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/100106k.jpg" align="right" border="0" height="265" width="353">
Labor market
improvement is counted as fewer jobs lost and more jobs gained. Both
were indicated for December by the outplacement firm of Challenger,
Grey &amp; Christmas Their measure of job cut announcements fell
last month to 45,094, compared to a high of 241,748 in January of last
year. The latest reading was the least number of layoffs since December
2007. Layoffs moderated in the construction, consumer goods, financial,
health care, retail, services and transportation industries. They rose
in the apparel and in the industrial goods industries.
Challenger also samples firms' hiring plans. During December plans
recouped the November decline and were more than triple the year-ago
level.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106l.jpg" align="right" border="0" height="265" width="353">
Plans picked up sharply in the financial and aerospace/defense
industries but more moderately in the government and insurance
industries. The net of hires less layoffs was near its least 2007.
During the last ten years there has been a 67% (inverse) correlation
between the three-month moving average of announced job cuts and the
three-month change payroll employment. Job cut
announcements differ from layoffs. Many are achieved through attrition,
early retirement or just never occur. The Challenger figures are
available in Haver's SURVEYS database.The
Recession in Perspective from the Federal Reserve Bank of
Minneapolis can be found <a href="http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM" style="color: rgb(0, 0, 0);">Challenger, Gray
&amp; Christmas</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>45,094</td>
<td>50,349</td>
<td>55,679</td>
<td>-72.9%</td>
<td>1,288,030</td>
<td>1,223,993</td>
<td>768,264</td>
</tr>
<tr>
<td class="firstcol">Announced Hiring Plans</td>
<td>35,592</td>
<td>10,076</td>
<td>57,520</td>
<td>253.0</td>
<td>272,573</td>
<td>118,600</td>
<td>365,583</td>
</tr>
</tbody>
</table>
</body></html>

Labor market improvement is counted as fewer jobs lost and more jobs gained. Both were indicated for December by the outplacement firm of Challenger, Grey & Christmas Their measure of job cut announcements fell last month to 45,094, [...]

Challenger Indicates Further Improvement in the Labor Market

<!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/100106h.jpg" align="right" border="0" height="265" width="353">
The
nonmanufacturing sector has improved from its worst condition at
year-end 2008 but it has yet to show much expansion. The December
figure from the Institute for Supply Management (ISM) for the service
&amp; construction sectors improved to 50.1 last month
from&nbsp; below the break-even level of 50 during November. The
latest fell just short of Consensus&nbsp; expectations. For the
year as a whole the index reading of 46.3 was the lowest in the series'
history. Since the series' inception in 1997 there has been a 64%
correlation between the level of the composite index in the
nonmanufacturing sector and the q/q&nbsp; change in real GDP for
the services and the construction sectors.
ISM surveys more than 370
purchasing managers in more than 62 industries including law firms,
hospitals, government and retailers. The nonmanufacturing survey dates
back to July 1997. The figures are available in Haver's USECON
database.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106i.jpg" align="right" border="0" height="265" width="353">Amongst
the components, the business activity
index for the service sector moved back above break-even at 53.7 and
that was up sharply from one year ago. Also, the employment index
improved for the second month and was up sharply from its low in
November 2008. Since the series' inception in 1997 there has been an
80% correlation between the level of the ISM nonmanufacturing
employment index and the m/m change in payroll employment in the
service-producing plus the construction industries.&nbsp;Countering
these gains were declines in the new orders and the speed of vendor
deliveries indexes. This latter reading indicates that delivery speeds
quickened. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106j.jpg" align="right" border="0" height="265" width="353">Pricing
power improved for the third straight month, but
just slightly. The pricing index rose m/m to 58.7 and was up sharply
from one year ago. Since its inception ten years ago, there has been a
73% correlation between the price index and the q/q change in the GDP
services chain price index.
 Beginning with the January 2008
Nonmanufacturing <cite>Report On Business</cite>®, the
composite index is calculated as an indicator of the overall economic
condition for the non-manufacturing sector. It is a composite index
based on the diffusion indices of four of the indicators (business
activity, new orders, employment and supplier deliveries) with equal
weights. The latest report from the ISM can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.
News About the Future and Economic Fluctuations
from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q4/brq409_future-and-economic-fluctuations.pdf">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM" style="color: rgb(0, 0, 0);">ISM Nonmanufacturing Survey</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Dec. '08</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>50.1</td>
<td>48.7</td>
<td>50.6</td>
<td>40.1</td>
<td>46.3</td>
<td>47.4</td>
<td>53.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Business
Activity</td>
<td>53.7</td>
<td>49.6</td>
<td>55.2</td>
<td>38.9</td>
<td>48.1</td>
<td>47.4</td>
<td>56.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; New
Orders</td>
<td>52.1</td>
<td>55.1</td>
<td>55.6</td>
<td>38.9</td>
<td>48.0</td>
<td>47.0</td>
<td>54.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Employment</td>
<td>44.0</td>
<td>41.6</td>
<td>41.1</td>
<td>34.5</td>
<td>40.0</td>
<td>43.8</td>
<td>52.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Supplier
Deliveries</td>
<td>50.5</td>
<td>48.5</td>
<td>50.5</td>
<td>48.0</td>
<td>49.0</td>
<td>51.1</td>
<td>51.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Index</td>
<td>58.7</td>
<td>57.8</td>
<td>53.0</td>
<td>36.1</td>
<td>49.4</td>
<td>66.0</td>
<td>63.8</td>
</tr>
</tbody>
</table>






</body></html>

The nonmanufacturing sector has improved from its worst condition at year-end 2008 but it has yet to show much expansion. The December figure from the Institute for Supply Management (ISM) for the service & construction sectors [...]

U.S. ISM Nonmanufacturing Index Improves To Break-Even

<!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/100106a.jpg" align="right" border="0" height="265" width="353">
U.S.
unit sales of&nbsp; light vehicles during December
recovered slightly, but by hardly enough to salvage losses earlier in
the year. Sales rose 2.9% m/m to 11.25M units according to the Autodata
Corporation and were slightly stronger than Consensus expectations for
11.0M. To the upside, December sales rose 22.7% from the February '09
low. For the year as a whole, however, sales fell 21.6% from the 2008
average. At 10.37M units vehicle purchases last year were at their
lowest level since 1982. (Seasonal adjustment of these figures is
provided by the U.S. Bureau of Economic Analysis).Sales of domestically
made vehicles rose 3.1% last month to 8.42M units. They now
have recovered by nearly one-third from the February low but for the
year as a whole fell by nearly one-quarter from 2008. Sales of fuel
efficient cars rose 9.1% for the month and have risen by nearly
one-half from the January low. For the year as a whole sales fell
19.8%. Light truck sales slipped 2.0% m/m during December but were
25.8% above the low. For 2009, sales fell 25.2% as gasoline prices
rose.Imported light vehicle sales rose 2.4% from
November to 2.82M and were up 12.4% from the recession low in April.
For 2009 sales fell a lesser 18.3% from the 2008 average. Sales of
imported autos inched up another 0.8% m/m and 12.1% from the low. Sales
for 2009 were 18.2% below 2008 while imported light truck sales rose
5.8% during December and by 12.9% from the low. For all of 2009
imported light trick sales fell 18.5%. Overall,
import's share of the U.S. light vehicle market during
December was roughly stable m/m at 25.1%. It reached a new high of
27.6% during all of last year versus 26.5% during 2008. (Imported
vehicles are those produced outside the United States.) Imports' share
of the U.S. car market totaled 31.5% versus 34.3% during all of last
year, which was up just slightly from 2008, while the share of the
light truck market was 17.8%, down from 19.6% last year and from 18.3%
in 2008.The U.S. vehicle sales figures can be
found in Haver's USECON database.Automotive
Industry Outlook: Understanding the Impact on Workers and Communities
from the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2010/cfljanuary2010_270a.pdf">here</a>.&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106b.jpg" border="0" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106c.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM%22" style="color: rgb(0, 0, 0);">Light Vehicle Sales
(SAAR, Mil. Units)</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Dec. Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>11.25</td>
<td>10.93</td>
<td>10.46</td>
<td>8.7%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>6.01</td>
<td>5.65</td>
<td>5.50</td>
<td>13.9</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.11</td>
<td>3.77</td>
<td>3.64</td>
<td>15.8</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.89</td>
<td>1.88</td>
<td>1.87</td>
<td>10.1</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.24</td>
<td>5.28</td>
<td>4.96</td>
<td>0.2</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.31</td>
<td>4.40</td>
<td>4.12</td>
<td>2.6</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>0.93</td>
<td>0.88</td>
<td>0.84</td>
<td>-10.3</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
</body></html>

U.S. unit sales of light vehicles during December recovered slightly, but by hardly enough to salvage losses earlier in the year. Sales rose 2.9% m/m to 11.25M units according to the Autodata Corporation and were slightly stronger [...]

U.S. Vehicle Sales Improve At YearendBut For 2009 Were The Lowest In Twenty Seven Years

<!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/100106d.jpg" align="right" border="0" height="265" width="353">
Though
private sector payrolls fell again last month, the 84,000 worker
decline was the least since March 2008. The latest report from the
payroll processor ADP, in their National Employment Report, indicated
that the December decline in private nonfarm payrolls followed a
145,000 November drop that was less than initially reported. The latest
reading was the twenty-third consecutive monthly decline. For 2009 as a
whole payrolls fell by 4.4% which was the sharpest in the series' brief
eight year history.ADP
compiled the estimate from its database of individual companies'
payroll information. Macroeconomic Advisers, LLC, the St. Louis
economic consulting firm, developed the methodology for transforming
the raw data into an economic indicator.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106e.jpg" align="right" border="0" height="265" width="353">The U.S.
Bureau of Labor
Statistics will report December payroll employment this Friday. For comparison, the November decline of
145,000 in ADP's measure of private nonfarm payrolls was accompanied by
a loss of 18,000 jobs in the BLS measure of private sector payrolls.
According to ADP and Macro-Advisers, the
correlation between the monthly percentage change in the ADP estimate
and that in the BLS data is 0.90.
ADP reported that the decline in service-producing
industry employment
ended last month with a gain of 12,000 (-2.5% y/y). It was the first
rise since March of 2008. Small-sized payrolls grew 11,000 (-2.1% y/y)
while medium-sized payrolls rose 10,000 (-2.7% y/y). These increases
were offset by a 9,000 decline (-2.8% y/y) in large service producing
payrolls.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106f.jpg" align="right" border="0" height="265" width="353">In the
goods
producing sector employment fell 96,000 during December (-12.0% y/y)
and that was deeper than the November drop. Nevertheless, the
three-month annual rate of decline eased again to -6.4% versus -17.3%
at its worst last March. Small-sized payrolls fell 36,000 (-11.9% y/y),
about the same as a 35,000 drop (-11.7% y/y) in medium-sized payrolls.
Large payrolls fell 25,000 (-12.7% y/y). In the manufacturing sector
alone, payrolls fell 43,000 (-11.0% y/y). That was about the same as
the November decline but the three-month change moderated to -4.9% from
-17.4% last March.
&nbsp;The
ADP National Employment Report data is maintained in Haver's USECON
database; historical figures date back to December 2000. The figures in
this report cover only private sector jobs and exclude employment in
the public sector.&nbsp;The
full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/pdf/FINAL_Report_December_09.pdf">here
</a>and the
ADP methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf" title="blocked::http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf">here</a>.·&nbsp;Earnings Losses of Job
Losers During the 2001 Economic Downturn from the Federal
Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q4/brq409_earnings-losses-of-job-losers.pdf">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM" style="color: rgb(255, 255, 255);">ADP National Employment
Report</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Nonfarm Private
Payroll
Employment (m/m Chg., 000s)</td>
<td>-84</td>
<td>-145</td>
<td>-178</td>
<td>-4.2%</td>
<td>-4.4%</td>
<td>-0.5%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Small
Payroll (1-49)</td>
<td>-25</td>
<td>-59</td>
<td>-69</td>
<td>-3.6</td>
<td>-3.8</td>
<td>-0.0</td>
<td>1.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium
Payroll (50-499)</td>
<td>-25</td>
<td>-44</td>
<td>-65</td>
<td>-4.5</td>
<td>-5.0</td>
<td>-0.5</td>
<td>1.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large
Payroll (&gt;500)</td>
<td>-34</td>
<td>-42</td>
<td>-44</td>
<td>-5.0</td>
<td>-5.1</td>
<td>-1.6</td>
<td>-0.1</td>
</tr>
</tbody>
</table>






</body></html>

Though private sector payrolls fell again last month, the 84,000 worker decline was the least since March 2008. The latest report from the payroll processor ADP, in their National Employment Report, indicated that the December decline [...]

ADP Report:U.S. December Payroll Employment Decline Is Smallest Since March 2008

ADP Report:U.S. December PayrollEmployment Decline Is Smallest Since March 2008

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100105l.jpg" width="353">
The Holiday spirit, or perhaps after-Christmas discounts, prompted a surge in spending late in 2009. During the latest week, chain store sales jumped 1.5% from the prior week to lift sales to the highest level since August 2008. The late-year surge raised y/y sales growth to 2.5% which was just below the firmest since the middle of 2008. 
The ICSC-Goldman Sachs retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart. During the last ten years there has been a 69% correlation between the year-to-year growth in chain store sales and the growth in general merchandise retail sales. The weekly figures are available in Haver&#39;s SURVEYW database.
Perhaps heralding the sales improvement was the leading indicator of chain store sales. It slipped marginally early in December but its level was near the highest since January of last year.
This composite leading economic indicator is compiled from four series: (1) the MBA&#39;s volume index of mortgage applications for home purchase (2) the ABC News/Money magazine&#39;s survey of consumer buying conditions (3) new filings for jobless benefits and (4) the 30-year government bond yield.
The Current State of the Economy and a Look to the Future (With Reference to William &#145;Sidestroke&#146; Miles, W. Somerset Maugham, Don Ameche and Kenneth Arrow) is the title of yesterday&#39;s speech by Dallas Fed Governor Richard W. Fisher and it can be found <a href="http://dallasfed.org/news/speeches/fisher/2009/fs091110.cfm">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM" style="COLOR: #000000">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">01/01/10</th>
<th scope="col">12/25/09</th>
<th scope="col">12/18/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>497.6</td>
<td>490.1</td>
<td>488.1</td>
<td>2.5 %</td>
<td>0.1%</td>
<td>1.4%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>


</html>

The Holiday spirit, or perhaps after-Christmas discounts, prompted a surge in spending late in 2009. During the latest week, chain store sales jumped 1.5% from the prior week to lift sales to the highest level since August 2008. The [...]

Weekly Chain Store Sales Improve Sharply

<!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/100105d.jpg" align="right" border="0" height="265" width="353">
Home sales
suffered during November due to the (since-extended) expiration of an
$8,000 first-time home buyers tax credit. The National Association of
Realtors (NAR) reported that November pending home sales fell 16.0%
from October after nine consecutive months of firm gain. Despite the
m/m decline, sales remained up 19.4% from their January low. The
monthly decline exceeded Consensus expectations for a 3.1% m/m decline.
 <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100105e.jpg" align="right" border="0" height="265" width="353">
Sales in the Northeast fell a sharp 25.7% m/m following a 19.9%
October increase. Sales in the Midwest also fell 25.7% but that
followed a lesser 12.3% October gain. Sales in the South fell 15.0%
after the 5.1% October increase while sales in the West fell 2.7% after
a 10.9% October decline. These home sales 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. The series dates back to 2001 and the data is
available in Haver's PREALTOR database.Why
Are Banks Holding So Many Excess Reserves? from the Federal
Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/current_issues/ci15-8.pdf">here
</a>.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;=";" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM" style="color: white;">Pending Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>96.0</td>
<td>114.3</td>
<td>110.0</td>
<td>&nbsp;&nbsp;15.5%</td>
<td>86.8</td>
<td>95.8</td>
<td>112.1&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>74.4</td>
<td>100.2</td>
<td>83.6</td>
<td>14.8</td>
<td>73.1</td>
<td>85.9</td>
<td>98.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>82.0</td>
<td>110.3</td>
<td>98.2</td>
<td>9.2</td>
<td>80.6</td>
<td>89.5</td>
<td>101.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>97.8</td>
<td>115.1</td>
<td>109.5</td>
<td>14.8</td>
<td>89.6</td>
<td>107.3</td>
<td>127.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>124.6</td>
<td>128.1</td>
<td>143.8</td>
<td>21.4</td>
<td>99.5</td>
<td>92.3</td>
<td>109.6</td>
</tr>
</tbody>
</table>
</body></html>

Home sales suffered during November due to the (since-extended) expiration of an $8,000 first-time home buyers tax credit. The National Association of Realtors (NAR) reported that November pending home sales fell 16.0% from October [...]

U.S. Pending Home Sales Decline

<!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/100105f.jpg" align="right" border="0" height="265" width="353">
Evidence of
a U.S. economic recovery has given life to energy prices. The pump
price for regular gasoline rose to $2.67 per gallon last
week, the highest level since early-November. Gasoline prices remain up
from the December '08 low of $1.61. Further strength in prices was
evident yesterday when the spot market price for a gallon of regular
gasoline jumped to $2.10 per gallon from $2.01 the prior week and from
$1.85 at the beginning of December. The figures are reported by the
U.S. Department of Energy and can be found in Haver's WEEKLY
&amp; DAILY databases.
 Strength also was evident in the
price for a barrel of light sweet crude (WTI) oil. Yesterday, the
nearby futures price jumped to $81.51 from $79.07 averaged last week
and from $71.53 averaged in early-December. Moreover, prices were up
sharply from the December '08 low of $32.37. Inflation May Be
the Next Dragon to Slay from the Federal Reserve Bank of St.
Louis can be found <a href="http://www.stlouisfed.org/publications/re/articles/?id=1865">here&nbsp;</a>.

<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100105g.jpg" align="right" border="0" height="265" width="353">Demand for
gasoline leveled off last week and posted a 0.2% decline
versus one year ago. That decline compared to a 3.9% increase at the
beginning of October. Breaking away from earlier y/y strength, the
demand for residual fuel oil fell a sharp 28.6% y/y while distillate
demand fell 8.8% y/y, a decline more moderate than the 21.6% y/y
shortfall at the beginning of last July.
 Natural gas prices also
strengthened significantly with the winter heating season. Last week
prices averaged $5.87 per mmbtu (3.9% y/y), up from the November low of
$3.35. Nevertheless, prices remained down by more than half from the
high reached in early-July of 2008 of $13.19/mmbtu.
 The weekly energy
price data can be found in Haver's WEEKLY database
while the daily figures are in DAILY. The gasoline
demand figures are in OILWKLY.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly
Prices</a></th>
<th scope="col">01/04/10</th>
<th scope="col">12/28/09</th>
<th scope="col">12/21/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.67</td>
<td>2.61</td>
<td>2.59</td>
<td>58.3%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>79.14</td>
<td>75.09</td>
<td>71.77</td>
<td>86.2%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
</tbody>
</table>

</body></html>

Evidence of a U.S. economic recovery has given life to energy prices. The pump price for regular gasoline rose to $2.67 per gallon last week, the highest level since early-November. Gasoline prices remain up from the December '08 low [...]

U.S. Weekly Gasoline Prices Move Higher

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

US economy expected to outperform other major economies in 2025

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

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

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

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

Policy uncertainty has surged since the US national elections.

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

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

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

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

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

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

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

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

250502A5.jpg

250502B5.jpg

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

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

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

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

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

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

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

250502C5.jpg

250502D5.jpg

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

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

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

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

250502X5.jpg

250502F5.jpg

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

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

Winnie Tapasanun

250502F32.jpg

250502G32.jpg

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

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

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

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

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

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

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

250502H32.jpg

250502I32.jpg

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

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

Robert Brusca

250502E.jpg

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

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

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

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

250502.jpg

Globally Manufacturing Weakens

Andrew Cates

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

250501Z1.jpg

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

250501Z2.jpg

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

250501Z3.jpg

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

250501Z4.jpg

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

250501Z5.jpg

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

250501Z6.jpg

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

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/3PzXXKrkHcwtOLipohEdnB?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Tariff Truce, Tenuous Trust

250501F20.jpg

250501G20.jpg

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

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

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

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

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

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

250501H20.jpg

250501I20.jpg

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

Economy in Brief: January 2010

Jump to: