td>
<td>104</td>
<td>32</td>
<td>-6</td>
<td>38</td>
<td>16</td>
<td>0.81</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>% m/m</td>
<td ="">&nbsp;</td>
<td>May 
08</td>
<td>Based
 
on 
Level</td>
<td colspan="4">Level</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">EMU</td>
<td>0.0%</td>
<td>-2.5%</td>
<td>-0.6%</td>
<td>97.1</td>
<td>54.6</td>
<td>123</td>
<td>117</td>
<td>73</td>
<td>44</td>
<td>99</td>
<td>0.95</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>0.2%</td>
<td>-1.2%</td>
<td>0.3%</td>
<td>103.0</td>
<td>65.1</td>
<td>83</td>
<td>116</td>
<td>79</td>
<td>37</td>
<td>99</td>
<td>0.73</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>-3.2%</td>
<td>-2.4%</td>
<td>0.0%</td>
<td>99.8</td>
<td>60.0</td>
<td>120</td>
<td>119</td>
<td>72</td>
<td>47</td>
<td>100</td>
<td>0.79</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>3.3%</td>
<td>-1.7%</td>
<td>-1.3%</td>
<td>95.1</td>
<td>47.6</td>
<td>144</td>
<td>121</td>
<td>71</td>
<td>50</td>
<td>100</td>
<td>0.79</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>-1.1%</td>
<td>-3.8%</td>
<td>-4.1%</td>
<td>79.8</td>
<td>25.5</td>
<td>194</td>
<td>118</td>
<td>67</td>
<td>51</td>
<td>100</td>
<td>0.62</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo:UK</td>
<td>-5.4%</td>
<td>-8.5%</td>
<td>10.7%</td>
<td>90.6</td>
<td>44.2</td>
<td>179</td>
<td>118</td>
<td>69</td>
<td>50</td>
<td>101</td>
<td>0.44</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Since 1990
except Services (Oct
1996) 208 - &nbsp;Count</td>
<td colspan="2">Services:</td>
<td colspan="3">126 -Count</td>
</tr>
<tr class="odd">
<td colspan="12" class="firstcol">Sentiment
is an index, sector
readings are net balance diffusion measures</td>
</tr>
</tbody>
</table>
</body></html>

The EU overall sentiment reading fell to 96.7 in May from 98 in April. The EMU area’s overall index was unchanged in the month. For the EU area, the industrial sector continues to be the relative strongest. We gauge this NOT from the [...]

EU Index is Still Sinking Fast…Inflation in EMU Still High

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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

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. 

London

Singapore

Tokyo

New York

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

251107F5.jpg

251107G5.jpg

Consumer credit outstanding increased $13.1 billion (2.3% y/y) in September after rising $3.1 billion in August, revised from $0.4 billion, and $17.7 billion in July, revised from $18.1 billion. A $10.0 billion rise had been expected in the Action Economics Forecast Survey.

Nonrevolving credit outstanding rose $11.4 billion (2.1% y/y) in September after increasing $9.2 billion in August, revised from $6.3 billion, and increasing $6.7 billion in July, revised from $6.9 billion. Nonrevolving credit held by depository institutions declined 6.8% y/y in September after falling 7.4% y/y in August. Finance company debt holdings fell 1.5% y/y after declining 1.3%, while credit union holdings rose an increased 12.8% y/y in September, the quickest growth since in two years. Nonrevolving debt of the federal government rose 3.6% y/y in September, the same as in August.

In September, revolving credit outstanding, which includes credit cards, rose $1.7 billion (2.6% y/y) after falling $6.1 billion in August, revised from a $6.0 billion decline, and rising $11.0 billion in July, revised from $11.2 billion. Revolving credit outstanding held by depository institutions fell 3.0% y/y. Revolving credit held by finance companies fell a steady 14.7% y/y in September, while credit union debt rose 4.5% y/y in September, up from 3.7% y/y in August.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

**AI and the Economy** is the title of today’s speech by Federal Reserve Vice Chair Philip N. Jefferson and it can be found [here](https://www.federalreserve.gov/newsevents/speech/jefferson20251107a.htm).

251107H5.jpg

251107I5.jpg

- Notable gain in credit usage follows prior month’s slowdown.
- Nonrevolving credit usage strengthens and revolving turns positive.

U.S. Consumer Credit Strengthens in September

251107A2.jpg

251107D2.jpg

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.1% during the four weeks ended November 7, 2025 after improving 0.3% in the prior four-week period. The index increased 0.5% y/y following a 0.8% y/y gain at the end of October.

Prices in the **Textile** group increased 2.5% during the last four weeks and rose 3.3% y/y. The cost of burlap increased 23.8% in the last four weeks while surging 48.1% over the last year. Showing modest improvement, cotton prices rose 0.9% in four weeks but declined 5.6% y/y.

**Metals** group prices increased 1.5% (5.9% y/y) in the last four weeks as the cost of aluminum rose 4.9	% (10.3% y/y). Zinc prices moved up 3.6% (5.4% y/y) and the cost of steel scrap rose 1.4% (-5.9% y/y). Lead prices increased 1.1% (-0.2% y/y) in four weeks and the cost of copper scrap rose 0.6% (13.9% y/y). Working lower, tin prices declined 2.2% (+13.8% y/y) in four weeks.

**Miscellaneous** group prices weakened 2.9% in the last four weeks and were off 1.0% y/y, as framing lumber prices fell 11.3% (-4.3% y/y). The cost of tallow, used for frying & baking, declined 9.0% (+10.5% y/y) in four weeks. Offsetting this weakness, natural rubber prices rose 2.0% in four weeks, but were off 6.6% y/y.

Prices in the **crude oil & benzene** group declined 1.6% (-10.8% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 2.2% in four weeks to $60.31 per barrel and declined 15.6% y/y. The price was increased from a low of $58.47 in the third week of last month. The price of the petro-chemical benzene fell 3.8% (-23.2% y/y) in four weeks.

**Excluding crude oil**, the industrial commodity price index was unchanged (+1.5% y/y) over the last four weeks after rising 0.5% during the prior four weeks.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

251107C2.jpg

251107B2.jpg

- Textile and metals prices strengthen.
- Framing lumber costs plummet.
- Crude oil prices weaken.

FIBER: Industrial Commodity Price Index Moves Sideways in Latest Four Weeks

251107E.jpg

The chart provides a good overview for German trade trend. The table breaks trade trends down by categories and provides growth rates on shorter horizons of 3 months, 6 months and 12 months. But the chart depicts the overarching trends well. It shows the German surplus being diminished on a gradual path and not altogether in a clear monotonic fashion. Export and import lines on the chart move mostly sideways (horizontal). The export line is below the import line since late last year. These two series plots on the right-hand scale and they depict growth rates (year-over-year). So sideways movements mean roughly steady growth. Exports have been growth steadily year-over-year at a weak pace that on occasion has been a decline in terms of their year-on-year value. Generally, the green line is in positive territory. The red import line has been stronger, indicating somewhat better, steadier import growth over the period.

While exports had a good September, export growth sequenced from 12-months to 6-months, to 3-months has been weakening. Imports also put in a strong September but are showing some erosion from 12-month to 6-months to 3-months in terms of annualized rates of growth. Still, import growth rates remain quite strong and consistent; the sense of erosion is clear but also moderate – it’s a moderate erosion in progress for imports.

Capital goods exports from Germany are improving- this observation is based on lagged data with a one-month lag built in. But consumer goods and vehicle exports are slowing and rather sharply- likely as a result of U.S. tariffs.

Import side trends, with the same lag, are not as clear cut. Capital goods imports are growing, and motor vehicle imports are improving and accelerating. Consumer goods imports have erratically slowed.

Real exports and imports on sequential lagged data show exports contracting on most horizons while imports generate consistent positive growth in real terms. There is a big difference in these two trends expressed in real terms.

On balance, German trade trends are shifting. The trade balance is gradually eroding. Change is in play.

251107.jpg

Germany

German Trade Surplus Shrinks Despite Strong Exports

Andrew Cates

**The global growth cycle**
The new orders-to-inventory spread in the global manufacturing PMI is often been viewed as one of the most reliable forward-looking indicators of the global economic cycle. When new orders are rising relative to inventories, it typically signals that demand is firming, production pipelines are beginning to refill, and industrial momentum is building. Conversely, when inventories accumulate faster than orders, it often foreshadows a slowdown. As the chart shows, this spread has been holding up relatively well in recent months, suggesting that despite ongoing headwinds—US tariff policies, uneven global demand, and geopolitical uncertainty—the underlying pulse of global manufacturing remains resilient.

251106Z1.jpg

**US credit standards**
The latest Senior Loan Officer Opinion Survey (SLOOS) from the Federal Reserve suggests that credit conditions remain tight but are no longer worsening, marking a tentative stabilization after several quarters of tightening. Banks reported modest easing in standards for some categories of corporate and commercial real estate loans, though mortgage lending remains constrained. Demand for business credit continues to soften, reflecting both higher borrowing costs and a cautious corporate outlook. Historically, periods of widespread tightening—like those seen in 2008 and 2020—have coincided with sharp rises in the private sector savings balance (a proxy for deleveraging), as firms and households retrench simultaneously. The current configuration, shown in the chart, indicates lingering deleveraging pressures, but not a collapse in credit availability.

251106Z2.jpg

**China**
Moving to China, the latest official and Caixin PMI releases for October painted a mixed picture of activity. Both manufacturing indices softened, suggesting that the industrial rebound which underpinned much of China’s recent growth may be losing some traction. The official non-manufacturing PMI, by contrast, edged higher, hinting at continued resilience in construction and public-sector-linked services, while the Caixin services measure—which tends to reflect smaller, private-sector firms—slipped modestly. The divergence underscores China’s two-speed recovery: industrial production and exports have carried the economy, while household spending and smaller enterprises remain subdued. If manufacturing momentum fades in the coming months, the economy could face a renewed loss of balance, with fewer reliable growth engines. Still, overall performance this year has surpassed expectations, and the government’s 5% growth target remains within reach, provided activity holds steady through year-end. Looking ahead, marginal policy support and improved external sentiment—helped by selective tariff relief from the US—could offer limited, though welcome, cushioning.

251106Z3.jpg

**Australia** 
In Australia, the RBA left the cash rate unchanged at its November meeting, maintaining a cautious stance amid a still-complex inflation and growth backdrop. The case for further easing has become less compelling as core inflation (trimmed mean CPI) remains above target and labour market conditions—while gradually softening—continue to show resilience. The unemployment rate has edged higher but remains low by historical standards, consistent with lingering wage and services price pressures. Recent data also hint at a tentative pickup in activity, supported by strong population growth and stabilising commodity exports. Against that backdrop, the RBA has stressed that the path for policy remains finely balanced, with a strong focus on incoming inflation data and global financial conditions. While downside risks persist—particularly from China’s slowdown and weak global trade—the persistence of domestic price pressures means the bar for renewed rate cuts remains relatively high.

251106Z4.jpg

**Argentina**
Turning to Argentina, markets continue to digest the implications of President Milei’s midterm election victory amid deepening economic and financial imbalances. The peso’s broad nominal effective exchange rate has remained under heavy pressure, extending its long-running slide as investors weigh the challenges of implementing fiscal consolidation and monetary reform in a fragile political and social environment. In stark contrast, the Buenos Aires stock index has surged to record highs, reflecting optimism that Milei’s reformist agenda—anchored in deregulation, privatisation, and fiscal restraint—may eventually stabilise the economy and attract renewed capital inflows. The divergence between a falling currency and soaring equity prices highlights the tension between near-term macro risks and longer-term reform hopes. Going forward, investor confidence will hinge on the government’s ability to deliver credible policy execution while managing the inflationary fallout from ongoing peso weakness.

251106Z5.jpg

**Global CO2 emissions**
Shifting focus to more structural issues, the chart underscores how decarbonisation challenges remain deeply concentrated in a few heavy-emitting sectors. Energy production alone accounts for nearly 40% of global CO₂ emissions, with manufacturing, households, and transport together contributing another 50%. This composition highlights the complex trade-offs of the energy transition: the very sectors that underpin modern living standards—power generation, industrial output, mobility, and housing—are also those most difficult to decarbonise. Climate change is therefore not just an environmental issue but a structural economic one, shaping investment, infrastructure, and pricing systems for decades to come. The tension between sustaining growth and cutting emissions will remain a defining challenge for policymakers, particularly as clean technologies face constraints in scaling fast enough to offset rising global demand for energy-intensive goods and services.

251106Z6.jpg

Recent financial market developments have been shaped by a renewed bout of volatility, with heightened concerns about stretched AI valuations triggering a big correction across parts of the tech sector. This comes against a backdrop of lingering uncertainty in Washington, where the US government shutdown has continued to delay the release of several key economic reports, clouding visibility on near-term momentum. Still, the broader macro signals offer a mixed but nuanced picture. Global manufacturing PMIs have continued to hold up, hinting that underlying industrial momentum remains resilient (chart 1). The latest US Senior Loan Officer Survey points to a stabilisation in credit conditions—banks remain cautious, but the most intense phase of tightening may have now passed (chart 2). In China, the October PMIs reflected renewed softness in manufacturing alongside a still-steady services sector, tentatively suggesting that growth may be rebalancing, albeit at a weaker aggregate pace of growth (chart 3). Australia’s inflation and labour market data, meanwhile, have complicated the case for near-term policy easing, with the RBA opting to stay on hold this week as core inflation remain sticky. In Argentina, currency weakness persists even as equity markets rally, highlighting the policy and market tension surrounding President Milei’s reform agenda (chart 5). And finally, at a more structural level, latest global emissions data serve as a reminder that energy, manufacturing, transport, and households remain the principal sources of CO₂—illustrating how the climate and energy transition will continue to shape the macro landscape well beyond the current economic cycle (chart 6).

Charts of the Week: Uneven But Unbroken

251106A8.jpg

251106B8.jpg

Initial claims for unemployment insurance fell 12,643 during the week ended October 25 to 219,520 (+0.6% y/y) and mostly reversed the prior week’s increase to 232,163. The four-week moving average of initial claims eased to 226,766 from 227,953. They have trended higher this year, after weakening late in 2024. The four-week average hit a low of 200,323 in January 2024.

Federal government employees initially filed 9,435 jobless insurance claims last week after 10,062 in the prior week. These figures are increased from 588 at the end of September.

Continuing claims for unemployment insurance rose to 1.957 million (5.5% y/y) in the week ended October 18 from 1.947 million in the prior week. The four-week moving average rose to 1.940 million from 1.931 million. It was the highest level since the last week of August.	

Federal government employees continuing benefits rose to 23,188 in the week ended October 18 from 14,472 in the prior week. These figures are increased from 8,680 at the end of September.

The insured unemployment rate varied greatly across individual states and territories. In the week ended October 18, the highest unemployment rates were in New Jersey (2.14%), Washington (2.03%), California (1.93%), Massachusetts (1.84%), the District of Columbia (1.86%) and Connecticut (1.70%). The lowest were in South Dakota (0.25%), Florida (0.36%), North Carolina & Louisiana (0.41%), Nebraska (0.44%) and Virginia (0.49%). Rates in other notable states include New York (1.51%), Illinois (1.50%), Pennsylvania (1.39%), and Texas (1.11%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.

251106C8.jpg

251106D8.jpg

- Decline in initial claims reverses earlier gain.
- Continuing claims move higher.
- State unemployment rates vary.

Economy in Brief: 2008

Jump to:

ISM Factory Sector Index Rose Unexpectedly; Level Still Indicates Contraction

Japan Industrial Sector in Steep Slowdown…or Worse

German Retail Sales by Sector

Michigan Consumer Sentiment Still the Lowest Since 1980

U.S. Income & Spending Rose Moderately in April; Real Income Flat

U.S. Income & Spending Rose Moderately in April; Real Income Flat

Japan's Sales Wither After a Spike

EU Index is Still Sinking Fast…Inflation in EMU Still High