Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071115d.jpg" align="left" border="0" height="265" width="353">
European car registrations jumped by 11.6% Y/Y following a
drop of 8.2% in September. Despite gains in two of the past three
months, sales are still lower year to date in 2007, by 0.4% compared to
sales last year. Germany lags the most as its year-to-date (YTD) sales
are lower by 7.7% through October. Spain is also lagging but with sales
off by 1.6% YTD. Italy is up strongly, by 6.9%, on a year-to-date
basis- surprising for a country where growth has been so weak. The UK
and France have stronger year-to-date numbers of 1.4% and 0.9%
respectively. Auto sales are mostly weak on the back of the German VAT
tax hike that shoved sales into late 2006 to avoid the tax. Apart from
that, European sales are doing ok. Excluding Germany European auto
sales are up by 2.6% over last year on a YTD basis. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col">Ezone Car Registrations </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo %</td>
<td colspan="2">3-Mo Trend From</td>
<td colspan="2">6-Mo Trend From</td>
<td colspan="2">12-Mo Trend From</td>
</tr>
<tr class="grey3">
<td class="firstcol">All Seas Adj</td>
<td>Oct 07</td>
<td>Sep 07</td>
<td>Aug 07</td>
<td>Oct 07</td>
<td>Sep 07</td>
<td>Oct 07</td>
<td>Sep 07</td>
<td>Oct 07</td>
<td>Sep 07</td>
</tr>
<tr class="grey2">
<td class="firstcol">Ezone Registrations</td>
<td>11.6%</td>
<td>-8.2%</td>
<td>3.8%</td>
<td>28.0%</td>
<td>-17.5%</td>
<td>32.2%</td>
<td>-10.9%</td>
<td>4.2%</td>
<td>-4.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Germany:</td>
<td>6.2%</td>
<td>-7.4%</td>
<td>6.3%</td>
<td>19.5%</td>
<td>5.4%</td>
<td>31.6%</td>
<td>-5.5%</td>
<td>-4.1%</td>
<td>-11.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">France (WDA)</td>
<td>-0.2%</td>
<td>3.7%</td>
<td>-4.1%</td>
<td>-2.9%</td>
<td>12.0%</td>
<td>11.7%</td>
<td>7.5%</td>
<td>4.6%</td>
<td>7.7%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Italy</td>
<td>11.5%</td>
<td>-10.6%</td>
<td>10.5%</td>
<td>47.2%</td>
<td>-39.0%</td>
<td>10.8%</td>
<td>-12.4%</td>
<td>8.5%</td>
<td>-0.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Spain</td>
<td>11.4%</td>
<td>-9.5%</td>
<td>5.3%</td>
<td>27.3%</td>
<td>-25.0%</td>
<td>28.1%</td>
<td>-25.8%</td>
<td>3.8%</td>
<td>-7.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">UK</td>
<td>7.1%</td>
<td>22.0%</td>
<td>-20.0%</td>
<td>19.6%</td>
<td>-0.3%</td>
<td>11.6%</td>
<td>-8.2%</td>
<td>7.2%</td>
<td>-0.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Base Month of Calc</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>Jul-07</td>
<td>Jul-07</td>
<td>Jun-07</td>
<td>Apr-07</td>
<td>Mar-07</td>
<td>Oct-06</td>
<td>Sep-06</td>
</tr>
</tbody>
</table>
</body></html>

European car registrations jumped by 11.6% Y/Y following a drop of 8.2% in September. Despite gains in two of the past three months, sales are still lower year to date in 2007, by 0.4% compared to sales last year. Germany lags the [...]

European Car Registrations Put in Another Good Month

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114f.jpg" width="353">
The National Association of Realtors reported that for September, level of pending home sales held steady at the August level. That level was, however, still down 20.4% from one year earlier and 24.4% year to date.
The latest monthly figure is about one third below the peak average level during 2005. The data date back only to 2001.
These figures are analogous to the new home sales data from the Commerce Dept. in that they measure home sales when the sales contract is signed, not at the time the sale is closed.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114g.jpg" width="353">
In further confirmation of the slow rate of home sales, the Realtors indicated in an earlier report that the number of homes on the market and available for sale rose September to a level 16.3% above the year earlier level.
In the Western part of the nation, sales were about unchanged m/m but remained down 25.6% from one year earlier.
In the Northeast, pending home sales are down 23.1% y/y. In the Midwest sales are down 14.4% and in the South sales are down 19.7%.
The pending home sales data are available in Haver&#39;s PREALTOR database and the number of homes on the market are in the REALTOR database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Pending Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total</td>
<td>85.7</td>
<td>85.5</td>
<td>-20.4%&nbsp;</td>
<td>112.1&nbsp;</td>
<td>124.2</td>
<td>120.5&nbsp;</td>
</tr>
</tbody>
</table>
</body>
</html>

The National Association of Realtors reported that for September, level of pending home sales held steady at the August level. That level was, however, still down 20.4% from one year earlier and 24.4% year to date. The latest monthly [...]

U.S. Pending Home Sales Stabilize

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114d.jpg" width="353">
U.S. retail sales last month rose 0.2% after the 0.7% September increase which revised up slightly. The gain matched expectations and the prior month&#39;s 0.7% was revised up slightly.
Excluding autos, sales rose 0.2% and the prior month&#39;s gain of 0.4% was revised down slightly to 0.3%. A 0.3% October increase had been expected.
Nonauto retail sales less gasoline ticked up just 0.1% (3.9% y/y) after an unrevised 0.2% rise in September. The 0.1% decline during August was revised down to a 0.5% drop.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114e.jpg" width="353">
Sales of discretionary items were generally weak last month. Furniture, home furnishings &amp; appliance stores sales fell 0.4% (0.8% y/y) and the prior month&#39;s gain was revised down to a 0.8% decline. Sales have declined in four of the last five months. Sales at general merchandise stores fell 0.1% (+3.6 y/y). Apparel store sales rose 0.1% (4.4% y/y) but the prior month&#39;s decline was revised up to a 0.1% increase.
Building material sales rose a firm 0.6% (1.3% y/y) though the prior month&#39;s gain of 0.8% was revised down to a 0.4% decline.
Sales of nonstore retailers (internet &amp; catalogue) fell 1.0% (5.9% y/y) after a little revised 0.9% September increase.
Motor vehicle &amp; parts purchases rose 0.2% (5.0% y/y) but unit sales of light vehicles fell 1.1% m/m in October.
Gasoline service station sales rose 0.8% after the 1.8% September gain. Higher gas prices should lift this month&#39;s increase.
The recent Treasury Dept. study of Income Mobility is available <a href="http://www.treasury.gov/press/releases/hp673.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">&nbsp;</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a></td>
<td>0.2%</td>
<td>0.7%</td>
<td>5.2%</td>
<td>6.2%</td>
<td>6.6%</td>
<td>6.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>0.2%</td>
<td>0.3%</td>
<td>5.2%</td>
<td>7.3%</td>
<td>7.6%</td>
<td>7.1%</td>
</tr>
</tbody>
</table>


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U.S. retail sales last month rose 0.2% after the 0.7% September increase which revised up slightly. The gain matched expectations and the prior month's 0.7% was revised up slightly. Excluding autos, sales rose 0.2% and the prior [...]

U.S. Retail Sales About As Expected

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114a.jpg" align="left" border="0" height="265" width="353">
Finished producer prices ticked up just 0.1% during October
following the firm 1.1% rise during September. The gain was the
smallest since June and was slightly less than Consensus expectations
for a 0.3% rise. Nevertheless, it lifted the y/y increase to 6.0% its
strongest in two years.
Core finished goods producer prices were
unchanged last month. It was the first month without an increase in
prices since a slight decline this past March and it was less than the
expected 0.2% increase. Again, it left the y/y gain at 2.5% which was
its strongest in two years. The recent momentum in core producer prices
did, however, fall to its lowest of 1.0% since May.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114b.jpg" align="right" border="0" height="265" width="353">
Energy prices fell 0.8% (16.1% y/y) as prices for gasoline
fell 0.8% (+32.4% y/y) after the 4.7% September jump. Natural gas
prices also fell 0.5% (+7.7% y/y) but home heating oil prices increased
3.2% (16.2% y/y.
Food prices were again strong and rose 0.8% (7.1% y/y) on the
heels of a 1.5% jump during September. Vegetable prices soared 29.1%
(27.0% y/y) but beef prices fell 2.1% (+1.5% y/y). 
Household appliance prices were firm and rose 0.4% (1.2% y/y)
after two months of 0.2% decline while passenger car
prices jumped 5.7% (0.4% y/y).
Capital equipment prices jumped 1.0% (2.0% y/y) reflecting
strength in most categories. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114c.jpg" align="left" border="0" height="265" width="353">
Intermediate goods prices ticked up 0.1% and the index
excluding food &amp; energy prices again rose a small 0.1%. Prices
for steel mill products fell 1.8%, the fourth month of sharp decline. 
 

The crude materials PPI rose 2.4% led higher by a 3.7% (4.1%
y/y) gain in crude petroleum and a 9.7% (37.6% y/y) rise in natural gas
prices. The core crude materials PPI also was strong and rose 1.4%.
Iron &amp; steel scrap prices again rose 1.4% (29.8% y/y).
Today's speech by Federal Reserve Chairman Ben S.
Bernanke on Federal Reserve Communications can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20071114a.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/USECON/@E8/@E802/@E80201/@E80201.HTM">Producer
Price Index</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>0.1%</td>
<td>1.1%&nbsp;</td>
<td>&nbsp; 6.0%&nbsp;</td>
<td>2.9%</td>
<td>&nbsp;4.9%&nbsp;</td>
<td>3.6%&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.0%</td>
<td>0.1%</td>
<td>&nbsp;2.5%</td>
<td>1.4%</td>
<td>2.4%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>0.1%</td>
<td>0.4%</td>
<td>5.4%</td>
<td>6.4%</td>
<td>&nbsp;8.0%</td>
<td>6.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.1%</td>
<td>0.1%</td>
<td>1.9%</td>
<td>6.0%</td>
<td>&nbsp;5.5%</td>
<td>5.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>2.4%</td>
<td>&nbsp;0.1%&nbsp;</td>
<td>&nbsp;25.6%</td>
<td>1.4%</td>
<td>14.6%</td>
<td>&nbsp;17.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>1.4%</td>
<td>1.6%</td>
<td>&nbsp;18.8%</td>
<td>20.9%</td>
<td>4.9%</td>
<td>&nbsp;26.5%</td>
</tr>
</tbody>
</table>
</body></html>

Finished producer prices ticked up just 0.1% during October following the firm 1.1% rise during September. The gain was the smallest since June and was slightly less than Consensus expectations for a 0.3% rise. Nevertheless, it lifted [...]

U.S. PPI Total & Core Weak

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114a.jpg" align="left" border="0" height="265" width="353">
Finished producer prices ticked up just 0.1% during October
following the firm 1.1% rise during September. The gain was the
smallest since June and was slightly less than Consensus expectations
for a 0.3% rise. Nevertheless, it lifted the y/y increase to 6.0% its
strongest in two years.
Core finished goods producer prices were
unchanged last month. It was the first month without an increase in
prices since a slight decline this past March and it was less than the
expected 0.2% increase. Again, it left the y/y gain at 2.5% which was
its strongest in two years. The recent momentum in core producer prices
did, however, fall to its lowest of 1.0% since May.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114b.jpg" align="right" border="0" height="265" width="353">
Energy prices fell 0.8% (16.1% y/y) as prices for gasoline
fell 0.8% (+32.4% y/y) after the 4.7% September jump. Natural gas
prices also fell 0.5% (+7.7% y/y) but home heating oil prices increased
3.2% (16.2% y/y.
Food prices were again strong and rose 0.8% (7.1% y/y) on the
heels of a 1.5% jump during September. Vegetable prices soared 29.1%
(27.0% y/y) but beef prices fell 2.1% (+1.5% y/y). 
Household appliance prices were firm and rose 0.4% (1.2% y/y)
after two months of 0.2% decline while passenger car
prices jumped 5.7% (0.4% y/y).
Capital equipment prices jumped 1.0% (2.0% y/y) reflecting
strength in most categories. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114c.jpg" align="left" border="0" height="265" width="353">
Intermediate goods prices ticked up 0.1% and the index
excluding food &amp; energy prices again rose a small 0.1%. Prices
for steel mill products fell 1.8%, the fourth month of sharp decline. 
 

The crude materials PPI rose 2.4% led higher by a 3.7% (4.1%
y/y) gain in crude petroleum and a 9.7% (37.6% y/y) rise in natural gas
prices. The core crude materials PPI also was strong and rose 1.4%.
Iron &amp; steel scrap prices again rose 1.4% (29.8% y/y).
Today's speech by Federal Reserve Chairman Ben S.
Bernanke on Federal Reserve Communications can be found <a href="http://www.federalreserve.gov/newsevents/speech/bernanke20071114a.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/USECON/@E8/@E802/@E80201/@E80201.HTM">Producer
Price Index</a></th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Finished Goods</td>
<td>0.1%</td>
<td>1.1%&nbsp;</td>
<td>&nbsp; 6.0%&nbsp;</td>
<td>2.9%</td>
<td>&nbsp;4.9%&nbsp;</td>
<td>3.6%&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.0%</td>
<td>0.1%</td>
<td>&nbsp;2.5%</td>
<td>1.4%</td>
<td>2.4%</td>
<td>1.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate Goods</td>
<td>0.1%</td>
<td>0.4%</td>
<td>5.4%</td>
<td>6.4%</td>
<td>&nbsp;8.0%</td>
<td>6.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>0.1%</td>
<td>0.1%</td>
<td>1.9%</td>
<td>6.0%</td>
<td>&nbsp;5.5%</td>
<td>5.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Crude Goods</td>
<td>2.4%</td>
<td>&nbsp;0.1%&nbsp;</td>
<td>&nbsp;25.6%</td>
<td>1.4%</td>
<td>14.6%</td>
<td>&nbsp;17.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Core</td>
<td>1.4%</td>
<td>1.6%</td>
<td>&nbsp;18.8%</td>
<td>20.9%</td>
<td>4.9%</td>
<td>&nbsp;26.5%</td>
</tr>
</tbody>
</table>
U.S. Retail Sales About As Expected 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 14 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114d.jpg" align="left" border="0" height="265" width="353">
U.S. retail sales last month rose 0.2% after the 0.7%
September increase which revised up slightly. The gain matched
expectations and the prior month's 0.7% was revised up slightly.
Excluding autos, sales rose 0.2% and the prior month's gain of
0.4% was revised down slightly to 0.3%. A 0.3% October increase had
been expected.
Nonauto retail sales less gasoline ticked up just
0.1% (3.9% y/y) after an unrevised 0.2% rise in September. The 0.1%
decline during August was revised down to a 0.5% drop.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114e.jpg" align="right" border="0" height="265" width="353">
Sales of discretionary items were generally
weak last month. Furniture, home furnishings &amp;
appliance stores sales fell 0.4% (0.8% y/y) and the prior
month's gain was revised down to a 0.8% decline. Sales have declined in
four of the last five months. Sales at general merchandise
stores fell 0.1% (+3.6 y/y). Apparel store sales rose
0.1% (4.4% y/y) but the prior month's decline was revised up to a 0.1%
increase.
Building material sales rose a firm 0.6% (1.3% y/y) though the
prior month's gain of 0.8% was revised down to a 0.4% decline.
Sales of nonstore retailers (internet &amp;
catalogue) fell 1.0% (5.9% y/y) after a little revised 0.9%
September increase.
Motor vehicle &amp; parts purchases rose 0.2% (5.0% y/y)
but unit sales of light vehicles fell 1.1% m/m in October.
Gasoline service station sales rose 0.8% after the 1.8%
September gain. Higher gas prices should lift this month's increase.
The recent Treasury Dept. study of Income Mobility
is available <a href="http://www.treasury.gov/press/releases/hp673.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">&nbsp;</th>
<th scope="col">October</th>
<th scope="col">September</th>
<th scope="col">Y/Y</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail
Sales &amp; Food Services</a></td>
<td>0.2%</td>
<td>0.7%</td>
<td>5.2%</td>
<td>6.2%</td>
<td>6.6%</td>
<td>6.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding
Autos</td>
<td>0.2%</td>
<td>0.3%</td>
<td>5.2%</td>
<td>7.3%</td>
<td>7.6%</td>
<td>7.1%</td>
</tr>
</tbody>
</table>
U.S. Pending Home Sales Stabilize 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 14, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114f.jpg" align="left" border="0" height="265" width="353">
The National Association of Realtors reported that for
September, level of pending home sales held steady at the August level.
That level was, however, still down 20.4% from one year earlier and
24.4% year to date.
The latest monthly figure is about one third below the peak
average level during 2005. The data date back only to 2001.
These figures are analogous to the new home sales data from
the Commerce Dept. in that they measure home sales when the sales
contract is signed, not at the time the sale is closed.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114g.jpg" align="right" border="0" height="265" width="353">
In further confirmation of the slow rate of home sales, the
Realtors indicated in an earlier report that the number of homes on the
market and available for sale rose September to a level 16.3% above the
year earlier level.
In the Western part of the nation, sales were about unchanged
m/m but remained down 25.6% from one year earlier.
In the Northeast, pending home sales are down 23.1% y/y. In
the Midwest sales are down 14.4% and in the South sales are down 19.7%.
The pending home sales data are available in Haver's PREALTOR
database and the number of homes on the market are in the REALTOR
database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Pending
Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Y/Y</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total</td>
<td>85.7</td>
<td>85.5</td>
<td>-20.4%&nbsp;</td>
<td>112.1&nbsp;</td>
<td>124.2</td>
<td>120.5&nbsp;</td>
</tr>
</tbody>
</table>
European Car Registrations Put in
Another Good Month 
by <a href="/comment/Brusca.html">Robert
Brusca</a> November 14 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071115d.jpg" align="left" border="0" height="265" width="353">
European car registrations jumped by 11.6% Y/Y following a
drop of 8.2% in September. Despite gains in two of the past three
months, sales are still lower year to date in 2007, by 0.4% compared to
sales last year. Germany lags the most as its year-to-date (YTD) sales
are lower by 7.7% through October. Spain is also lagging but with sales
off by 1.6% YTD. Italy is up strongly, by 6.9%, on a year-to-date
basis- surprising for a country where growth has been so weak. The UK
and France have stronger year-to-date numbers of 1.4% and 0.9%
respectively. Auto sales are mostly weak on the back of the German VAT
tax hike that shoved sales into late 2006 to avoid the tax. Apart from
that, European sales are doing ok. Excluding Germany European auto
sales are up by 2.6% over last year on a YTD basis. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">Ezone Car
Registrations </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo %</td>
<td colspan="2">3-Mo Trend From</td>
<td colspan="2">6-Mo Trend From</td>
<td colspan="2">12-Mo Trend From</td>
</tr>
<tr class="grey3">
<td class="firstcol">All Seas Adj</td>
<td>Oct 07</td>
<td>Sep 07</td>
<td>Aug 07</td>
<td>Oct 07</td>
<td>Sep 07</td>
<td>Oct 07</td>
<td>Sep 07</td>
<td>Oct 07</td>
<td>Sep 07</td>
</tr>
<tr class="grey2">
<td class="firstcol">Ezone Registrations</td>
<td>11.6%</td>
<td>-8.2%</td>
<td>3.8%</td>
<td>28.0%</td>
<td>-17.5%</td>
<td>32.2%</td>
<td>-10.9%</td>
<td>4.2%</td>
<td>-4.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Germany:</td>
<td>6.2%</td>
<td>-7.4%</td>
<td>6.3%</td>
<td>19.5%</td>
<td>5.4%</td>
<td>31.6%</td>
<td>-5.5%</td>
<td>-4.1%</td>
<td>-11.1%</td>
</tr>
<tr class="grey2">
<td class="firstcol">France (WDA)</td>
<td>-0.2%</td>
<td>3.7%</td>
<td>-4.1%</td>
<td>-2.9%</td>
<td>12.0%</td>
<td>11.7%</td>
<td>7.5%</td>
<td>4.6%</td>
<td>7.7%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Italy</td>
<td>11.5%</td>
<td>-10.6%</td>
<td>10.5%</td>
<td>47.2%</td>
<td>-39.0%</td>
<td>10.8%</td>
<td>-12.4%</td>
<td>8.5%</td>
<td>-0.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Spain</td>
<td>11.4%</td>
<td>-9.5%</td>
<td>5.3%</td>
<td>27.3%</td>
<td>-25.0%</td>
<td>28.1%</td>
<td>-25.8%</td>
<td>3.8%</td>
<td>-7.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">UK</td>
<td>7.1%</td>
<td>22.0%</td>
<td>-20.0%</td>
<td>19.6%</td>
<td>-0.3%</td>
<td>11.6%</td>
<td>-8.2%</td>
<td>7.2%</td>
<td>-0.6%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Base Month of Calc</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>Jul-07</td>
<td>Jul-07</td>
<td>Jun-07</td>
<td>Apr-07</td>
<td>Mar-07</td>
<td>Oct-06</td>
<td>Sep-06</td>
</tr>
</tbody>
</table>
Fed's Loan Officer Survey Shows
Drastic Tightening of Mortgage Lending, Weakening of Banks' Mortgage
Demand 
by <a href="/comment/Stone.html">Carol
Stone</a> November 14, 2007


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114h.jpg" align="left" border="0" height="265" width="353">
This past spring, as disruptions in the residential mortgage
market became more severe, the Federal Reserve's Division of Monetary
Affairs revised some of the relevant questions on its quarterly Senior
Loan Officer Opinion Survey. Rather than inquiring about mortgage
demand and lending policies in general, they broke the category down
into three, "prime", "subprime" and "nontraditional". While this
modification is more descriptive of banks' current situations, it gave
no basis for comparison of current practice with previous periods.
So last week, following the release of the Q4 survey data, a
number of Haver clients called the Client Hotline, asking if there
wasn't something we could do with the information. Carol Stone here at
Haver devised a method for re-combining the three new questions into an
overall mortgage item.
On the lending policy aspect, banks report whether they have
"tightened" lending standards "considerably" or "somewhat" or "eased
considerably" or "somewhat" or left their lending policy "basically
unchanged". We simply added the responses together for each loan type
and took that total as a percentage of the total responses. This
ignores the response "do not offer" for each one, so the answers we've
used cover only banks that are active lenders in each category.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071114i.jpg" align="right" border="0" height="265" width="353">
The results show a dramatic policy shift. Through nearly all
of 2006, banks were easing their lending approval criteria, at least in
a modest way. They switched toward tightening in Q4 and then moved much
more aggressively in the new year. The old "total" mortgage series
shows a net tightening of 16.4% in the January survey; the Haver
calculations show that doubling by April to 32.7% and reaching 50% in
the latest poll. The actual measure here is a "net", that is, those
tightening less those easing, but in the last three quarters, no one
has eased lending standards. So the latest responses show 50%
tightening and 50% "basically unchanged". In the table below, we show
the original Federal Reserve series in regular typeface, and the Haver
figures in italics.
Demand for home mortgages -- at least as reported by the
responding banks -- is weakening, although the recent performance here
is no worse than last year. In fact, Q3 and Q4 of 2006 show the biggest
negatives, -58.5% and -60.4%, respectively. During 2007, the weighted
total of the new series moderated during the spring and early summer,
but the latest survey shows renewed erosion to -48.5%. These demand
figures reflect not only overall consumer demand for home purchase
and/or other mortgage credit, but also the competitive mix of lending
institutions. The moderation of banks' demand experience during part of
this year could indicate a relative turn toward banks as mortgage
companies and others pulled back more severely from the market.
We were cautioned by Federal Reserve analysts about making
these combination series, and we, in turn, need to pass that caution to
you as you use them. These are rough guides to the direction and degree
of changes in bank mortgage lending standards and loan demand. But they
cannot be numerically precise. The reason is that the three types of
loans, prime, subprime and nontraditional, are not completely separate
from each other. Prime loans include some nontraditional loans, as do
subprime loans. Other nontraditional loans are classified by the
lenders as a distinct category, neither prime nor subprime. So there is
an indeterminate amount of double-counting in our simple summation of
the total survey responses. Nonetheless, the resulting series look like
what we'd expect: greatly tightening lending policies and weakening
loan demand. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Senior
Loan Officers Survey</th>
<th scope="col">Oct 2007</th>
<th scope="col">July 2007</th>
<th scope="col">Apr 2007</th>
<th scope="col">Jan 2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total
Mortgages: Haver Series: Net Tightening</td>
<td>50.0</td>
<td>30.8</td>
<td>32.7</td>
<td>16.4</td>
<td>-4.2</td>
<td>-3.4</td>
<td>-3.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Prime</td>
<td>40.8</td>
<td>14.3</td>
<td>15.1</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nontraditional</td>
<td>60.0</td>
<td>40.5</td>
<td>45.5</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Subprime</td>
<td>55.5</td>
<td>56.3</td>
<td>56.3</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Haver
Mortgage Series: &nbsp; 
Net Demand</td>
<td>-48.5</td>
<td>-19.4</td>
<td>-17.7</td>
<td>-37.0</td>
<td>-46.5</td>
<td>-11.9</td>
<td>-19.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Prime</td>
<td>-51.0</td>
<td>-10.0</td>
<td>-18.9</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nontraditional</td>
<td>-45.0</td>
<td>-21.3</td>
<td>-15.9</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Subprime</td>
<td>-50.0</td>
<td>-43.8</td>
<td>-18.8</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
</body></html>

Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071113d.jpg" align="left" border="0" height="265" width="353">
After remaining steady in October at -18.1%, the ZEW indicator
of economic sentiment among institutional investors and analysts for
the next 6 months took a tumble in November, falling sharply to -32.5%.
The decline brought the indicator to its lowest value since February
1993. (The history of this indicator is shown in the first chart.)
The indicator is a percent balance measure, that is, it
measures the difference between those participants who are optimistic
and those who are pessimistic. In October, the pessimists outweighed
the optimists by 32.5%. The indicator is based on the qualitative
assessments of the participants regarding the macro economic outlook,
the inflation rate, short and long term interest rates, the stock
market and exchange rates. The decline in sentiment reflects the
deterioration that has been taking place in most of these components.
The continuing uncertainty
regarding the magnitude and spread of the sub prime mortgage collapse
in the U. S. has been a major depressant, but other factors have also
contributed to the decline in sentiment. Inflation has been rising and
in October was 2.45% compared with 1.65% in January. During the time
that the survey took place--October 29 to November 12, the Euro rose
7.23% from $1.3596 to $1.4579. The Frankfurt Xetra Dax (12/31/87=1000)
stock market index declined 2.5% during this same time. The second
chart shows the year over year changes in the daily figures for the
Euro and the Dax stock market index from late October to date, roughly
the time during which the survey took place.
In contrast to their pessimistic views about the next six
months, investors and analysts continue to view current conditions very
favorably with the optimists outweighing the pessimists by 70%, one of
the highest balances on record. The third chart shows the history of
the indicator of current conditions. 

 <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071113e.jpg" height="265" width="314"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071113f.jpg" height="265" width="314">

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;ZEW
INDICATOR OF ECONOMIC SENTIMENT&nbsp; (% Balance)&nbsp;</th>
<th scope="col">Nov 07</th>
<th scope="col">Oct 07&nbsp;</th>
<th scope="col">Nov 06&nbsp;</th>
<th scope="col">M/M&nbsp; Dif&nbsp;</th>
<th scope="col">Y/Y&nbsp;&nbsp;&nbsp;&nbsp;
Dif&nbsp;</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">
Macro Expectation (Next 6 Months)
</td>
<td>-32.5</td>
<td>-18.1</td>
<td>-28.5</td>
<td>-14.4</td>
<td>-4.0</td>
<td>22.3</td>
<td>34.8</td>
<td>44.6</td>
</tr>
<tr>
<td class="firstcol">Current
Economic Conditions&nbsp;</td>
<td>70.0</td>
<td>70.2</td>
<td>53.0</td>
<td>-0.2</td>
<td>17.0</td>
<td>18.3</td>
<td>-61.8</td>
<td>-67.7</td>
</tr>
</tbody>
</table>
</body></html>

After remaining steady in October at -18.1%, the ZEW indicator of economic sentiment among institutional investors and analysts for the next 6 months took a tumble in November, falling sharply to -32.5%. The decline brought the [...]

Economic Sentiment Among the German Financial Community Takes a Tumble in November

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071113h.jpg" align="left" border="0" height="265" width="353">
In October, as energy prices have surged again, the Euro area
is suffering inflation bulging beyond the limits of its ceiling. We
know that the ECB is not happy with this development even though most
of it is due to oil prices and core inflation seems less of a problem.
Still the ECB makes policy without an explicit reference to core prices
unlike the Federal Reserve in the US.
Despite a surging Euro that should help to combat any true
inflation forces in the Euro area economy, the ECB remains wary of this
over top inflation partly because of the ongoing strong money and
credit growth in the EMU. So Europeans find themselves in the sticky
position of seeing inflation flare, the central bank remain wary, ready
to act, even as their currency value remains quite strong and the
competitiveness pressures from that strength are squelching growth and
killing Europe&#8217;s export orders. The European policy dilemma has become
an economic oxymoron: the ECB&#8217;s own threat to hike rates is further
bolstering the euro and further exacerbating the economic problems
within the zone as the ECB does nothing and worries about inflation
pressure which worsen.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> Euro
area &amp; Friends: Headline Inflation Yr/Yr</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Year/year</td>
<td colspan="2">Mo/Mo</td>
<td>3Mo: AR</td>
<td>6Mo:Ar</td>
</tr>
<tr>
<td class="firstcol">Core HICP</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>Oct-07</td>
<td>Sep-07</td>
<td>May-07</td>
<td>Apr-07</td>
</tr>
<tr>
<td class="firstcol">Belgium</td>
<td style="color: red;">2.2%</td>
<td>1.5%</td>
<td>1.2%</td>
<td>0.8%</td>
<td>0.1%</td>
<td style="color: red;">3.5%</td>
<td style="color: red;">2.1%</td>
</tr>
<tr>
<td class="firstcol">France</td>
<td style="color: red;">2.1%</td>
<td>1.6%</td>
<td>1.3%</td>
<td>0.2%</td>
<td>0.1%</td>
<td style="color: red;">2.6%</td>
<td style="color: red;">2.3%</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td style="color: red;">2.7%</td>
<td style="color: red;">2.6%</td>
<td>2.0%</td>
<td>0.2%</td>
<td>0.7%</td>
<td style="color: red;">3.1%</td>
<td style="color: red;">2.7%</td>
</tr>
<tr>
<td class="firstcol">Greece</td>
<td style="color: red;">3.1%</td>
<td style="color: red;">2.9%</td>
<td style="color: red;">2.7%</td>
<td>0.4%</td>
<td>0.3%</td>
<td>1.1%</td>
<td style="color: red;">4.0%</td>
</tr>
<tr>
<td class="firstcol">Ireland</td>
<td style="color: red;">3.0%</td>
<td style="color: red;">2.9%</td>
<td style="color: red;">2.3%</td>
<td>0.2%</td>
<td>0.3%</td>
<td style="color: red;">2.3%</td>
<td style="color: red;">2.5%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td style="color: red;">2.3%</td>
<td>1.8%</td>
<td>1.7%</td>
<td>0.7%</td>
<td>0.3%</td>
<td style="color: red;">4.7%</td>
<td style="color: red;">3.3%</td>
</tr>
<tr>
<td class="firstcol">Luxembourg</td>
<td style="color: red;">3.6%</td>
<td style="color: red;">2.5%</td>
<td>1.8%</td>
<td>0.6%</td>
<td>0.0%</td>
<td style="color: red;">2.8%</td>
<td style="color: red;">2.7%</td>
</tr>
<tr>
<td class="firstcol">The Netherlands</td>
<td>1.6%</td>
<td>1.3%</td>
<td>1.0%</td>
<td>0.4%</td>
<td>0.0%</td>
<td>1.5%</td>
<td>0.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="8">EU:
Other HICP/CPI</td>
</tr>
<tr>
<td class="firstcol">UK(HICP)</td>
<td style="color: red;">2.0%</td>
<td>1.7%</td>
<td>1.8%</td>
<td>0.5%</td>
<td>0.1%</td>
<td style="color: red;">2.7%</td>
<td>1.5%</td>
</tr>
</tbody>
</table>
</body></html>

In October, as energy prices have surged again, the Euro area is suffering inflation bulging beyond the limits of its ceiling. We know that the ECB is not happy with this development even though most of it is due to oil prices and [...]

Inflation Trends Turn Bleak in the Euro Area…

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/071113g.jpg" align="left" border="0" height="265" width="353">
Spending patterns improved in September from August despite
their downward revision. Sequential rates of growth find 3-month and
6-month rates of growth are generally improved form their respective
year ago pace. Nominal auto sales were especially strong in the quarter
expanding at a growth rate of better than 20%. But excluding autos
consumer spending is still very restrained. For the quarter real German
retail sales excluding autos are up by just a rate of 0.7%. Nominal
retail sales are up at a 1.6% pace in the quarter. Nominal food and
tobacco sales are off by 0.9% in the quarter. Clothing and shoe sales
are up by just 2.3%. The sequential growth rates show more pop than the
quarterly growth rates do. Time will tell if the rebound is authentic
or not.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col">German Real and Nominal Retail Sales New QTR </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>Sep-07</td>
<td>Aug-07</td>
<td>Jul-07</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>YrAGo</td>
<td>New Qtr Saar</td>
</tr>
<tr>
<td class="firstcol">Retail Ex auto</td>
<td>2.0%</td>
<td>-1.1%</td>
<td>0.6%</td>
<td>6.3%</td>
<td>3.7%</td>
<td>1.9%</td>
<td>5.6%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">MV and Parts</td>
<td>-2.4%</td>
<td>4.3%</td>
<td>0.8%</td>
<td>10.7%</td>
<td>12.8%</td>
<td>-2.5%</td>
<td>15.2%</td>
<td>21.8%</td>
</tr>
<tr>
<td class="firstcol">Food Beverages &amp; Tobacco</td>
<td>2.9%</td>
<td>-0.8%</td>
<td>-0.2%</td>
<td>7.7%</td>
<td>4.4%</td>
<td>1.7%</td>
<td>5.1%</td>
<td>-0.9%</td>
</tr>
<tr>
<td class="firstcol">Clothing footwear</td>
<td>3.8%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>18.3%</td>
<td>8.2%</td>
<td>14.5%</td>
<td>3.4%</td>
<td>2.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">Real</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">Retail Ex auto</td>
<td>1.6%</td>
<td>-1.5%</td>
<td>0.8%</td>
<td>3.7%</td>
<td>1.7%</td>
<td>0.7%</td>
<td>5.1%</td>
<td>0.7%</td>
</tr>
</tbody>
</table>
</body></html>

Spending patterns improved in September from August despite their downward revision. Sequential rates of growth find 3-month and 6-month rates of growth are generally improved form their respective year ago pace. Nominal auto sales [...]

German Sales Trends Improving; But Still a Moderate Quarter

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

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

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

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

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

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

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

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

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

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

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The Housing Market Index, compiled by the National Association of Home Builders/Wells Fargo, fell 5.9% (-25.6% y/y) to 32 in June after declining 15.0% in May. It was well 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 6.85% in the first two weeks of June versus 6.82% during all of May. It remained below the high of 7.79% in the last week of October 2023, according to Freddie Mac.

The single-family sales measure declined 5.4% (-27.1% y/y) this month to 35 after falling 17.8% in May. The prospective sales index in six months declined 4.8% (-14.9% y/y) to 40 after falling 2.3% in May. It was the lowest level since November 2023. The traffic of prospective buyers’ index fell 8.7% (-25.0% y/y) to 21 in June after declining 8.0% in May.

Housing performance weakened across most of the country during June. In the South, the index dropped 6.3% (-30.2% y/y) to 30 this month, after falling 15.8% in May. The index for the Midwest declined 2.5% both m/m and y/y to 39 after falling 7.0% in May. The index in the West dove 18.5% (-42.1% y/y) to 22 after plunging 25.0% in May. Moving higher, the Northeast index rose 4.8% (-29.0% y/y) to 44, after falling 2.3% in May.

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 figures are 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 stands at lowest level since December 2022.
- All component measures fall.
- Most regional indexes retreat.

U.S. Home Builders Index Declines in June

Winnie Tapasanun

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Industrial production (IP) fell 0.2% m/m in May following an upwardly revised 0.1% increase in April (0.0% initially) and an upwardly revised 0.2% decline in March (-0.3% previously), data from the Federal Reserve Board showed. A 0.0% m/m for May had been expected in the Action Economics Forecast Survey. The year-on-year rate of increase decelerated to 0.6% in May, the lowest since December, from 1.5% in April; nevertheless, it was an improvement from +0.1% y/y in May 2024. The May IP index was at 103.6, slightly down from its recent high of 104.0 in February; however, having remained 2.1% above its recent low of 101.5 in January 2024.

By **industry groups**, manufacturing production edged up 0.1% (0.5% y/y) in May, the third m/m increase in four months, after a downwardly revised 0.5% drop in April (-0.4% initially). Durable goods production rose 0.4% (0.9% y/y) in May, up for the third month in four, reversing a 0.4% decline in April. This reflected m/m output rises of 4.9% (0.9% y/y) in motor vehicles & parts, 1.1% (5.7% y/y) in aerospace & miscellaneous transportation equipment, 0.9% (2.4% y/y) in electrical equipment, appliances & components, 0.9% (-1.2% y/y) in furniture & related products, 0.9% (4.1% y/y) in wood products, and 0.2% (-1.5% y/y) in primary metals. Notably, aircraft & parts production rose 2.0% (9.9% y/y) in May, the seventh straight m/m rise, on top of a 1.4% increase in April. To the downside, the following durable goods categories fell m/m in May, including output drops of 1.6% (+1.2% y/y) in nonmetallic mineral products, 1.2% (-2.2% y/y) in fabricated metal products, 1.0% (+1.0% y/y) in machinery, 0.4% (-3.9% y/y) in miscellaneous durables goods, and 0.2% (+4.8% y/y) in computer & electronic products.

Nondurable goods production fell 0.2% (+0.4% y/y) in May following a 0.6% decrease in April and two successive m/m increases. The May fall reflected m/m output declines of 1.7% (-0.9% y/y) in printing & related support activities, 1.4% (-2.7% y/y) in petroleum & coal products, and 0.3% (-0.9% y/y) in food, beverages & tobacco. To the upside, the following nondurable goods categories rose m/m in May, including output rises of 2.2% (-3.7% y/y) in apparel & leather goods, 0.8% (-1.6% y/y) in textiles & product mills, 0.6% (-0.5% y/y) in paper, 0.1% (4.1% y/y) in chemicals, and 0.1% (-2.4% y/y) in plastics & rubber products.

Utilities output declined 2.9% (-1.6% y/y) in May, the third m/m decrease in four months, following an upwardly revised 4.9% gain in April (+3.3% initially). In contrast, mining activity ticked up 0.1% (2.9% y/y), up for the third month in four, after a 0.3% April decline (unrevised).

By **market groups**, construction supplies production slid 0.7% (+1.6% y/y) in May after a 1.2% drop in April and two consecutive m/m rises. Consumer goods output fell 0.2% (-0.5% y/y) in May, the third successive m/m fall, after a 0.3% decline in April, reflecting a 2.0% rebound (-1.9% y/y) in durable consumer goods and a 0.8% drop (-0.1% y/y) in nondurable consumer goods. Materials production declined 0.2% (+0.9% y/y), down for the second month in three, following a 0.5% April gain. To the upside, business equipment output grew 0.8% (2.7% y/y) in May, the seventh straight m/m rise, on top of a 0.2% increase in April.

In **special classifications**, factory output of selected high-tech industries rose 0.4% (9.8% y/y) in May, the fifth m/m rise in six months, after an upwardly revised 2.8% gain in April (+1.4% initially). Manufacturing production excluding selected high-tech industries inched up 0.1% (0.2% y/y) in May, the third m/m increase in four months, following a 0.6% drop in April, while manufacturing production excluding selected high-tech and motor vehicles & parts fell 0.3% (+0.2% y/y) following a 0.5% April decline and two consecutive m/m gains.

Capacity utilization fell to 77.4% in May, the lowest since January, from 77.7% in both April (unrevised) and March (77.8% previously). The Action Economics Forecast Survey forecasted 77.7%. The May reading was 2.2 percentage points below its long-run (1972–2024) average. Manufacturing capacity utilization held at 76.7% in May and April (76.8% initially); the May rate was 1.5 percentage points below its long-run average.

Industrial production and capacity data are in Haver’s **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.

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- May IP -0.2% (+0.6% y/y), led by a 2.9% m/m decrease in utilities output.
- Mfg. IP +0.1%, reflecting m/m gains of 4.9% in auto production and 1.1% in aerospace & misc. transp. equipt. (w/ durable goods up 0.4% and nondurable goods down 0.2%).
- Mining activity edges up 0.1%, the third m/m increase in four months.
- Key categories in market groups mostly drop.
- Capacity utilization down 0.3%pt. to a four-month-low 77.4%; mfg. capacity utilization unchanged at 76.7%.

U.S. Industrial Production Declines in May, the Second M/M Fall in Three Months

Sandy Batten

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Total retail sales slumped 0.9% m/m (+3.3% y/y) in May following a downwardly revised 0.1% monthly decline in April (previously +0.1% m/m). The May decline was led by a 3.5% m/m (+2.5% y/y) drop in motor vehicle and parts sales and a 2.0% m/m (-6.9% y/y) price-related decline in sales at gasoline stations. This was the fourth consecutive monthly decline in gasoline sales. Sales excluding autos fell 0.3% m/m (+3.5% y/y) in May after a downwardly revised unchanged reading in April (previously +0.1% m/m). The Action Economics Forecast Survey looked for total sales to fall 0.6% m/m in May and for sales ex autos to rise 0.2% m/m. Sales excluding autos and gasoline slipped 0.1% m/m in May after a 0.1% m/m increase in April.

On a more positive note, sales in the retail control group, which excludes autos, building materials, gasoline and food services, rebounded 0.4% m/m (5.0% y/y) in May after an upwardly revised 0.1% m/m decline in April (previously -0.2% m/m). These sales are used in the construction of personal consumption expenditures in the NIPA accounts. While these sales slowed in April and May from a relatively strong February and March, the April/May average is still 2.9% at an annual rate above the Q1 average, providing a solid foundation for Q2 PCE.

By category, in addition to declines in auto and gasoline sales, building material and garden equipment sales slumped 2.7% m/m, their first monthly decline in three months. Sales at food service and drinking places declined 0.9% m/m, their first monthly decline in three months. Sales at electronics and appliance stores fell 0.6% m/m, their first decline in four months. In contrast, sales at furniture stores continued to rise, increasing 1.2% m/m, their fourth consecutive monthly gain. Sales at sporting goods, etc. stores rose 1.3% m/m but failed to offset a 3.0% m/m decline in April. Sales at nonstore retailers rose 0.9% m/m in May for their fourth consecutive monthly gain. Miscellaneous store sales jumped 2.9% m/m.

Retail sales data can be found in Haver’s **USECON** database. The expectations figures are from the Action Economic Forecast Survey in **AS1REPNA**.

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- Sales fell a more-than-expected 0.9% m/m, led by a 3.5% decline in motor vehicle sales and a 2.0% drop in gasoline store sales.
- Sales excluding autos unexpectedly fell 0.3% m/m.
- In contrast, sales in the control group (used to estimate PCE) rebounded 0.4% m/m.

U.S. Retail Sales Fell More than Expected in May 2025

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Import prices were unchanged during May after rising 0.1% in April, and falling 0.4% in March, according to the Bureau of Labor Statistics. A 0.3% decline had been expected in the Action Economics Forecast Survey. The year-on-year increase picked up to 0.2% but remained below the recent high of 2.2% in December. Export prices fell 0.9% during May after an unrevised 0.1% April gain. A 0.2% decline had been expected. The y/y rise eased to 1.7% from 1.9% in April and was the slowest gain since November.

The steady import price index in May included a 4.0% drop (-15.8% y/y) in imported fuel prices, the third consecutive month of sharp decline. The decline in imported fuel costs reflected a 9.0% fall (+88.4% y/y) in natural gas, a 2.7% drop (-18.8% y/y) in fuel oil costs, a 3.7% decline (-17.4% y/y) in petroleum & petroleum products and a 5.4% drop (-17.1% y/y) in crude oil prices. Nonfuel import prices fell 0.2% (+7.7% y/y) in May following a 17% April increase. Import prices for nonfuel industrial supplies & materials rose 1.3% (5.4% y/y) and capital goods rose 0.2% (1.1% y/y), but foods, feeds & beverages prices declined 0.3% (+6.9% y/y). Import prices for automotive vehicles & parts edged 0.1% higher (1.1% y/y) and consumer goods excluding autos increased 0.2% (-0.7% y/y) after rising 0.3% in April.

The May decline in export prices reflected a 1.0% (1.7% y/y) drop in nonagricultural prices following a 0.1% dip. Petroleum & petroleum product prices fell 3.8% (-11.4% y/y). Industrial supplies & materials export prices dropped 2.9% (+1.0% y/y) in May, down for the third straight month. In contrast, agricultural export prices rose 0.2% (1.8%) following a 0.4% gain in April. The cost of capital goods rose 0.4% (1.9% y/y) after two straight 0.3% increases. Prices of consumer goods excluding autos rose 0.2% (1.4% y/y) after a 0.7% rise, while automotive vehicles & parts prices rose 0.2% (2.7% y/y) following a 0.9% April gain. Foods, feeds & beverages prices rose 0.3% (3.1% y/y) after increasing 0.4% in April.

These import and export price series are not seasonally adjusted; they can be found in Haver’s **USECON** database. Detailed figures are available in the **USINT** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Sharp decline in imported fuel costs is offset by increases in other products.
- Export price decline reflects lower petroleum prices.

U.S. Import Prices Hold Steady in May While Export Prices Decline

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Total business inventories were unchanged in April from March (+2.2% y/y) after having inched up 0.1% m/m in March. The Action Economics Forecast Survey had anticipated an unchanged reading. Manufacturing inventories edged down 0.1% m/m (+0.9% y/y) following five consecutive monthly gains. Retail inventories were essentially unchanged (-0.03% m/m) after having declined in three of the four previous months. In contrast, wholesale inventories rose 0.2% m/m (2.3% y/y) in April for their fourth consecutive monthly gain.

Drilling down into retail inventories, auto inventories declined 0.8% m/m in April for their sixth consecutive monthly fall. Retail inventories excluding autos increased 0.3% m/m for their fourth consecutive monthly gain. General merchandise store inventories fell 0.3% m/m, their second decline in the past three months. Inventories increased in all other major retail categories, led by a 1.0% m/m increase in food and beverage store inventories. Inventories at building materials and garden equipment stores rose 0.8% m/m following two consecutive monthly declines. Furniture store inventories increased 0.4% m/m, their third monthly increase in the past four months.

Total business sales slipped 0.1% m/m (+3.8% y/y) in April, their first monthly decline in three months. Wholesale sales edged up 0.1% (6.0% y/y), their third consecutive monthly rise. Factory sales fell 0.3% m/m (+0.6% y/y) on top of a 0.2% monthly decline in March. Retail sales decreased 0.2% m/m (+4.7% y/y) in April though in a separate report also released today, retail sales slumped 0.9% m/m in May, led by declines in auto and gasoline sales.

With the little change in both sales and inventories in April, the inventory/sales (I/S) ratio was unchanged after having fallen in four of the five previous months. The 1.38 reading in April tied the reading in the previous month as the lowest one since September 2023. The I/S ratios for retailers and wholesalers were also unchanged in April from March while the manufacturing I/S ratio increased 0.6% m/m.

The manufacturing and trade data are in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Total inventories were unchanged in April from March.
- Wholesale inventories rose for the fourth consecutive month while retail and factory inventories slipped.
- Sales edged down 0.1% m/m, the first monthly decline in three months, with declines in both factory and retail sales.
- With little change in both sales and inventories, the inventories/sales ratio was unchanged in April following two consecutive monthly declines.

Economy in Brief: November 2007

Jump to:

European Car Registrations Put in Another Good Month

U.S. Pending Home Sales Stabilize

U.S. Retail Sales About As Expected

U.S. PPI Total & Core Weak

U.S. PPI Total & Core Weak

Economic Sentiment Among the German Financial Community Takes a Tumble in November

Inflation Trends Turn Bleak in the Euro Area…

German Sales Trends Improving; But Still a Moderate Quarter