Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107b.jpg" width="353">
September industrial production data for Germany, Denmark, Norway and the United Kingdom were released today. All, except Norway showed a rise in total production from August and all except the UK were higher than September, 2004. Manufacturing production increased in Germany and Norway, but declined in the UK. (Data on total manufacturing are not available for Denmark.)<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107c.jpg" width="353">
The August decline in manufacturing in the UK was more than offset by a sharp increase of 6.69% in the mining and refining sector, where activity in the oil industry is recorded. Although England&#39;s oil industry has been declining it is still a significant factor in overall production. The oil industry is even more important in Norway and the swings in oil production there have had a more pronounced effect on total production. The first chart compares total production in the UK and in Norway. (In order to facilitate the comparison between Norwegian and the UK production indexes, we have rebased the original Norwegian data based on 1995=100 to 2002=100, the basis for the UK index. This can be done easily in DXLVG3, using the advanced functions.)
Industrial production in Denmark for the past five years has shown little evidence of a trend, but it has been extremely volatile even on a seasonally adjusted basis. Germany, by contrast has shown a moderately rising trend and less volatility as can be seen in the second chart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@GZ/@GZ3/@GZ301/@GZ301.HTM">Industrial Production</a></th>
<th scope="col">Sep 05&nbsp;</th>
<th scope="col">Aug 05</th>
<th scope="col">Sep 04</th>
<th scope="col">M/M&nbsp; %</th>
<th scope="col">Y/Y %</th>
<th scope="col">2004 &nbsp; </th>
<th scope="col">2003 &nbsp;</th>
<th scope="col">2002&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany (2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total</td>
<td>104.3</td>
<td>103.1</td>
<td>101.0</td>
<td>1.16</td>
<td>3.27</td>
<td>100.8</td>
<td>98..4</td>
<td>98.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>107.3</td>
<td>105.9</td>
<td>103.2</td>
<td>1.32</td>
<td>3.97</td>
<td>102.7</td>
<td>99.5</td>
<td>99.3</td>
</tr>
<tr>
<td class="firstcol">Denmark 2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>105</td>
<td>101</td>
<td>103</td>
<td>3.96</td>
<td>1.94</td>
<td>102</td>
<td>102</td>
<td>103</td>
</tr>
<tr>
<td class="firstcol">United Kingdom (2002=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>98.6</td>
<td>98.2&nbsp;</td>
<td>99.7&nbsp;</td>
<td>0.41&nbsp;</td>
<td>-1.10&nbsp;</td>
<td>100.3&nbsp;</td>
<td>99.5&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>78.3</td>
<td>76.2</td>
<td>81.3</td>
<td>6.69</td>
<td>-3.94</td>
<td>87.2</td>
<td>94.9</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;101.4</td>
<td>101.7&nbsp;</td>
<td>102.1&nbsp;</td>
<td>-0.29&nbsp;</td>
<td>-0.69&nbsp;</td>
<td>102.0&nbsp;</td>
<td>100.1&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Norway (2002=100)</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>&nbsp;100.0</td>
<td>100.1&nbsp;</td>
<td>96.3&nbsp;</td>
<td>-0.09</td>
<td>3.86&nbsp;</td>
<td>97.8</td>
<td>96.0&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>94.3</td>
<td>94.9</td>
<td>98.7</td>
<td>-0.62</td>
<td>-4.40</td>
<td>100.8</td>
<td>105.7</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;99.8</td>
<td>97.6&nbsp;</td>
<td>97.9&nbsp;</td>
<td>2.23&nbsp;</td>
<td>1.92&nbsp;</td>
<td>97.1&nbsp;</td>
<td>95.8&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
</tbody>
</table>
</body>
</html>

September industrial production data for Germany, Denmark, Norway and the United Kingdom were released today. All, except Norway showed a rise in total production from August and all except the UK were higher than September, 2004. [...]

September Industrial Production in Denmark, Germany, Norway and the UK

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107a.jpg" width="353">
Last week, Challenger, Grey &amp; Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at 74,569 (-21.2% y/y), the lowest level since August of last year.
During the last ten years there has been an 84% (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.
Increases in job cut announcements m/m were reported in apparel (65.5% y/y), automotive (11.5% y/y), insurance (272.2% y/y) and telecommunications (-28.5% y/y) pharmaceutical (37.0% y/y) industries although declines were noted in consumer goods (-45.0% y/y), electronics (-48.3% y/y), financial (-78.2% y/y) and retail (+118.0% y/y).
Challenger also reported that announced hiring plans also rose to a level up sharply from last October.
The Yield Curve as a Leading Indicator: Frequently Asked Questions answered by the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/capital_markets/ycfaq.pdf"> here</a>.
Last week&#39;s comments from Federal Reserve Board Vice Chairman Roger W. Ferguson, Jr. at the Cato Institute titled Monetary Credibility, Inflation, and Economic Growth can be found <a href="http://www.federalreserve.gov/BoardDocs/Speeches/2005/20051103/default.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/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>81,301</td>
<td>71,836</td>
<td>-20.2%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
</body>
</html>

Last week, Challenger, Grey & Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at [...]

Challenger Layoffs Up Again in October, Trend Lower

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107a.jpg" width="353">
Last week, Challenger, Grey &amp; Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at 74,569 (-21.2% y/y), the lowest level since August of last year.
During the last ten years there has been an 84% (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.
Increases in job cut announcements m/m were reported in apparel (65.5% y/y), automotive (11.5% y/y), insurance (272.2% y/y) and telecommunications (-28.5% y/y) pharmaceutical (37.0% y/y) industries although declines were noted in consumer goods (-45.0% y/y), electronics (-48.3% y/y), financial (-78.2% y/y) and retail (+118.0% y/y).
Challenger also reported that announced hiring plans also rose to a level up sharply from last October.
The Yield Curve as a Leading Indicator: Frequently Asked Questions answered by the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/capital_markets/ycfaq.pdf"> here</a>.
Last week&#39;s comments from Federal Reserve Board Vice Chairman Roger W. Ferguson, Jr. at the Cato Institute titled Monetary Credibility, Inflation, and Economic Growth can be found <a href="http://www.federalreserve.gov/BoardDocs/Speeches/2005/20051103/default.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/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>81,301</td>
<td>71,836</td>
<td>-20.2%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
 September Industrial Production in Denmark, Germany, Norway and the UK  
by <a href="/comment/Curley.html">Louise Curley</a> November 7, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107b.jpg" width="353">
September industrial production data for Germany, Denmark, Norway and the United Kingdom were released today. All, except Norway showed a rise in total production from August and all except the UK were higher than September, 2004. Manufacturing production increased in Germany and Norway, but declined in the UK. (Data on total manufacturing are not available for Denmark.)<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107c.jpg" width="353">
The August decline in manufacturing in the UK was more than offset by a sharp increase of 6.69% in the mining and refining sector, where activity in the oil industry is recorded. Although England&#39;s oil industry has been declining it is still a significant factor in overall production. The oil industry is even more important in Norway and the swings in oil production there have had a more pronounced effect on total production. The first chart compares total production in the UK and in Norway. (In order to facilitate the comparison between Norwegian and the UK production indexes, we have rebased the original Norwegian data based on 1995=100 to 2002=100, the basis for the UK index. This can be done easily in DXLVG3, using the advanced functions.)
Industrial production in Denmark for the past five years has shown little evidence of a trend, but it has been extremely volatile even on a seasonally adjusted basis. Germany, by contrast has shown a moderately rising trend and less volatility as can be seen in the second chart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@GZ/@GZ3/@GZ301/@GZ301.HTM">Industrial Production</a></th>
<th scope="col">Sep 05&nbsp;</th>
<th scope="col">Aug 05</th>
<th scope="col">Sep 04</th>
<th scope="col">M/M&nbsp; %</th>
<th scope="col">Y/Y %</th>
<th scope="col">2004 &nbsp; </th>
<th scope="col">2003 &nbsp;</th>
<th scope="col">2002&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany (2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total</td>
<td>104.3</td>
<td>103.1</td>
<td>101.0</td>
<td>1.16</td>
<td>3.27</td>
<td>100.8</td>
<td>98..4</td>
<td>98.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>107.3</td>
<td>105.9</td>
<td>103.2</td>
<td>1.32</td>
<td>3.97</td>
<td>102.7</td>
<td>99.5</td>
<td>99.3</td>
</tr>
<tr>
<td class="firstcol">Denmark 2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>105</td>
<td>101</td>
<td>103</td>
<td>3.96</td>
<td>1.94</td>
<td>102</td>
<td>102</td>
<td>103</td>
</tr>
<tr>
<td class="firstcol">United Kingdom (2002=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>98.6</td>
<td>98.2&nbsp;</td>
<td>99.7&nbsp;</td>
<td>0.41&nbsp;</td>
<td>-1.10&nbsp;</td>
<td>100.3&nbsp;</td>
<td>99.5&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>78.3</td>
<td>76.2</td>
<td>81.3</td>
<td>6.69</td>
<td>-3.94</td>
<td>87.2</td>
<td>94.9</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;101.4</td>
<td>101.7&nbsp;</td>
<td>102.1&nbsp;</td>
<td>-0.29&nbsp;</td>
<td>-0.69&nbsp;</td>
<td>102.0&nbsp;</td>
<td>100.1&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Norway (2002=100)</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>&nbsp;100.0</td>
<td>100.1&nbsp;</td>
<td>96.3&nbsp;</td>
<td>-0.09</td>
<td>3.86&nbsp;</td>
<td>97.8</td>
<td>96.0&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>94.3</td>
<td>94.9</td>
<td>98.7</td>
<td>-0.62</td>
<td>-4.40</td>
<td>100.8</td>
<td>105.7</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;99.8</td>
<td>97.6&nbsp;</td>
<td>97.9&nbsp;</td>
<td>2.23&nbsp;</td>
<td>1.92&nbsp;</td>
<td>97.1&nbsp;</td>
<td>95.8&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
</tbody>
</table>
</body>
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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104c.jpg" width="353">
After last month&#39;s somewhat counter-intuitive labor market report in Canada, October data righted the relationships of jobs -- up -- and unemployment -- down, showing an improved picture overall.
The number of workers employed jumped 68,700 after easing 2,300 in September. There were notable gains in several industry sectors: trade, finance, professional and technical services, education, and health and social services. Those in trade and finance were outsized and served to offset declines in previous months. Others are less defined, but indicative of generally rising trends. In the goods producing sector, total jobs were down 3,200; manufacturing, down 7,700, extended an irregular downtrend that began in early 2003, and construction fell 4,900.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104d.jpg" width="353">
The unemployment rate declined further in October, to 6.6% from 6.7% in September and two months at 6.8%. As we indicated last month, these are generation-low unemployment rates. The last time unemployment in Canada for all workers 15 years old and over was 6.6% or below was in April 1975, more than 30 years ago. Many Canadian labor market gauges highlight a middle age range of 15-64 years old, that is, omitting older workers. This unemployment rate remained at 6.8% in October, basically where it has been for the last seven months. Last month, we emphasized that lower unemployment didn&#39;t necessarily imply tight labor markets because participation was declining. There was a slight improvement in this situation in October, with the overall rate rising to 67.2% from September&#39;s 67.1%; the rate for 15-64 year olds, shown in the table below, also ticked up, from 77.7% to 77.8%.
We also cited last time the weakness in employment of young workers, but in October jobs for 15-24 year olds increased 32,000, contributing to a rise in their participation rate from 65.6% to 66.0%. Their unemployment rate dropped from 12.7% to 12.1%. Clearly month-to-month movements in these figures, particularly around the beginning of a school year, may not tell much fundamental about employment conditions generally, but for these young people, we can point to progress in reducing their unemployment from 14.0% early in 2004 and some hint of stabilization in their participation rates at about 66% throughout 2005. The number of jobs they hold is just about even with a year ago.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@G4/@G46/@G46.HTM">Canada</a>Age 15 and over</th>
Mo/Mo Change, 000s
<th scope="col">Yr/Yr % Oct</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Oct 2005</td>
<td>Sept 2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Employment</td>
<td>68.7</td>
<td>-2.3</td>
<td>1.2%</td>
<td>1.5%</td>
<td>1.9%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Goods- Producing</td>
<td>-3.2</td>
<td>-14.5</td>
<td>0.4%</td>
<td>2.0%</td>
<td>-0.5%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">Service- Producing</td>
<td>71.9</td>
<td>12.2</td>
<td>1.5%</td>
<td>1.2%</td>
<td>2.6%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Labor Force</td>
<td>52.7</td>
<td>-7.4</td>
<td>0.7%</td>
<td>1.1%</td>
<td>1.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Ages 15-64</td>
<td>Oct 2005</td>
<td>Sept 2005</td>
<td>Oct 2004</td>
<td colspan="3">Annual Average</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>6.8%</td>
<td>6.8%</td>
<td>7.1%</td>
<td>7.2%</td>
<td>7.7%</td>
<td>7.7%</td>
</tr>
<tr>
<td class="firstcol">Participation Rate</td>
<td>77.8%</td>
<td>77.7%</td>
<td>78.1%</td>
<td>78.2%</td>
<td>78.1%</td>
<td>77.4%</td>
</tr>
</tbody>
</table>
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After last month's somewhat counter-intuitive labor market report in Canada, October data righted the relationships of jobs -- up -- and unemployment -- down, showing an improved picture overall. The number of workers employed jumped [...]

Canadian Employment Rebounds in October; Participation Rate & Unemployment Steady

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104a.jpg" width="353">
Non-farm payrolls rose 56,000 last month following a revised 8,000 worker decline in September, initially reported at down 35,000. In addition, the August rise in payrolls was revised lower to 148,000 from 211,000 reported earlier. Consensus expectations had been for a larger 122,000 increase in October.
The Bureau of Labor Statistics indicated that the weaker-than-expected October number was due to softness in the labor market outside of hurricane-affected regions.
Construction employment rose 33,000 (3.8% y/y), about twice the average gain during the prior four months. October&#39;s strength at least partly reflected rebuilding following Hurricane Katrina.
Factory sector payrolls increased 12,000 following a little revised 28,000 worker decline in September. Transportation equipment jobs increased 22,000, largely due to the return of 18,000 striking workers in the aerospace industry.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104b.jpg" width="353">
Payrolls in private service producing industries fell the same 3,000 (+1.7% y/y) as during September which was revised from -67,000. Retail jobs fell 5,400 (+0.7% y/y) and the September decline was lessened to 58,000, initially spotted at -88,000. The leisure &amp; hospitality industries shed another 18,000 (+1.6% y/y) after a 63,000 decline in September, revised from -80,000.
Professional &amp; business services jobs rose 12,000 (2.7% y/y) and financial sector jobs rose 22,000 (2.4% y/y).Education &amp; health services jobs increased 11,000 (2.2% y/y).
Average hourly earnings rose 0.5%, more than double expectations. Factory sector earnings rose 0.7% (2.6% y/y) and private service sector earnings jumped 0.9% (3.5% y/y).
From the household survey, the unemployment rate fell to 5.0% versus expected stability at 5.1%. Employment jumped 214,000 (2.0% y/y) and the labor force fell 14,000 (+1.5% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>56,000</td>
<td>-8,000</td>
<td>1.4%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>12,000</td>
<td>-28,000</td>
<td>-0.7%</td>
<td>-1.2%</td>
<td>-4.9%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8</td>
<td>33.7</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.5%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>2.1%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.0%</td>
<td>5.1%</td>
<td>5.5%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
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Non-farm payrolls rose 56,000 last month following a revised 8,000 worker decline in September, initially reported at down 35,000. In addition, the August rise in payrolls was revised lower to 148,000 from 211,000 reported earlier. [...]

October U.S. Payrolls Soft

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104a.jpg" width="353">
Non-farm payrolls rose 56,000 last month following a revised 8,000 worker decline in September, initially reported at down 35,000. In addition, the August rise in payrolls was revised lower to 148,000 from 211,000 reported earlier. Consensus expectations had been for a larger 122,000 increase in October.
The Bureau of Labor Statistics indicated that the weaker-than-expected October number was due to softness in the labor market outside of hurricane-affected regions.
Construction employment rose 33,000 (3.8% y/y), about twice the average gain during the prior four months. October&#39;s strength at least partly reflected rebuilding following Hurricane Katrina.
Factory sector payrolls increased 12,000 following a little revised 28,000 worker decline in September. Transportation equipment jobs increased 22,000, largely due to the return of 18,000 striking workers in the aerospace industry.
Payrolls in private service producing industries fell the same 3,000 (+1.7% y/y) as during September which was revised from -67,000. Retail jobs fell 5,400 (+0.7% y/y) and the September decline was lessened to 58,000, initially spotted at -88,000. The leisure &amp; hospitality industries shed another 18,000 (+1.6% y/y) after a 63,000 decline in September, revised from -80,000.
Professional &amp; business services jobs rose 12,000 (2.7% y/y) and financial sector jobs rose 22,000 (2.4% y/y).Education &amp; health services jobs increased 11,000 (2.2% y/y).
Average hourly earnings rose 0.5%, more than double expectations. Factory sector earnings rose 0.7% (2.6% y/y) and private service sector earnings jumped 0.9% (3.5% y/y).
From the household survey, the unemployment rate fell to 5.0% versus expected stability at 5.1%. Employment jumped 214,000 (2.0% y/y) and the labor force fell 14,000 (+1.5% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>56,000</td>
<td>-8,000</td>
<td>1.4%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>12,000</td>
<td>-28,000</td>
<td>-0.7%</td>
<td>-1.2%</td>
<td>-4.9%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8</td>
<td>33.7</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.5%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>2.1%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.0%</td>
<td>5.1%</td>
<td>5.5%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
Canadian Employment Rebounds in October; Participation Rate & Unemployment Steady 
by <a href="/comment/Stone.html">Carol Stone</a> November 4, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104c.jpg" width="353">
After last month&#39;s somewhat counter-intuitive labor market report in Canada, October data righted the relationships of jobs -- up -- and unemployment -- down, showing an improved picture overall.
The number of workers employed jumped 68,700 after easing 2,300 in September. There were notable gains in several industry sectors: trade, finance, professional and technical services, education, and health and social services. Those in trade and finance were outsized and served to offset declines in previous months. Others are less defined, but indicative of generally rising trends. In the goods producing sector, total jobs were down 3,200; manufacturing, down 7,700, extended an irregular downtrend that began in early 2003, and construction fell 4,900.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104d.jpg" width="353">
The unemployment rate declined further in October, to 6.6% from 6.7% in September and two months at 6.8%. As we indicated last month, these are generation-low unemployment rates. The last time unemployment in Canada for all workers 15 years old and over was 6.6% or below was in April 1975, more than 30 years ago. Many Canadian labor market gauges highlight a middle age range of 15-64 years old, that is, omitting older workers. This unemployment rate remained at 6.8% in October, basically where it has been for the last seven months. Last month, we emphasized that lower unemployment didn&#39;t necessarily imply tight labor markets because participation was declining. There was a slight improvement in this situation in October, with the overall rate rising to 67.2% from September&#39;s 67.1%; the rate for 15-64 year olds, shown in the table below, also ticked up, from 77.7% to 77.8%.
We also cited last time the weakness in employment of young workers, but in October jobs for 15-24 year olds increased 32,000, contributing to a rise in their participation rate from 65.6% to 66.0%. Their unemployment rate dropped from 12.7% to 12.1%. Clearly month-to-month movements in these figures, particularly around the beginning of a school year, may not tell much fundamental about employment conditions generally, but for these young people, we can point to progress in reducing their unemployment from 14.0% early in 2004 and some hint of stabilization in their participation rates at about 66% throughout 2005. The number of jobs they hold is just about even with a year ago.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@G4/@G46/@G46.HTM">Canada</a>Age 15 and over</th>
Mo/Mo Change, 000s
<th scope="col">Yr/Yr % Oct</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Oct 2005</td>
<td>Sept 2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Employment</td>
<td>68.7</td>
<td>-2.3</td>
<td>1.2%</td>
<td>1.5%</td>
<td>1.9%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Goods- Producing</td>
<td>-3.2</td>
<td>-14.5</td>
<td>0.4%</td>
<td>2.0%</td>
<td>-0.5%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">Service- Producing</td>
<td>71.9</td>
<td>12.2</td>
<td>1.5%</td>
<td>1.2%</td>
<td>2.6%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Labor Force</td>
<td>52.7</td>
<td>-7.4</td>
<td>0.7%</td>
<td>1.1%</td>
<td>1.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Ages 15-64</td>
<td>Oct 2005</td>
<td>Sept 2005</td>
<td>Oct 2004</td>
<td colspan="3">Annual Average</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>6.8%</td>
<td>6.8%</td>
<td>7.1%</td>
<td>7.2%</td>
<td>7.7%</td>
<td>7.7%</td>
</tr>
<tr>
<td class="firstcol">Participation Rate</td>
<td>77.8%</td>
<td>77.7%</td>
<td>78.1%</td>
<td>78.2%</td>
<td>78.1%</td>
<td>77.4%</td>
</tr>
</tbody>
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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051103j.jpg" width="353">
Purchasing manager surveys suggest economies in Europe and Japan are improving, while China might be showing signs of moderation. These monthly polls are published by NTC Research in London and conducted by local business organizations, such as Nomura in Japan and Reuters in the UK. The results are shown as diffusion indexes, which show the percentage of respondents that report increasing business for a given month. As with the ISM data in the US, manufacturing is reported on the first business day of the following month, with nonmanufacturing (mostly services) following two days later. The indexes are calculated as the percentage reporting rising business plus half of those reporting a flat performance. The resulting indexes are then seasonally adjusted.
In October, companies in the Euro-Zone saw business increase more broadly, with a manufacturing index of 52.69 and services, 54.95. Both show notable improvements from earlier in the year. European manufacturing faced a mild contraction (readings below 50%) in the spring and the service sector experienced sluggish growth in the year through August before picking up smartly in the last two months. Patterns in the UK recently have been somewhat similar, with a brief outright contraction in manufacturing during the spring, but some subsequent pickup; activity at UK service companies has held within a persistent and narrow range since the middle of 2004, indicating steady moderate growth.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051103h.jpg" width="353">
In contrast, growth in Russia&#39;s manufacturing sector has slowed in the last two months. This PMI index has ranged from roughly 50 to 55 over the last several years, with September and October dropping into the lower end of the span. Services, though, are holding up well with some strengthening evident so far in 2005. Price behavior in these sectors varies as well: input prices for manufacturers show a trendless, but widely varying oscillation, while service companies&#39; input prices have risen at a dramatically larger number of firms recently.
Only manufacturing surveys are taken in Japan and China. Japanese factories appear to be doing better, with that index ratcheting upward all year long. This firming even includes employment; this index worked its way above 50% during 2004, and since March of this year, it has averaged 52.5. While not high by world standards, it looks good for Japan. The survey began in October 2001, and both the total index and the employment component were down around 40 at the time. Such improvement in manufacturing seems at odds with the Japanese government&#39;s synthetic indexes reported here Monday by Louise Curley, in which marked slowing or even decline is indicated for the Japanese economy in Q3. Clearly, at the least, various data may diverge over brief time periods. In this case, the synthetic indexes are meant to describe demand conditions, while the PMI survey looks at supply, and that in only one sector. This makes judging the prospects for even the direction of business in Japan a tough call.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051103i.jpg" width="353">
China is even more intriguing. Its manufacturing index has dropped steadily since its inception 18 months ago, and now stands just barely above 50%. The moderation appears in most of the survey components, including new orders and backlogs. Notably, output prices are below 50%, indicating declines at more companies than have increases. And in the last three months, employment at factories has been ever so slightly below 50%, basically indicating that it has stopped growing. These results feel odd for a country with GDP growth at about 9-1/2%, led by manufacturing. Perhaps the pattern is a relative one. With such a high growth trend, merely keeping up pace may give the impression of slowing, particularly from the high base that obtained in the spring of 2004 when the survey started. Asia is clearly full of interesting economic developments. We eagerly await more information on how they&#39;re doing.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">October 2005</th>
<th scope="col">September 2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Euro-Zone</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>52.69</td>
<td>51.74</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Services</td>
<td>54.92</td>
<td>54.65</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>51.72</td>
<td>51.52</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Services</td>
<td>56.14</td>
<td>55.05</td>
</tr>
<tr class="odd">
<td class="firstcol">Russia</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>51.23</td>
<td>51.83</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Services</td>
<td>60.75</td>
<td>59.48</td>
</tr>
<tr>
<td class="firstcol">Japan</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>54.74</td>
<td>54.46</td>
</tr>
<tr>
<td class="firstcol">China</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>50.07</td>
<td>50.85</td>
</tr>
</tbody>
</table>
</body>
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Purchasing manager surveys suggest economies in Europe and Japan are improving, while China might be showing signs of moderation. These monthly polls are published by NTC Research in London and conducted by local business [...]

PMI Surveys Around the World in October: Europe Looks Better, China Does Not!

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051103g.jpg" width="353">
Factory inventories fell another 0.1% in September following a deepened 0.2% decline in August even though higher prices recently have boosted petroleum inventories, (+24.9% y/y). Less petroleum, factory inventories fell 0.1% (+4.1% y/y) in September for the third decline in the last four months and have been virtually unchanged since March.
Inventory declines last month centered mostly in nondurables industries where textile products fell 0.9% (-0.1% y/y) and paper products fell 0.8% (+2.5% y/y). Plastics &amp; rubber products also fell a sharp 1.8% (+6.4% y/y) and paints &amp; coatings inventories fell 1.0% (+6.3% y/y).
Electrical equipment inventories rose 1.0% (3.2% y/y) after four months of declines while machinery inventories rose 0.2% (9.3% y/y). Computers &amp; electronic components rose 0.1% (-0.3% y/y) but electronic computer inventories rose 4.4% (0.9% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051103f.jpg" width="353">
Factory shipments fell 0.5% after an upwardly revised 2.1% surge in August, however, less a 3.4% jump in shipments from petroleum refineries factory shipments fell 0.9% (3.9% y/y).
Factory sector orders fell 1.7%. The advance report of a 2.1% drop in durables goods orders was revised to -2.4%.
Unfilled orders jumped 0.7% on top of the 1.6% August spurt. Less the transportation sector backlogs surged 1.2% (8.9% y/y) and the ratio of unfilled orders to shipments jumped.<a href="http://research.stlouisfed.org/publications/review/05/07/Gali.pdf"> </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/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Factory Survey</a> (NAICS)</th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>4.9%</td>
<td>7.7%</td>
<td>-1.1%</td>
<td>-5.4%</td>
</tr>
<tr>
<td class="firstcol">New Orders</td>
<td>-1.7%</td>
<td>2.9%</td>
<td>7.0%</td>
<td>9.3%</td>
<td>3.5%</td>
<td>-2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>-0.5%</td>
<td>2.1%</td>
<td>6.6%</td>
<td>9.5%</td>
<td>1.5%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">Unfilled Orders</td>
<td>0.7%</td>
<td>1.6%</td>
<td>10.4%</td>
<td>8.4%</td>
<td>8.0%</td>
<td>-8.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

Factory inventories fell another 0.1% in September following a deepened 0.2% decline in August even though higher prices recently have boosted petroleum inventories, (+24.9% y/y). Less petroleum, factory inventories fell 0.1% (+4.1% [...]

U.S. Factory Inventories Slip

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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

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

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

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

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

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

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

U.S. Housing Starts Strengthen Unexpectedly in July

Winnie Tapasanun

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

U.S. Energy Prices Are Mixed in Latest Week

Tian Yong Woon

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

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

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

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

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

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

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

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

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

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Asia

Economic Letter from Asia: BRIC by BRIC

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The Housing Market Index, compiled by the National Association of Home Builders/Wells Fargo, eased 3.0% (-17.9% y/y) to 32 in August, reversing the 3.1% July rise to 33. It remained below the break-even point of 50, where it’s been since May of last year. The index remains below a July 2023 high of 56 and a November 2020 peak of 90.

The rate on a 30-year fixed rate mortgage averaged 6.61% in the first two weeks of August versus 6.72% during all of July. It fell to 6.58% last week and remained below the high of 7.79% in the last week of October 2023, according to Freddie Mac.

The single-family sales measure declined 2.8% (-20.5% y/y) this month to 35, after rising 2.9% in July. The prospective sales in six months measure held steady (-12.2% y/y) at 43, after rising 7.5% in July. The traffic of prospective buyers’ index rose 10.0% (-12.0% y/y) to 22 in August, after declining 4.8% in July.

Housing weakness centered in the Northeast this month with the index declining 18.8% (-15.2% y/y) to 39, after rising 9.1% in July. It was the lowest level since January 2023.  In the West, the index rose 4.0% (-29.7% y/y) to 26, its highest level in three months. The index for the Midwest held steady (+13.2% y/y) at 43, and matched the highest level in four months. The index in the South also held steady at 29 (-25.6% y/y), after falling in each month of this year.

The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. The regional indexes run back to December 2004.

These data are included in Haver's **SURVEYS** database.

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- Overall reading matches lowest level since December 2022.
- Current sales slip, expectations steady, while traffic improves.
- Lower Northeast reading accounts for overall index decline.

Economy in Brief: November 2005

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