Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508f.jpg" align="left" border="0" height="265" width="353">
German orders have taken some time to weaken since the euro
began climbing strongly. Arguably it is now a plethora of factors that
are dogging the trend including the strong euro but also the fallout
from the financial turmoil and the transmission of weakness from
faltering growth in the US and elsewhere &#8211; to extent that theses things
are different.

Orders both domestic and foreign have eased their pace from
their year ago growth rate and also sequentially through six-month and
three-month growth rates as well. Both domestic and foreign orders have
decelerated their pace. The quarterly readings show negative growth
rates for both domestic and foreign orders in 2008-Q1.

But this slowing has yet to hit the pace of sales. Sales
growth rates are still largely rising except for consumer goods &#8211;long
the Achilles Heel of this expansion. Capital goods sales have slowed
but are still strong in the Q1 period. Intermediate goods sales remain
relatively robust.

On balance the orders figure that tend to lead the cycle show
that he boom days in MFG are coming to a close. Since they are slowing
sharply and since growth rates have turned negative, they hint that the
slowdown could be severe.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col">German Orders and Sales By Sector and Origin </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-0.6%</td>
<td>-0.6%</td>
<td>-0.7%</td>
<td>-7.2%</td>
<td>-3.6%</td>
<td>5.1%</td>
<td>11.5%</td>
<td>-5.3%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>-0.4%</td>
<td>-1.1%</td>
<td>-0.4%</td>
<td>-7.6%</td>
<td>-3.9%</td>
<td>6.8%</td>
<td>12.7%</td>
<td>-9.6%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>-0.9%</td>
<td>0.0%</td>
<td>-0.9%</td>
<td>-6.6%</td>
<td>-3.4%</td>
<td>3.3%</td>
<td>10.4%</td>
<td>-0.2%</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="9">Sector Sales</td>
</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>-0.5%</td>
<td>-0.2%</td>
<td>2.1%</td>
<td>5.9%</td>
<td>2.9%</td>
<td>4.6%</td>
<td>9.3%</td>
<td>9.2%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>0.2%</td>
<td>-1.8%</td>
<td>1.0%</td>
<td>-2.3%</td>
<td>-1.1%</td>
<td>-0.7%</td>
<td>5.6%</td>
<td>-1.0%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-0.9%</td>
<td>-0.3%</td>
<td>0.8%</td>
<td>-1.6%</td>
<td>-0.8%</td>
<td>0.4%</td>
<td>5.1%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">Consumer Nondurables</td>
<td>0.4%</td>
<td>-2.0%</td>
<td>1.1%</td>
<td>-2.2%</td>
<td>-1.1%</td>
<td>-0.9%</td>
<td>5.9%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-2.7%</td>
<td>-0.8%</td>
<td>4.2%</td>
<td>2.7%</td>
<td>1.3%</td>
<td>5.4%</td>
<td>9.7%</td>
<td>10.9%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>1.9%</td>
<td>1.6%</td>
<td>0.2%</td>
<td>15.5%</td>
<td>7.5%</td>
<td>6.7%</td>
<td>11.2%</td>
<td>13.2%</td>
</tr>
<tr>
<td class="firstcol">All Manufacturing Sales</td>
<td>-0.5%</td>
<td>-0.2%</td>
<td>2.1%</td>
<td>5.7%</td>
<td>2.8%</td>
<td>4.1%</td>
<td>9.3%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
</body></html>

German orders have taken some time to weaken since the euro began climbing strongly. Arguably it is now a plethora of factors that are dogging the trend including the strong euro but also the fallout from the financial turmoil and the [...]

German Order Trends are Mostly Cycling Lower

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508e.jpg" align="left" border="0" height="265" width="353">
The chart on top shows that German growth trends are decaying
across the array of 3-Mo 6-Mo and 12-Mo rates. They are stratified so
that the they do point to some further decelerations but only barely.
Each growth rate series has a declining profile coming into the current
month. Even so on each horizon the rate of growth is still close to
4.0%, which for real output is still a fairly strong result.

Underneath the headlines we find that the trends and
underpinnings are notas bullet-proof. The trend for the output of
consumer goods is withering steadily with a three-month rate of growth
that is -1.1%. Capital goods output trends are accelerated with a
3-month growth rate 0f 7.5%. But intermediate goods growth has been
decelerating steadily. The capital goods result, while quite
solid-looking on its own should be looked upon with some suspicion
since the rate of the E-zone is slowing and capital goods investment
generally gets cut back in economic slowdowns. Clearly German IP trends
tell us that the consumer that Germany sells to are being less than
resilient.

Short term, however, trends are still quite bright. In 2008-Q1
all main (annualized) sector growth rates are at 3% or higher. Moreover
the quarter shows growth accelerations from the previous quarter for
output in consumer goods, capital goods and intermediate goods. Growth
rates per se are strong in the quarter: For capital goods the q/q
annualized rate of growth is 11.7% and for intermediate goods it is
9.2%. These figures exceed their current trend values and imply that Q1
GDP might overstate the developing trend.

Construction is up at a 49% pace in the quarter MFG IP is up
at a 9% pace but MFG orders are falling by 5.3%, one of the ominous
signals for growth ahead &#8211; but ahead of 2008Q1.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"> Total German IP</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</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>-0.5%</td>
<td>0.2%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>4.1%</td>
<td>4.6%</td>
<td>9.6%</td>
</tr>
<tr>
<td class="firstcol">Consumer goods</td>
<td>0.5%</td>
<td>-0.8%</td>
<td>0.0%</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>0.5%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Capital goods</td>
<td>-1.8%</td>
<td>-0.7%</td>
<td>4.5%</td>
<td>7.5%</td>
<td>5.9%</td>
<td>6.4%</td>
<td>11.7%</td>
</tr>
<tr>
<td class="firstcol">Intermediate goods</td>
<td>1.1%</td>
<td>1.2%</td>
<td>-1.3%</td>
<td>3.8%</td>
<td>6.4%</td>
<td>6.3%</td>
<td>9.2%</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">Construction</td>
<td>-12.3%</td>
<td>3.1%</td>
<td>11.4%</td>
<td>2.9%</td>
<td>2.4%</td>
<td>-4.0%</td>
<td>49.1%</td>
</tr>
<tr>
<td class="firstcol">MFG IP</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>1.2%</td>
<td>4.2%</td>
<td>4.8%</td>
<td>5.2%</td>
<td>9.0%</td>
</tr>
<tr>
<td class="firstcol">MFG Orders</td>
<td>-0.6%</td>
<td>-0.6%</td>
<td>-0.7%</td>
<td>-7.2%</td>
<td>6.0%</td>
<td>5.1%</td>
<td>-5.3%</td>
</tr>
</tbody>
</table>
</body></html>

The chart on top shows that German growth trends are decaying across the array of 3-Mo 6-Mo and 12-Mo rates. They are stratified so that the they do point to some further decelerations but only barely. Each growth rate series has a [...]

IP Trends in Germany Begin to Decay

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508c.jpg" width="353">
Consumer credit outstanding rose $15.3B during March after an upwardly revised $6.6B February increase. The gain was more than twice the rise that was generally expected.
On a percentage basis, the change in consumer credit over the last three months averaged 5.5% (AR), about the same as during all of 2007.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508d.jpg" width="353">
Revolving credit outstanding rose $6.3B, nearly twice the February increase. The three month growth rate, however, fell slightly to 6.9% from 7.5% last year.
Non-revolving credit, which accounts for nearly two thirds of total consumer credit, increased more sharply last month by $9.0B after an upwardly revised $2.6B February gain. The three month annualized average growth rate, however, was stable with last year&#39;s 4.7% increase though that was up from a 1.2% low at the end of last year.
These figures are the major input to the Fed&#39;s Flow of Funds accounts for the household sector, released quarterly.
The Recession Dating Procedure from the National Bureau of Economic Research (NBER) can be found <a href="http://www.nber.org/cycles/recessions.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Consumer Credit (m/m Chg, SAAR)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$15.3B</td>
<td>&nbsp;$6.6B</td>
<td>5.9%</td>
<td>5.7%</td>
<td>4.5%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$6.3B</td>
<td>$3.9B</td>
<td>7.9%</td>
<td>7.5%</td>
<td>6.1%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$9.0B</td>
<td>$2.6B</td>
<td>4.7%</td>
<td>4.7%</td>
<td>3.6%</td>
<td>4.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumer credit outstanding rose $15.3B during March after an upwardly revised $6.6B February increase. The gain was more than twice the rise that was generally expected. On a percentage basis, the change in consumer credit over the [...]

U.S. Consumer Credit Growth Up in March, Stable With 2007

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508a.jpg" width="353">
Last week&#39;s initial claims for unemployment insurance continued the recent up/down pattern, with an upward drift, of the last several periods. They fell by 18,000 to 365,000 after an upwardly revised 38,000 increase during the prior week. Consensus expectations had been for claims to total 375,000 last week.
The four week moving average of initial claims rose slightly week-to-week to 367,000 (17.0% y/y) after claims averaged 365,000 during April.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508b.jpg" width="353">
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.
Continuing claims for unemployment insurance fell 10,000 after an upwardly revised 84,000 worker increase during the prior week. The latest level was near its highest since early 2004 and it provides some indication of workers&#39; ability to find employment.
The continuing claims numbers lag the initial claims figures by one week.
Initial claims for the week ended April 26 increased the most in Massachusetts, New York, Kentucky, New Jersey and Michigan. The largest decreases occurred in Texas, Rhode Island, California, Pennsylvania and Connecticut.
The insured rate of unemployment held steady at 2.3% for the second week. The latest also was the highest since 2004.
Mitigating the Impact of Foreclosures on Neighborhoods is yesterday&#39;s speech by Fed Governor Randall Kroszner and it is available <a href="http://www.federalreserve.gov/newsevents/speech/kroszner20080507a.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">05/03/08</th>
<th scope="col">04/26/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;365</td>
<td>383</td>
<td>22.9%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,020</td>
<td>19.4%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>


</html>

Last week's initial claims for unemployment insurance continued the recent up/down pattern, with an upward drift, of the last several periods. They fell by 18,000 to 365,000 after an upwardly revised 38,000 increase during the prior [...]

U.S. Initial Jobless Insurance Claims Dip

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508c.jpg" align="left" border="0" height="265" width="353">
Consumer credit outstanding rose $15.3B during March after an
upwardly revised $6.6B February increase. The gain was more than twice
the rise that was generally expected.
On a percentage basis, the change in consumer credit over the
last three months averaged 5.5% (AR), about the same as during all of
2007.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508d.jpg" align="right" border="0" height="265" width="353">
Revolving credit outstanding rose $6.3B, nearly twice the
February increase. The three month growth rate, however, fell slightly
to 6.9% from 7.5% last year.
Non-revolving credit, which accounts for nearly two thirds of
total consumer credit, increased more sharply last month by $9.0B after
an upwardly revised $2.6B February gain. The three month annualized
average growth rate, however, was stable with last year's 4.7% increase
though that was up from a 1.2% low at the end of last year.
These figures are the major input to the Fed's Flow of Funds
accounts for the household sector, released quarterly.
The Recession Dating Procedure from the
National Bureau of Economic Research (NBER) can be found <a href="http://www.nber.org/cycles/recessions.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Consumer
Credit (m/m Chg, SAAR)</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$15.3B</td>
<td>&nbsp;$6.6B</td>
<td>5.9%</td>
<td>5.7%</td>
<td>4.5%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$6.3B</td>
<td>$3.9B</td>
<td>7.9%</td>
<td>7.5%</td>
<td>6.1%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$9.0B</td>
<td>$2.6B</td>
<td>4.7%</td>
<td>4.7%</td>
<td>3.6%</td>
<td>4.9%</td>
</tr>
</tbody>
</table>
U.S. Initial Jobless Insurance
Claims Dip 
by <a href="/comment/Moeller.html">Tom
Moeller</a> May 8, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508a.jpg" align="left" border="0" height="265" width="353">
Last week's initial claims for unemployment insurance
continued the recent up/down pattern, with an upward drift, of the last
several periods. They fell by 18,000 to 365,000 after an upwardly
revised 38,000 increase during the prior week. Consensus expectations
had been for claims to total 375,000 last week.
The four week moving average of initial claims rose slightly
week-to-week to 367,000 (17.0% y/y) after claims averaged 365,000
during April.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508b.jpg" align="right" border="0" height="265" width="353">
A claims level below 400,000 typically has been associated
with growth in nonfarm payrolls. During the last ten years there has
been a (negative) 76% correlation between the level of initial claims
and the m/m change in nonfarm payroll employment.
Continuing claims for unemployment insurance fell 10,000 after
an upwardly revised 84,000 worker increase during the prior week. The
latest level was near its highest since early 2004 and it provides some
indication of workers' ability to find employment.
The continuing claims numbers lag the initial claims figures
by one week.
Initial claims for the week ended April 26 increased the most
in Massachusetts, New York, Kentucky, New Jersey and Michigan. The
largest decreases occurred in Texas, Rhode Island, California,
Pennsylvania and Connecticut.
The insured rate of unemployment held steady at 2.3% for the
second week. The latest also was the highest since 2004.
Mitigating the Impact of Foreclosures on
Neighborhoods is yesterday's speech by Fed Governor Randall
Kroszner and it is available <a href="http://www.federalreserve.gov/newsevents/speech/kroszner20080507a.htm">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">05/03/08</th>
<th scope="col">04/26/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;365</td>
<td>383</td>
<td>22.9%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,020</td>
<td>19.4%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
IP Trends in Germany Begin to Decay 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 8, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508e.jpg" align="left" border="0" height="265" width="353">
The chart on top shows that German growth trends are decaying
across the array of 3-Mo 6-Mo and 12-Mo rates. They are stratified so
that the they do point to some further decelerations but only barely.
Each growth rate series has a declining profile coming into the current
month. Even so on each horizon the rate of growth is still close to
4.0%, which for real output is still a fairly strong result.

Underneath the headlines we find that the trends and
underpinnings are notas bullet-proof. The trend for the output of
consumer goods is withering steadily with a three-month rate of growth
that is -1.1%. Capital goods output trends are accelerated with a
3-month growth rate 0f 7.5%. But intermediate goods growth has been
decelerating steadily. The capital goods result, while quite
solid-looking on its own should be looked upon with some suspicion
since the rate of the E-zone is slowing and capital goods investment
generally gets cut back in economic slowdowns. Clearly German IP trends
tell us that the consumer that Germany sells to are being less than
resilient.

Short term, however, trends are still quite bright. In 2008-Q1
all main (annualized) sector growth rates are at 3% or higher. Moreover
the quarter shows growth accelerations from the previous quarter for
output in consumer goods, capital goods and intermediate goods. Growth
rates per se are strong in the quarter: For capital goods the q/q
annualized rate of growth is 11.7% and for intermediate goods it is
9.2%. These figures exceed their current trend values and imply that Q1
GDP might overstate the developing trend.

Construction is up at a 49% pace in the quarter MFG IP is up
at a 9% pace but MFG orders are falling by 5.3%, one of the ominous
signals for growth ahead &#8211; but ahead of 2008Q1.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> Total
German IP</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</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>-0.5%</td>
<td>0.2%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>4.1%</td>
<td>4.6%</td>
<td>9.6%</td>
</tr>
<tr>
<td class="firstcol">Consumer goods</td>
<td>0.5%</td>
<td>-0.8%</td>
<td>0.0%</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>0.5%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Capital goods</td>
<td>-1.8%</td>
<td>-0.7%</td>
<td>4.5%</td>
<td>7.5%</td>
<td>5.9%</td>
<td>6.4%</td>
<td>11.7%</td>
</tr>
<tr>
<td class="firstcol">Intermediate goods</td>
<td>1.1%</td>
<td>1.2%</td>
<td>-1.3%</td>
<td>3.8%</td>
<td>6.4%</td>
<td>6.3%</td>
<td>9.2%</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">Construction</td>
<td>-12.3%</td>
<td>3.1%</td>
<td>11.4%</td>
<td>2.9%</td>
<td>2.4%</td>
<td>-4.0%</td>
<td>49.1%</td>
</tr>
<tr>
<td class="firstcol">MFG IP</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>1.2%</td>
<td>4.2%</td>
<td>4.8%</td>
<td>5.2%</td>
<td>9.0%</td>
</tr>
<tr>
<td class="firstcol">MFG Orders</td>
<td>-0.6%</td>
<td>-0.6%</td>
<td>-0.7%</td>
<td>-7.2%</td>
<td>6.0%</td>
<td>5.1%</td>
<td>-5.3%</td>
</tr>
</tbody>
</table>
German Order Trends are Mostly
Cycling Lower 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 8, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508f.jpg" align="left" border="0" height="265" width="353">
German orders have taken some time to weaken since the euro
began climbing strongly. Arguably it is now a plethora of factors that
are dogging the trend including the strong euro but also the fallout
from the financial turmoil and the transmission of weakness from
faltering growth in the US and elsewhere &#8211; to extent that theses things
are different.

Orders both domestic and foreign have eased their pace from
their year ago growth rate and also sequentially through six-month and
three-month growth rates as well. Both domestic and foreign orders have
decelerated their pace. The quarterly readings show negative growth
rates for both domestic and foreign orders in 2008-Q1.

But this slowing has yet to hit the pace of sales. Sales
growth rates are still largely rising except for consumer goods &#8211;long
the Achilles Heel of this expansion. Capital goods sales have slowed
but are still strong in the Q1 period. Intermediate goods sales remain
relatively robust.

On balance the orders figure that tend to lead the cycle show
that he boom days in MFG are coming to a close. Since they are slowing
sharply and since growth rates have turned negative, they hint that the
slowdown could be severe.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col">German
Orders and Sales By Sector and Origin </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-0.6%</td>
<td>-0.6%</td>
<td>-0.7%</td>
<td>-7.2%</td>
<td>-3.6%</td>
<td>5.1%</td>
<td>11.5%</td>
<td>-5.3%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>-0.4%</td>
<td>-1.1%</td>
<td>-0.4%</td>
<td>-7.6%</td>
<td>-3.9%</td>
<td>6.8%</td>
<td>12.7%</td>
<td>-9.6%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>-0.9%</td>
<td>0.0%</td>
<td>-0.9%</td>
<td>-6.6%</td>
<td>-3.4%</td>
<td>3.3%</td>
<td>10.4%</td>
<td>-0.2%</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="9">Sector
Sales</td>
</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>-0.5%</td>
<td>-0.2%</td>
<td>2.1%</td>
<td>5.9%</td>
<td>2.9%</td>
<td>4.6%</td>
<td>9.3%</td>
<td>9.2%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>0.2%</td>
<td>-1.8%</td>
<td>1.0%</td>
<td>-2.3%</td>
<td>-1.1%</td>
<td>-0.7%</td>
<td>5.6%</td>
<td>-1.0%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-0.9%</td>
<td>-0.3%</td>
<td>0.8%</td>
<td>-1.6%</td>
<td>-0.8%</td>
<td>0.4%</td>
<td>5.1%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">Consumer Nondurables</td>
<td>0.4%</td>
<td>-2.0%</td>
<td>1.1%</td>
<td>-2.2%</td>
<td>-1.1%</td>
<td>-0.9%</td>
<td>5.9%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-2.7%</td>
<td>-0.8%</td>
<td>4.2%</td>
<td>2.7%</td>
<td>1.3%</td>
<td>5.4%</td>
<td>9.7%</td>
<td>10.9%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>1.9%</td>
<td>1.6%</td>
<td>0.2%</td>
<td>15.5%</td>
<td>7.5%</td>
<td>6.7%</td>
<td>11.2%</td>
<td>13.2%</td>
</tr>
<tr>
<td class="firstcol">All Manufacturing Sales</td>
<td>-0.5%</td>
<td>-0.2%</td>
<td>2.1%</td>
<td>5.7%</td>
<td>2.8%</td>
<td>4.1%</td>
<td>9.3%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
</body></html>

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080507c.jpg" width="353">
The National Association of Realtors reported that the level of pending sales of existing homes fell an expected 1.0% after a deepened 2.8% February decline. Sales during 1Q08 were down 11.9% from the average sales level in 2007.
These figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed.
Sales in the West fell by 1.4% for the second month following a 13.0% spurt in January. That improvement was accompanied by a 12.5% surge in sales in the Northeast. Sales in the South ticked lower by 0.1% but sales are down 38.8% from their 2005 peak. In the Midwest March sales collapsed 10.4% m/m after a 3.7% February drop.
The Realtors also indicated in an earlier report that the number of homes on the market &amp; available for sale rose 1.0% in March (6.6% y/y). At the current sales rate there was a 9.9 months&#39; supply of homes on the market versus an 8.9 months&#39; average during all of last year, a 6.5 months&#39; supply in 2006 and a 4.5 months&#39; supply in 2005.
The pending home sales data are available in Haver&#39;s PREALTOR database and the number of homes on the market are in the REALTOR 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/WEEKLY/@W5/@W507/@W507.HTM">Pending Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>83.0</td>
<td>&nbsp;83.8</td>
<td>&nbsp;&nbsp; -20.1%</td>
<td>95.7</td>
<td>112.1&nbsp;</td>
<td>124.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>80.8</td>
<td>71.8</td>
<td>-15.4</td>
<td>85.6</td>
<td>98.5</td>
<td>108.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>74.1</td>
<td>82.7</td>
<td>-22.3</td>
<td>89.6</td>
<td>102.0</td>
<td>116.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>84.9</td>
<td>85.0</td>
<td>-26.8</td>
<td>107.3</td>
<td>127.3</td>
<td>134.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>91.2</td>
<td>92.5</td>
<td>-9.4</td>
<td>92.1</td>
<td>109.5</td>
<td>128.6</td>
</tr>
</tbody>
</table>
</body>
</html>

The National Association of Realtors reported that the level of pending sales of existing homes fell an expected 1.0% after a deepened 2.8% February decline. Sales during 1Q08 were down 11.9% from the average sales level in 2007. [...]

U.S. Pending Home Sales Again Fell in March, As Expected

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080507a.jpg" width="353">
Nonfarm labor productivity rose 2.2% last quarter after 1.8% growth during 4Q07. The latest gain was slightly stronger than the expected 1.8% figure and at 3.2%, the year-to-year rise in productivity was the firmest since early 2004.
Productivity&#39;s strength stemmed from a 1.8% (-0.6% y/y) decline in total hours worked which was the fourth decline in the last five quarters. That decline was accompanied by a 0.4% (2.6% y/y) rise in output which was hardly improved from the 0.2% increase during 4Q07.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080507b.jpg" width="353">
Compensation per hour rose a firm 4.4% rate last quarter. The year-to-year growth decelerated, however, to 3.4% from 4.9% during all of last year. Outsized quarterly growth in compensation late in &#39;06 and early in &#39;07, between 6% and 12%, drove the growth in 2007 compensation up.
Unit labor costs growth was contained, as a result of the firm productivity gain, to 2.2% versus 2.8% growth during 4Q&#39;07. Year-to- year, the growth in costs fell to a meager 0.2%, the slowest rate of growth since a slight decline early in 2004. Unit nonlabor payments (which account for roughly one third of total costs) did rise 2.2% (3.5% y/y) after a slight decline in 4Q.
In the factory sector, productivity rose at a steady 4.1% (4.1% y/y) rate. Unit labor costs did rise 2.5% on a quarterly basis but earlier quarterly declines held the annual change to a negative -1.3%.
Productivity, Energy Prices, and the Great Moderation: a New Link is from the Federal Reserve Bank of Atlanta and it can be found <a href="http://www.frbatlanta.org/filelegacydocs/wp0811.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/USECON/@EC/@EC02/@EC02.HTM">Nonfarm Business Sector</a> (SAAR, %)</th>
<th scope="col">Q1 &#39;08</th>
<th scope="col">Q4 &#39;07</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">Output per Hour</td>
<td>2.2</td>
<td>1.8</td>
<td>3.2</td>
<td>1.8</td>
<td>1.0</td>
<td>1.9</td>
</tr>
<tr>
<td class="firstcol">Compensation per Hour</td>
<td>4.4</td>
<td>4.6</td>
<td>3.4</td>
<td>4.9</td>
<td>3.9</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>2.2</td>
<td>2.8</td>
<td>0.2</td>
<td>3.1</td>
<td>2.9</td>
<td>2.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Nonfarm labor productivity rose 2.2% last quarter after 1.8% growth during 4Q07. The latest gain was slightly stronger than the expected 1.8% figure and at 3.2%, the year-to-year rise in productivity was the firmest since early 2004. [...]

U.S. Productivity Growth Firm, Unit Labor Costs Contained

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080507a.jpg" width="353">
Nonfarm labor productivity rose 2.2% last quarter after 1.8% growth during 4Q07. The latest gain was slightly stronger than the expected 1.8% figure and at 3.2%, the year- to- year rise in productivity was the firmest since early 2004.
Productivity&#39;s strength stemmed from a 1.8% (-0.6% y/y) decline in total hours worked which was the fourth decline in the last five quarters. That decline was accompanied by a 0.4% (2.6% y/y) rise in output which was hardly improved from the 0.2% increase during 4Q07.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080507b.jpg" width="353">
Compensation per hour rose a firm 4.4% rate last quarter. The year- to- year growth decelerated, however, to 3.4% from 4.9% during all of last year. Outsized quarterly growth in compensation late in &#39;06 and early in &#39;07, between 6% and 12%, drove the growth in 2007 compensation up.
Unit labor costs growth was contained, as a result of the firm productivity gain, to 2.2% versus 2.8% growth during 4Q&#39;07. Year- to- year, the growth in costs fell to a meager 0.2%, the slowest rate of growth since a slight decline early in 2004. Unit nonlabor payments (which account for roughly one third of total costs) did rise 2.2% (3.5% y/y) after a slight decline in 4Q.
In the factory sector, productivity rose at a steady 4.1% (4.1% y/y) rate. Unit labor costs did rise 2.5% on a quarterly basis but earlier quarterly declines held the annual change to a negative -1.3%.
Productivity, Energy Prices, and the Great Moderation: a New Link is from the Federal Reserve Bank of Atlanta and it can be found <a href="http://www.frbatlanta.org/filelegacydocs/wp0811.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/USECON/@EC/@EC02/@EC02.HTM">Nonfarm Business Sector</a> (SAAR, %)</th>
<th scope="col">Q1 &#39;08</th>
<th scope="col">Q4 &#39;07</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">Output per Hour</td>
<td>2.2</td>
<td>1.8</td>
<td>3.2</td>
<td>1.8</td>
<td>1.0</td>
<td>1.9</td>
</tr>
<tr>
<td class="firstcol">Compensation per Hour</td>
<td>4.4</td>
<td>4.6</td>
<td>3.4</td>
<td>4.9</td>
<td>3.9</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>2.2</td>
<td>2.8</td>
<td>0.2</td>
<td>3.1</td>
<td>2.9</td>
<td>2.0</td>
</tr>
</tbody>
</table>
U.S. Pending Home Sales Again Fell in March, As Expected 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 7, 2008


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080507c.jpg" width="353">
The National Association of Realtors reported that the level of pending sales of existing homes fell an expected 1.0% after a deepened 2.8% February decline. Sales during 1Q08 were down 11.9% from the average sales level in 2007.
These figures are analogous to the new home sales data from the Commerce Department in that they measure existing home sales when the sales contract is signed, not at the time the sale is closed.
Sales in the West fell by 1.4% for the second month following a 13.0% spurt in January. That improvement was accompanied by a 12.5% surge in sales in the Northeast. Sales in the South ticked lower by 0.1% but sales are down 38.8% from their 2005 peak. In the Midwest March sales collapsed 10.4% m/m after a 3.7% February drop.
The Realtors also indicated in an earlier report that the number of homes on the market &amp; available for sale rose 1.0% in March (6.6% y/y). At the current sales rate there was a 9.9 months&#39; supply of homes on the market versus an 8.9 months&#39; average during all of last year, a 6.5 months&#39; supply in 2006 and a 4.5 months&#39; supply in 2005.
The pending home sales data are available in Haver&#39;s PREALTOR database and the number of homes on the market are in the REALTOR 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/WEEKLY/@W5/@W507/@W507.HTM">Pending Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>83.0</td>
<td>&nbsp;83.8</td>
<td>&nbsp;&nbsp; -20.1%</td>
<td>95.7</td>
<td>112.1&nbsp;</td>
<td>124.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>80.8</td>
<td>71.8</td>
<td>-15.4</td>
<td>85.6</td>
<td>98.5</td>
<td>108.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>74.1</td>
<td>82.7</td>
<td>-22.3</td>
<td>89.6</td>
<td>102.0</td>
<td>116.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>84.9</td>
<td>85.0</td>
<td>-26.8</td>
<td>107.3</td>
<td>127.3</td>
<td>134.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>91.2</td>
<td>92.5</td>
<td>-9.4</td>
<td>92.1</td>
<td>109.5</td>
<td>128.6</td>
</tr>
</tbody>
</table>
</body>
</html>

Nonfarm labor productivity rose 2.2% last quarter after 1.8% growth during 4Q07. The latest gain was slightly stronger than the expected 1.8% figure and at 3.2%, the year- to- year rise in productivity was the firmest since early [...]

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

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Initial claims for unemployment insurance rose 9,379 during the week ended November 1 to 228,899 (3.4% y/y) and mostly reversed the prior week’s 12,643 decline to 219,520. The four-week moving average of initial claims eased to 225,213 from 226,766. The four-week average hit a low of 200,323 in January 2024.

Federal government employees filed 7,482 initial jobless insurance claims last week after 9,435 in the prior week. These figures are increased from 588 at the end of September.

Continuing claims for unemployment insurance rose to 1.964 million (4.4% y/y) in the week ended October 25 from 1.957 million in the prior week. The four-week moving average rose to 1.949 million from 1.940 million. It was the highest level since the last week of August.

Federal government employees continuing benefits rose to 30,649 in the week ended October 25 from 23,188 in the prior week. These figures are increased from 8,676 at the end of September.

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.

- Increase in initial claims reverses most of earlier decline.
- Continuing claims continue to increase.

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

Tian Yong Woon

This week, we review key developments across several Asian economies as the year nears its close. On balance, many of investors’ and policymakers’ worst fears did not materialize. Despite US tariffs, regional exports have shown resilience (chart 1), partly supported by stronger intra-Asia trade, even as exports to the US declined in some cases.

In China, factors including importer front-loading, stronger exports to non-US markets, and government efforts to boost consumption—albeit with potentially one-off effects—have kept the economy on track to meet its 5% growth target this year (chart 2), barring a substantial slowdown in Q4. In Japan, political uncertainty has eased following Prime Minister Takaichi’s rise, though her pro-growth, pro-loose monetary stance has contributed to further yen weakness (chart 3). India, while still likely Asia’s fastest-growing major economy this year, has seen trade setbacks (chart 4) as US–India discussions continue, though recent progress suggests a deal may be near.

However, not all developments in Asia have avoided worst-case outcomes. For example, the Philippines, which has already been hit by a string of storms this year, continues to reel from the effects of Typhoons Fung-wong and Kalmaegi. These storms have highlighted corruption in the Philippines’ flood control systems, rattling investors and pressuring the peso (chart 5), in a manner reminiscent of the rupiah’s decline during Indonesia’s political turmoil earlier this year. In Thailand, political uncertainty continues ahead of general elections eyed at next March, while the expected full return of Chinese tourists has yet to materialize (chart 6).

**Trade in Asia**
For Asia, the year has ultimately not played out as bleakly as investors once feared, particularly on the trade front. Despite US President Trump’s tariffs and a persistent backdrop of uncertainty, export performance in several Asian economies has proven more resilient than expected. This is most clearly reflected in export growth readings for China and key Southeast Asian economies (chart 1), which have remained firm—and at times exceeded expectations—even as China’s shipments to the US fell sharply. Much of this resilience reflects a redirection of exports toward other markets, often within the region. India, however, has seen more limited gains, with exports in US dollar terms struggling to materially surpass last year’s levels.

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**China**
Among the main investor concerns earlier this year was China, which once again came under close scrutiny as President Trump sought to address issues ranging from the large US–China trade imbalance to intensifying AI competition and perceived overcapacity. Yet China’s growth—particularly on the export front—has proven more resilient than expected, with increased shipments to other markets more than offsetting reduced trade with the US. Earlier front-loading by importers ahead of anticipated tariff hikes also temporarily supported export figures. Domestically, government initiatives to stimulate consumption led to a brief lift in retail spending, though signs suggest these effects may be fading, indicating their largely one-off nature. Even so, China has maintained year-to-date growth above its 5% annual target (chart 2), keeping that goal within reach provided momentum does not weaken significantly in Q4. Meanwhile, the more conciliatory tone in recent US–China discussions, including the halving of US fentanyl-related tariffs, offers a modest further relief. That said, longer-term structural issues still loom, including the difficult shift toward a more consumption-led economy, demographic pressures, and questions around sustained overcapacity in key industries.

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**Japan**
In Japan, the political uncertainty that followed the Liberal Democratic Party’s weak election performances earlier in the year has largely eased with Takaichi’s appointment as the country’s first female Prime Minister. Attention now turns to her supplementary budget—reported to be around $65 billion—which aims to address the rising cost of living while also bolstering defence and diplomatic capabilities. Investors, however, are already contemplating the policy implications. In particular, expectations that Takaichi’s agenda could make it harder for the Bank of Japan to pursue further significant tightening have added renewed pressure on the yen, pushing it to multi-year lows (chart 3). And while a weaker yen could, in theory, support tourism, forthcoming measures to curb overtourism—such as Kyoto’s planned 900% increase in accommodation taxes—may act as offsetting factors.

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**India**
Turning to India, the economy remains on track to be the region’s fastest-growing major economy. Growth forecasts were downgraded earlier in the year by the IMF and Blue Chip survey panellists, but these revisions were later reversed. These early-year downgrades reflected India’s heavy exposure to US trade, a concern that materialized when the US raised its reciprocal tariff rate on India from 25% to 50%. This contrasts with the situation of many other Asian economies, who successfully negotiated lower rates below the “Liberation Day” baseline. Although India managed to expand exports to other trading partners, this gain resulted in only a muted net impact on overall exports and, in turn, GDP growth. That said, US–India discussions have made some progress over the year, particularly on previously contentious issues such as India’s purchases of Russian crude. While these developments bring India closer to a potential trade deal, the benefits are likely to materialize beyond this year, meaning current growth readings still largely reflect the impact of the steep US tariffs in place today.

251110T4.jpg

**The Philippines**
Moving to the Philippines, the country is grappling with the impact of Typhoon Fung-wong, which struck the northern regions on Sunday, forcing over a million people to evacuate and causing widespread landslides and damaged roads. Fung-wong follows a string of storms this year, including Typhoon Kalmaegi, which also inflicted substantial damage just a few days ago. The disasters have reignited concerns over longstanding corruption in the country’s flood control systems, spooking investors and prompting capital outflows, which have weighed on the Philippine peso (chart 5). The currency’s weakness has been compounded by the central bank’s ongoing easing, which has cut the policy rate from last year’s peak of 6.5% to 4.75%—nearly 200 basis points—and with markets still pricing in further cuts.

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**Thailand**
Lastly, Thailand’s economy continues to struggle to regain the footing it had before the pandemic, weighed down by both domestic and external factors. Politically, the country remains in a transitional phase, with new Prime Minister Anutin under scrutiny to deliver on his pledge to hold general elections soon. Deputy Prime Minister indications suggest March 29, 2026 as a likely date, leaving a period of uncertainty in the meantime, as the durability of policies enacted during this interim phase remains unclear. Externally, tourism—which should have been a key growth driver—has underperformed, as the return of Chinese visitors to pre-pandemic levels did not materialize, partly due to tourism-related scares. In contrast, Vietnam appears to have captured a larger share of Chinese tourists this year (chart 6).

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Asia

Economic Letter from Asia: As the Dust Settles

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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).

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- 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

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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.

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

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

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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.

Economy in Brief: 2008

Jump to:

German Order Trends are Mostly Cycling Lower

IP Trends in Germany Begin to Decay

U.S. Consumer Credit Growth Up in March, Stable With 2007

U.S. Initial Jobless Insurance Claims Dip

U.S. Consumer Credit Growth Up in March, Stable With 2007

U.S. Pending Home Sales Again Fell in March, As Expected

U.S. Productivity Growth Firm, Unit Labor Costs Contained

U.S. Productivity Growth Firm, Unit Labor Costs Contained