Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100310a.jpg" align="left" border="0" height="265" width="353">
The employment agency Manpower Inc. indicated roughly stable
corporate hiring intentions for the second quarter. Their seasonally
adjusted reading of 5 compared to a 1Q figure of 6, but both were
improved from the net-layoff readings late during 2009. Those recession
readings were the worst of the series' history which dates to 1976.
Since 1990 there has been a 77% correlation between the Manpower Index
and the three-month change in payroll employment.
Hiring intentions for 2Q improved in the relatively stable
education &amp; health, government, information, nondurable
manufacturing and professional business service sectors, but sustained
improvement in each versus last year was scattered. Intentions in the
construction and durable manufacturing sectors continued to indicate
net-layoffs though the layoffs in the latter sector diminished
considerably.
The Manpower Inc Employment Outlook Survey is a quarterly
measurement of hiring intentions of more than 15,000 employers in 473
cities. Employers declare their intentions to increase, decrease, or
maintain the size of their present workforce for the upcoming
three-month period. The survey was designed with the assistance of the
Survey Research Center of the University of Michigan. The current
seasonal adjustments are by Manpower, Inc. Haver calculated the
historical seasonally adjusted series.
The data are available in Haver's SURVEYS
database. Manpower indicates that seasonally-adjusted industry data are
under development.
Assessing the Impact of Education and Marriage on
Labor Market Exit Decisions of Women from the Federal Reserve
Bank of Atlanta is available <a href="http://www.frbatlanta.org/documents/pubs/wp/wp1002.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">Manpower Inc. Employment Outlook Survey</a></th>
<th scope="col">2Q '10</th>
<th scope="col">1Q '10</th>
<th scope="col">4Q '09</th>
<th scope="col">3Q '09</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All Industries Net Hiring
Strength (SA)</td>
<td>5</td>
<td>6</td>
<td>-2</td>
<td>-2</td>
<td>1</td>
<td>13</td>
<td>18</td>
</tr>
<tr>
<td class="firstcol">
Increase (NSA)</td>
<td>16</td>
<td>&nbsp;12</td>
<td>&nbsp;12</td>
<td>&nbsp;15</td>
<td>15</td>
<td>&nbsp;24</td>
<td>&nbsp;27</td>
</tr>
<tr class="odd">
<td class="firstcol">
Decrease (NSA)</td>
<td>8</td>
<td>12</td>
<td>14</td>
<td>13</td>
<td>14</td>
<td>11</td>
<td>9</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>-12</td>
<td>-10</td>
<td>2</td>
<td>-4</td>
<td>-5</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Education &amp;
Health</td>
<td>4</td>
<td>2</td>
<td>-4</td>
<td>0</td>
<td>1</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Financial Activities</td>
<td>2</td>
<td>1</td>
<td>2</td>
<td>2</td>
<td>3</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Government</td>
<td>-3</td>
<td>-8</td>
<td>-4</td>
<td>-2</td>
<td>-1</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Information</td>
<td>0</td>
<td>-5</td>
<td>-4</td>
<td>-5</td>
<td>-3</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Leisure &amp;
Hospitality</td>
<td>4</td>
<td>2</td>
<td>18</td>
<td>14</td>
<td>13</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Manufacturing -
Durable</td>
<td>-3</td>
<td>-8</td>
<td>-6</td>
<td>-7</td>
<td>-5</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Manufacturing -
Nondurable</td>
<td>1</td>
<td>-3</td>
<td>0</td>
<td>-4</td>
<td>-2</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Professional
Business Services</td>
<td>5</td>
<td>3</td>
<td>8</td>
<td>9</td>
<td>9</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
</body></html>

The employment agency Manpower Inc. indicated roughly stable corporate hiring intentions for the second quarter. Their seasonally adjusted reading of 5 compared to a 1Q figure of 6, but both were improved from the net-layoff readings [...]

Manpower Survey Indicates Positive But Limited Jobs Growth

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100310a.jpg" align="left" border="0" height="265" width="353">
The employment agency Manpower Inc. indicated roughly stable
corporate hiring intentions for the second quarter. Their seasonally
adjusted reading of 5 compared to a 1Q figure of 6, but both were
improved from the net-layoff readings late during 2009. Those recession
readings were the worst of the series' history which dates to 1976.
Since 1990 there has been a 77% correlation between the Manpower Index
and the three-month change in payroll employment.
Hiring intentions for 2Q improved in the relatively stable
education &amp; health, government, information, nondurable
manufacturing and professional business service sectors, but sustained
improvement in each versus last year was scattered. Intentions in the
construction and durable manufacturing sectors continued to indicate
net-layoffs though the layoffs in the latter sector diminished
considerably.
The Manpower Inc Employment Outlook Survey is a quarterly
measurement of hiring intentions of more than 15,000 employers in 473
cities. Employers declare their intentions to increase, decrease, or
maintain the size of their present workforce for the upcoming
three-month period. The survey was designed with the assistance of the
Survey Research Center of the University of Michigan. The current
seasonal adjustments are by Manpower, Inc. Haver calculated the
historical seasonally adjusted series.
The data are available in Haver's SURVEYS
database. Manpower indicates that seasonally-adjusted industry data are
under development.
Assessing the Impact of Education and Marriage on
Labor Market Exit Decisions of Women from the Federal Reserve
Bank of Atlanta is available <a href="http://www.frbatlanta.org/documents/pubs/wp/wp1002.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">Manpower
Inc. Employment Outlook Survey</a></th>
<th scope="col">2Q '10</th>
<th scope="col">1Q '10</th>
<th scope="col">4Q '09</th>
<th scope="col">3Q '09</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">All Industries Net Hiring
Strength (SA)</td>
<td>5</td>
<td>6</td>
<td>-2</td>
<td>-2</td>
<td>1</td>
<td>13</td>
<td>18</td>
</tr>
<tr>
<td class="firstcol">
Increase (NSA)</td>
<td>16</td>
<td>&nbsp;12</td>
<td>&nbsp;12</td>
<td>&nbsp;15</td>
<td>15</td>
<td>&nbsp;24</td>
<td>&nbsp;27</td>
</tr>
<tr class="odd">
<td class="firstcol">
Decrease (NSA)</td>
<td>8</td>
<td>12</td>
<td>14</td>
<td>13</td>
<td>14</td>
<td>11</td>
<td>9</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>-12</td>
<td>-10</td>
<td>2</td>
<td>-4</td>
<td>-5</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Education &amp;
Health</td>
<td>4</td>
<td>2</td>
<td>-4</td>
<td>0</td>
<td>1</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Financial Activities</td>
<td>2</td>
<td>1</td>
<td>2</td>
<td>2</td>
<td>3</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Government</td>
<td>-3</td>
<td>-8</td>
<td>-4</td>
<td>-2</td>
<td>-1</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Information</td>
<td>0</td>
<td>-5</td>
<td>-4</td>
<td>-5</td>
<td>-3</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Leisure &amp;
Hospitality</td>
<td>4</td>
<td>2</td>
<td>18</td>
<td>14</td>
<td>13</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Manufacturing -
Durable</td>
<td>-3</td>
<td>-8</td>
<td>-6</td>
<td>-7</td>
<td>-5</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Manufacturing -
Nondurable</td>
<td>1</td>
<td>-3</td>
<td>0</td>
<td>-4</td>
<td>-2</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Professional
Business Services</td>
<td>5</td>
<td>3</td>
<td>8</td>
<td>9</td>
<td>9</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
UK Industrial Production Losses
Momentum &#8211; So What? 
by <a href="/comment/Brusca.html">Robert
Brusca</a> March 10, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100310b.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
UK IP Sinks
- Industrial output in the UK was set back in January unexpectedly.
Consumer durables and intermediate goods output fell sharply in January
a month with some considerable weather disruptions. January is sharp
departure from December when output rose by 0.9% on advances in all
major sectors. The detailed industry results do not show anything
worrisome as the key detailed industries do not reveal any with
back-to-back declines. Instead we see a 5.5% drop for textile and
leather after a 3.4% gain in December- that is volatility not weakness.
Motor vehicles also saw output fall by 2% in January after surging by
5.6% in December. While the January result was unexpected, &#8216;unexpected&#8217;
does always mean the start of a new trend, sometimes it is just a spate
of volatility.
Unexpected
events elsewhere - The month brought other unexpected
developments elsewhere as German exports fell and the German trade
surplus was chopped nearly in half, unexpectedly. We might be worried
except that this German report was preceded by a very strong orders
report that had strong foreign orders well represented. The German CPI
was up a bit more than expected as well &#8211; something the ECB will be
watching. In Asia, China&#8217;s exports were so strong they had everyone
geared for the prospect of some sort of global demand revival. Japan&#8217;s
core machinery orders, strong in a previous release, backed off in this
month&#8217;s report setting back hopes for an investment revival there. The
truth of the global economy is hidden somewhere in this tangle of
volatile monthly reports.
 Warning! Caveat
recovery - UK Prime Minister Gordon Brown warned on the
fragility of the expansion saying data would continue to go to and fro
and that recovery was not assured. Thanks for that confidence booster&#8230;
Biz as usual
- What you usually can depend on in recovery periods is to get mixed
signals. That much appears to still be true. One source of volatility
and concern may be lessening, however. Former EU Commission Prodi
declared the Greek crisis to be over and while that could be a bit of
good news we have to wonder if the declaration is premature given the
nature of Greece&#8217;s difficulties and past transgressions. One good bond
offering with high interest rates hardly signals that all is well.
Spain, Portugal and Italy will remain as EMU countries under the
markets&#8217; sharpest eye in the wake of the Greek problem even if Greece
remains on an upswing.
Caveats aside,
odds and data still favor the recovery continuing - The UK
recovery has flashed hot and cold signs for some time in this cycle.
The BOE is letting an inflation overshoot go by without acting, a clear
indication that the Bank does not see any overheating. Data releases
like today&#8217;s IP report only confirm the good judgment of the Bank and
its ability to see past monthly volatility in the run of reports. The
most likely situation is that growth in the UK and elsewhere continues.
The recession was deep, there is pent up demand, in Europe; the strong
social welfare system there helps to preserve demand. Meanwhile,
recovery still seems to be afoot around the world and for the most part
trade data have been strong confirming that some sort of global revival
is in place. While German export data may seem to question the notion
of strong growth and global economic revival, strong growth in China&#8217;s
exports seems to brand the German data as anomalies (along with German
order flows). As always we will stay tuned to the various monthly
reports. But there is no basis for the belief that the recovery is
being untracked apart from a streak of pure pessimism.
Pessimists
unite! You have nothing to lose since nothing is invested in the
market! - We know pessimism is still alive and well and
that part of that reluctance traces to the still low level interest
rates. Central banks are reluctant to boost rates even though market
rates are for the most part high above the levels banks are paying in
the interbank markets. Low official rates are contributing to money
(wealth) staying on the sidelines. We have had a very strong one-year
rally in global stock markets with low participation because so many
have been unwilling to commit funds even though he past year&#8217;s rally
was one of extraordinary scope. Money is continuing to pile up on the
sidelines and pessimism is now partly the product of a sour grapes
attitude by would-be investors who clearly have stayed on the side
lines for far too long. These sorts of considerations dog the ability
of those who have stayed out to objectively characterize the progress
of the markets and offer an unbiased the assessment of the economy and
its prospects. It will take a period of job growth being restored and
rates elevating to bring these skeptical once-burned twice-shy (and
therefore burned again by a different sort of fire) investors back to
the markets. Until then expect each monthly setback to be greeted by
the hoots and hollers of the pessimists who have sat back and largely
missed the rally to date. It&#8217;s all the fun that they can have.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">UK IP and
MFG </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">UK MFG</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q1 
Date</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG</td>
<td>-0.8%</td>
<td>0.9%</td>
<td>0.1%</td>
<td>0.9%</td>
<td>4.1%</td>
<td>-0.4%</td>
<td>2.0%</td>
<td>0.2%</td>
<td>-2.0%</td>
<td>-0.9%</td>
</tr>
<tr>
<td colspan="11" class="firstcol">Consumer</td>
</tr>
<tr class="odd">
<td class="firstcol">
C-Durables</td>
<td>-1.8%</td>
<td>0.7%</td>
<td>-1.0%</td>
<td>-7.9%</td>
<td>-4.6%</td>
<td>1.7%</td>
<td>7.3%</td>
<td>-0.2%</td>
<td>-0.2%</td>
<td>-9.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">
C-Non-durables</td>
<td>0.3%</td>
<td>0.2%</td>
<td>-0.2%</td>
<td>1.3%</td>
<td>-3.8%</td>
<td>-3.9%</td>
<td>-3.1%</td>
<td>-1.4%</td>
<td>-1.2%</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate</td>
<td>-1.3%</td>
<td>0.4%</td>
<td>0.7%</td>
<td>-1.0%</td>
<td>3.0%</td>
<td>-6.3%</td>
<td>-3.8%</td>
<td>-4.6%</td>
<td>-6.6%</td>
<td>-5.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital</td>
<td>0.8%</td>
<td>1.0%</td>
<td>0.7%</td>
<td>10.1%</td>
<td>16.3%</td>
<td>10.5%</td>
<td>9.1%</td>
<td>4.9%</td>
<td>-0.9%</td>
<td>10.3%</td>
</tr>
<tr>
<td class="firstcol">Memo: Detail</td>
<td>1Mo%</td>
<td>1Mo%</td>
<td>1Mo%</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q1 
Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Food
Drink&amp;tobacco</td>
<td>4.1%</td>
<td>-0.1%</td>
<td>-1.4%</td>
<td>10.5%</td>
<td>-7.7%</td>
<td>1.2%</td>
<td>-5.1%</td>
<td>2.0%</td>
<td>-0.5%</td>
<td>23.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Textile&amp;Leather</td>
<td>-5.5%</td>
<td>3.4%</td>
<td>-5.2%</td>
<td>-26.6%</td>
<td>-18.4%</td>
<td>-15.6%</td>
<td>-4.4%</td>
<td>-9.1%</td>
<td>-6.7%</td>
<td>-27.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Motor Vehicles
&amp; trailer</td>
<td>-2.0%</td>
<td>5.6%</td>
<td>2.2%</td>
<td>24.7%</td>
<td>30.3%</td>
<td>13.5%</td>
<td>37.0%</td>
<td>26.8%</td>
<td>8.3%</td>
<td>14.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Mining and Quarry</td>
<td>1.4%</td>
<td>-4.9%</td>
<td>5.1%</td>
<td>5.6%</td>
<td>4.0%</td>
<td>-10.1%</td>
<td>-13.4%</td>
<td>-8.8%</td>
<td>-12.0%</td>
<td>-1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Electricity,
gas&amp;H2O</td>
<td>1.3%</td>
<td>3.9%</td>
<td>-3.3%</td>
<td>7.3%</td>
<td>-4.7%</td>
<td>-0.6%</td>
<td>-4.7%</td>
<td>-5.2%</td>
<td>-6.7%</td>
<td>17.7%</td>
</tr>
</tbody>
</table>
U.S. Monthly Budget Deficit A
Record 
by <a href="/comment/Moeller.html">Tom
Moeller</a> March 10, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100310c.jpg" style="width: 353px; height: 265px;" align="right">As
the
Federal government's February budget deficit reached a record $220.9B,
the figure pulled the Fiscal YTD deficit to $651.6B which was larger
than any past deficit for twelve months, except 2009.
 Recession pulled
net revenues during the first five months of FY'10 down 7.0% y/y.
Individual income tax receipts fell 14.0% y/y through February
reflecting higher unemployment. The rate of decline, however, is half
that at the end of last year. Corporate tax receipts mirror the decline
in profitability and fell 14.1%, though that rate of decline also eased
sharply. Year-to-date, employment taxes fell a record 3.5% but
unemployment insurance tax receipts rose a surprising 3.8%. Estate
&amp; gift taxes fell by one-third after an 18.6% decline during
FY'09.
 Overall outlays were boosted 16.8% during the first five
months
of FY'10 as Social Security payments (21% of outlays) rose 7.8% and net
interest payments (5% of outlays) started to rise with higher rates.
Medicare expenditures (12% of outlays) fell slightly but other health
care services spending (10% of outlays) rose 21.3%. "Income security"
spending (11% of outlays) jumped by one-quarter while defense spending
(19% of total outlays) rose 2.9%.
The Government's financial data are
available in Haver's USECON database, with
extensive detail available in the specialized GOVFIN.·&nbsp;Fiscal
Policy Choices is the title of CBO Director Doug Elmendorf's
presentation to the National Association for Business Economics on
Monday and it can be found&nbsp;&nbsp; <a href="http://www.cbo.gov/ftpdocs/112xx/doc11277/CBOPresentation-NABE_3-8-10.pdf">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100310d.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100310e.jpg" style="width: 312px; height: 265px;">
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<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E106021.HTM">US
Government Finance</a> &nbsp;</th>
<th scope="col">February</th>
<th scope="col">FY 'YTD</th>
<th scope="col">FY 'YTD </th>
<th scope="col">FY 2009</th>
<th scope="col">FY 2008</th>
<th scope="col">FY 2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>$-220.9B</td>
<td>$-651.6B</td>
<td>&nbsp;$-651.6</td>
<td>$-1,417.1B</td>
<td>$-454.8B</td>
<td>$-161.5B</td>
</tr>
<tr>
<td class="firstcol">Net Revenues</td>
<td>$107.5B</td>
<td>$800.5B</td>
<td>-7.0%</td>
<td>-16.6%</td>
<td>-1.7%</td>
<td>6.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Outlays</td>
<td>$328.4B</td>
<td>$1,452.1B</td>
<td>16.8%</td>
<td>18.2%</td>
<td>9.1%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>

</body></html>

Manpower Survey Indicates PositiveBut Limited Jobs Growth

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309i.jpg" style="width: 353px; height: 265px;" align="right">The
Bureau
of Labor Statistics indicated improvement in January's job market
conditions. The latest Job Openings &amp; Labor Turnover Survey
(JOLTS) showed that the January job openings rate improved
to 2.1% which was the highest level since last February. The
job openings rate is the number of job openings on the last business
day of the month as a percent of total employment plus job openings. Job
availability doubled its December gain with a 7.6% increase and
remained off just 2.4% year-to-year. The latest figures reflect
benchmark revisions and the series dates back to December
2000.&nbsp;
The service sector led the improvement last month.
Educational &amp; health service jobs rose 13.2% (-0.5% y/y) and
leisure &amp; hospitality jobs increased 11.0% (7.2 y/y). Also, the
number of professional &amp; business service openings rose 6.9%
(-15.0% y/y. Deterioration in the factory sector reversed the December
gain with a 10.5% decline but openings were up by one-third from last
year. Construction
sector job openings also fell sharply for the third month in the last
four +81.8% y/y.
The hires rate has been stable
near 3.1% since the end of 2008.&nbsp;The hires rate is
the number of hires during the month divided by employment.&nbsp;The
actual number of hires reversed half of the December decline with a
2.1% m/m increase (-5.8% y/y). Professional &amp; business service
sector hires recouped most of the December decline with a 13.7%
increase (+2.1% y/y) while leisure &amp; hospitality hires gained
8.2% (-1.9% y/y). Factory sector hiring increased 3.3% (18.4% y/y) but
construction sector hiring fell 2.7% (-8.9% y/y).
The job
separations rate was stable at the series' low of 3.2% where
it's been since August with the actual number of separations off 19.5%
year-to-year. The layoff rate alone fell to a fifteen-month low of
1.5%. Separations include quits, layoffs, discharges, and
other separations as well as retirements. The layoff rate
alone ticked up to 1.6% but was down sharply from the January high of
1.9%.
The JOLTS survey dates only to December 2000 but has followed
the movement in nonfarm payrolls, though the actual correlation between
the two series is low
A description of the Jolts survey and the
latest release from the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/pdf/jolts.pdf">here</a>
and the figures are available in Haver's USECON
database.&nbsp;&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309j.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309k.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS
(Job Openings &amp; Labor
&nbsp;Turnover Survey)</a></th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Jan. '09</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td colspan="8">Job Openings, Total</td>
</tr>
<tr>
<td class="firstcol">Rate (%)</td>
<td>2.1</td>
<td>1.9</td>
<td>1.9</td>
<td>2.0</td>
<td>1.9</td>
<td>2.2</td>
<td>3.1</td>
</tr>
<tr>
<td class="firstcol"> Total (000s)</td>
<td>2,724</td>
<td>2,531</td>
<td>2,456</td>
<td>2,792</td>
<td>2,531</td>
<td>3,078</td>
<td>4,378</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Hires, Total</td>
</tr>
<tr>
<td class="firstcol">Rate (%)</td>
<td>3.1</td>
<td>3.1</td>
<td>3.2</td>
<td>3.2</td>
<td>37.3</td>
<td>41.1</td>
<td>45.9</td>
</tr>
<tr>
<td class="firstcol"> Total (000s)</td>
<td>4,080</td>
<td>3,997</td>
<td>4,160</td>
<td>4,330</td>
<td>48,649</td>
<td>56,082</td>
<td>63,234</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Layoffs &amp;
Discharges, Total</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>1.5</td>
<td>1.6</td>
<td>1.5</td>
<td>1.7</td>
<td>20.7</td>
<td>17.7</td>
<td>16.5</td>
</tr>
<tr>
<td class="firstcol">Total (000s)</td>
<td>1,890</td>
<td>2,049</td>
<td>1,973</td>
<td>2,641</td>
<td>27,683</td>
<td>24,589</td>
<td>22,606</td>
</tr>
</tbody>
</table>

</body></html>

The Bureau of Labor Statistics indicated improvement in January's job market conditions. The latest Job Openings & Labor Turnover Survey (JOLTS) showed that the January job openings rate improved to 2.1% which was the highest level [...]

JOLTS: U.S. Job Openings Highest Since February '09

Louise Curley

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309h.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
The National Australia Bank (not to be confused with the
Reserve Bank of Australia, the central bank) publishes monthly
indicators of business confidence and current conditions in business
together with the data on business opinions of trading conditions,
profitability, employment, forward orders, inventories, labor costs,
purchases cost, prices, capacity utilization and exports.
Business confidence rose to a percent balance of 19.4% in
February from 15.0% in January. It has recovered from the dip in
December and is now close to the peak levels of the past as can be seen
in the attached chart. The loss of confidence in December may have been
due, in part, to the three 25 basis points rises in the central bank's
policy rate that took place in October, November and December.
Apparently, the business community has come to realize that increases
in the cash rate are appropriate given the pace of Australian economic
activity. A fourth rise 25 basis points to 4.0% in the cash rate took
place on March 2 did not weaken confidence. The favorable balance of
opinion about current conditions is up to 7.7% from 3.0% in January but
it remains well below previous peaks.
The Australian economy is benefitting from the rise in
activity among the emerging countries of the pacific region. China is
now the single, largest recipient of Australia's exports. Ten years ago
in 1999, China accounted for 4.7% of Australia's exports; in 2009 it
accounted for 21.6% .

<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;</th>
<th scope="col">Feb 10</th>
<th scope="col">Jan 10&nbsp;</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 08</th>
<th scope="col">Oct 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul 09</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business
Confidence (% balance)</td>
<td>19.4</td>
<td>15.0</td>
<td>7.9</td>
<td>19.2</td>
<td>15.8</td>
<td>13.7</td>
<td>18.1</td>
<td>9.7</td>
</tr>
<tr>
<td class="firstcol">Business
Conditions&nbsp; (% balance)</td>
<td>7.7</td>
<td>3.0</td>
<td>10.1</td>
<td>10.3</td>
<td>11.8</td>
<td>3.2</td>
<td>3.8</td>
<td>1.0</td>
</tr>
</tbody>
</table>
</body></html>

The National Australia Bank (not to be confused with the Reserve Bank of Australia, the central bank) publishes monthly indicators of business confidence and current conditions in business together with the data on business opinions [...]

Business Confidence In Australia Rises

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
French exports and imports show a classic impact on those two
flows
as the domestic and global recessions hit. Now that recovery is in
gear, the trade flows reflect that as well. Exports and imports plunged
at the onset of the recession, imports fell because French domestic
demand shriveled up; exports contracted because foreign demand shut
down. The impact on the balance of trade was erratic. Generally,
however, the size of the French goods trade deficit was reduced. But
late in 2009 the trade deficit began to surge again reaching a monthly
maximum (deficit) of over &#8364;6bln. But over the last two months this
bulge in the deficit has diminished.
Exports have outpaced imports Yr/Yr, nearly doubling the
growth rate
of imports. Over six months exports contracted as imports began to
surge. But over the last three months exports are back solidly
outperforming imports, helping to shrink the French deficit.
The Yr/Yr trends in the chart tell a broad-brush story of
surging
trends. Both exports and imports are on a clear and solid upswing over
that period. Over shorter periods export and import growth both are
more chaotic. But the year-over-year statics tell a clear story of an
international sector in rebound. Trade figures across the globe echo
these same trends. Trade flows tell a story of an international economy
in a clear state of rebound not a story of tentative and sputtering
domestic growth which is the story we are often fed about the various
national expansions. Why do the trade data speak clearly to the subject
of revival while various national data do not? It is because the goods
sector which dominates trade is in a clear rebound while the services
sector, the sector that dominates job growth domestically, has been
slow to catch on. To make the various national recoveries durable,
services industries have to catch on and job growth must get into gear.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="6" scope="col"> French
Trade trends for goods, Excl Miliarty Equip</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">m/m%</td>
<td colspan="3">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>3M</td>
<td>6M</td>
<td>12M</td>
</tr>
<tr class="grey2">
<td class="firstcol">Balance*</td>
<td>-&#8364; 4,863.00</td>
<td>-&#8364; 5,346.00</td>
<td>-&#8364; 5,472.67</td>
<td>-&#8364; 4,983.00</td>
<td>-&#8364; 4,756.25</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">Exports</td>
</tr>
<tr>
<td class="firstcol">All Exp</td>
<td>2.7%</td>
<td>0.4%</td>
<td style="font-weight: bold;">19.5%</td>
<td style="color: red; font-weight: bold;">-3.4%</td>
<td>7.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Food,
Bev &amp;Tobacco</td>
<td>-2.6%</td>
<td>0.8%</td>
<td style="font-weight: bold;">14.5%</td>
<td style="color: red; font-weight: bold;">-4.4%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Transport Equip</td>
<td>8.4%</td>
<td>6.2%</td>
<td style="font-weight: bold;">16.2%</td>
<td style="color: red; font-weight: bold;">-8.7%</td>
<td>26.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Other
Exp</td>
<td>1.7%</td>
<td>-1.2%</td>
<td style="font-weight: bold;">21.3%</td>
<td style="color: red; font-weight: bold;">-1.4%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">IMPORTS</td>
</tr>
<tr>
<td class="firstcol">All IMP</td>
<td>0.9%</td>
<td>-2.1%</td>
<td style="font-weight: bold;">13.9%</td>
<td style="font-weight: bold;">11.1%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Food,
Bev &amp;Tobacco</td>
<td>0.5%</td>
<td>-0.2%</td>
<td style="font-weight: bold;">7.8%</td>
<td style="color: red; font-weight: bold;">-4.7%</td>
<td style="font-weight: bold;">-2.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Transport Equip</td>
<td>0.1%</td>
<td>-0.9%</td>
<td>12.0%</td>
<td style="font-weight: bold;">13.1%</td>
<td>11.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Other
Imp</td>
<td>1.1%</td>
<td>-2.5%</td>
<td>14.8%</td>
<td style="font-weight: bold;">12.3%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">All data
seasonally
adjusted *Eur mlns; mo or period average</td>
</tr>
</tbody>
</table>
</body></html>

French exports and imports show a classic impact on those two flows as the domestic and global recessions hit. Now that recovery is in gear, the trade flows reflect that as well. Exports and imports plunged at the onset of the [...]

French Deficit Shrinks

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309d.jpg" style="width: 353px; height: 265px;" align="right">Gasoline
prices continued their rally. At $2.75 per gallon last week, the pump
price for regular gasoline was at the highest level since
January which was the highest level since September 2008. Yesterday,
the spot market price for a gallon of regular gasoline increased to
$2.18, also its highest since 2008. The figures are reported by the
U.S. Department of Energy and can be found in Haver's WEEKLY
&amp; DAILY databases.
The price for a barrel of light
sweet crude (WTI) rose last week to $80.19 though it remained down from
the early-January high of $82.59. Nevertheless, prices have risen from
$71.53 early this past December and are more than double the December
2008 low of $32.37. Yesterday, the spot price rose further to $81.87.·
Demand for gasoline fell 2.5% last week versus one year ago. That
decline compared to a 3.9% increase at the beginning of October. The
demand for residual fuel oil spiked by one-third with falling
temperatures in the Northeast &amp; Midwest. However, distillate
demand fell 7.7% y/y, a decline more moderate than the 21.6% y/y
shortfall at the beginning of last July. Inventories of crude oil and
petroleum products slipped in February but were up 1.0% from one year
ago.
U.S. natural gas prices fell last week to an average $4.75 per
mmbtu (+11.8% y/y) from the high of $6.50 early in January.
Nevertheless, prices remained double the September low.
 Outside of
energy, commodity prices also have been strong. Copper has led the gain
as prices have more-than doubled since early last year. Scrap steel
prices remain strong with a doubling during the same period. Aluminum
prices have leveled off since December but remain up by two-thirds
since the 2009 low. With improved housing activity has come strength in
lumber prices which have risen more than 50% since early-2009. Cotton
prices also have nearly doubled with improvement in consumer spending.
In the agricultural area, prices of foodstuffs including wheat, corn
&amp; butter, as well as livestock have risen by one-half. Finally,
gold prices near $1,126.50/pound have risen 50% since the fall of '08
and have roughly tripled since 2001.
The energy &amp; commodity
price data can be found in Haver's WEEKLY database
while the daily figures are in DAILY. The gasoline
demand figures are in OILWKLY.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309e.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">03/01/10</th>
<th scope="col">03/01/10</th>
<th scope="col">02/22/10</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.75</td>
<td>2.70</td>
<td>2.66</td>
<td>41.7%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>80.19</td>
<td>79.26</td>
<td>78.30</td>
<td>85.4%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
</tbody>
</table>

</body></html>

Gasoline prices continued their rally. At $2.75 per gallon last week, the pump price for regular gasoline was at the highest level since January which was the highest level since September 2008. Yesterday, the spot market price for a [...]

U.S. Gasoline Prices Are Highest Since 2008

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309a.jpg" style="width: 353px; height: 265px;" align="right">The
recession has been over for nearly nine months and that has done little
to improve small business' mood. The National Federation of Independent
Business (NFIB) reported their February small business optimism index
retraced the January gain and slipped to 88.0. Since the first quarter
of last year the index has been hovering near that level. During the
last ten years there has been an 85% correlation between the level of
the NFIB index and the two-quarter change in real GDP.Reduced
expectations for overall economic improvement pulled this measure back
to its lowest level since March of last year as a majority of firms saw
further economic deterioration. Expectations for sales in six months
were neutral and the percentage thinking that now was a good time to
expand the business fell to four percent, its lowest since March '09.
Expectations for an easing of credit market conditions were skewed to
further tightening and that reading is little changed since the Fall of
2008. Offsetting a piece of this deterioration was that fewer firms
were&nbsp; planning to reduce inventory levels; in fact, it was the
fewest in over a year.&nbsp; Hiring plans remain restrained. The percentage
of firms with one or more job openings improved slightly to its highest
level since last spring but the percentage planning to increase hiring
further has been moving sideways. During the last ten years there has
been a 74% correlation between the NFIB employment percentage and the
six-month change in nonfarm payrolls.On the pricing front, weakness
continued. The percentage of firms actually raising
prices slipped to -21% (indicating deflation) and remained near the
record low. During the last ten years there has been a 51% correlation
between the six-month change in the producer price index and the level
of the NFIB price index.&nbsp;However, the percentage of firms planning
to raise prices improved to its highest level since late-2008. Finally,
the percentage planning to raise worker compensation improved to its
highest since late-2008.The most important problems seen by business
were poor sales (34%), taxes (23%, close to its highest level since
2007), government requirements (12%), insurance cost &amp;
availability (7%), competition from large businesses (6%) and inflation
(3%).About 24 million small businesses exist in the United
States. Small business creates 80% of all new jobs in America and the
NFIB figures can be found in Haver's SURVEYS
database.
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100309c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S7/@S7.HTM">Nat'l
Federation of Independent Business</a></th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">Feb.'09</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Small Business Optimism Index
(SA, 1986=100)</td>
<td>88.0</td>
<td>89.3</td>
<td>88.0</td>
<td>82.6</td>
<td>86.7</td>
<td>89.8</td>
<td>96.7</td>
</tr>
<tr>
<td class="firstcol">Percent of Firms Expecting
Economy To Improve</td>
<td>-9</td>
<td>1</td>
<td>2</td>
<td>-21</td>
<td>-0</td>
<td>-10</td>
<td>-4</td>
</tr>
<tr class="odd">
<td class="firstcol">Percent of Firms With One or
More Job Openings</td>
<td>11</td>
<td>10</td>
<td>10</td>
<td>11</td>
<td>9</td>
<td>18</td>
<td>24</td>
</tr>
<tr>
<td class="firstcol">Percent of Firms Reporting That
Credit Was Harder To Get</td>
<td>12</td>
<td>14</td>
<td>15</td>
<td>13</td>
<td>14</td>
<td>9</td>
<td>6</td>
</tr>
<tr class="odd">
<td class="firstcol">Percent of Firms Raising Avg.
Selling Pric1es (Net)</td>
<td>-21</td>
<td>-18</td>
<td>-22</td>
<td>-24</td>
<td>-20</td>
<td>17</td>
<td>15</td>
</tr>
</tbody>
</table>


</body></html>

The recession has been over for nearly nine months and that has done little to improve small business' mood. The National Federation of Independent Business (NFIB) reported their February small business optimism index retraced the [...]

U.S. Small Business Optimism Slips

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

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

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

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

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

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Andrew Cates

**The US labour market**
The latest data highlight a growing sense of fragility in the US labour market. The unemployment rate, while still relatively low by historical standards, has been edging higher through the course of this year. More telling, however, is the signal from this week’s consumer confidence survey from Conference Board and specifically the labour market differential — the gap between the share of consumers saying jobs are plentiful versus those saying jobs are hard to get. That balance has narrowed sharply, moving back toward levels historically associated with softer labour demand and rising unemployment.

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**Goods and services inflation** 
Haver’s breakdown of goods and services CPI inflation in the advanced economies highlights where fresh risks are emerging. Goods inflation, which had been receding sharply after the pandemic supply shocks, has recently shown signs of firming again. Some of this probably reflects the impact of US tariff policies, which are raising import costs and putting renewed upward pressure on traded goods prices. While services inflation remains the more stubborn component in most advanced economies, the risk is that tariffs could reintroduce stickiness into goods prices, slowing the overall disinflation process.

250828Z2.jpg

**China, Europe and US trade policy**
A consequence of US tariff policies has been a sharp contraction in Chinese exports to the US market, with much of the surplus redirected elsewhere. Europe in particular has recorded near double-digit import growth in recent months, raising concerns that Beijing is deflecting its industrial overcapacity problem rather than resolving it, effectively transferring the pressure onto trading partners. China’s authorities, however, have begun to push back, introducing measures to curb excess supply and rein in so-called “involution,” including clampdowns on price wars across several industries.

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**China’s excess capacity and Europe**
A closer look at Europe–China trade shows that electric vehicles remain a key flashpoint. Import volumes from China have continued to rise even as per-unit prices fall sharply from a year ago —evidence suggesting that industrial overcapacity persists, with low-cost Chinese EVs increasingly challenging European automakers. The surge has carried on despite EU tariffs of up to 45% on battery EVs, as Chinese producers have adapted by pushing plug-in hybrids and expanding onshore production in Europe to bypass duties and defend market share.

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**Wage growth in the US and Europe** 
Turning back to inflation dynamics, the UK stands out for its persistent wage pressures. While posted wage growth has cooled across the US and euro area, the UK measure has remained elevated at around 6% year-on-year, well above pre-pandemic norms. This stickiness reflects a still-tight labour market in key service sectors, even as broader activity has slowed and unemployment has edged higher. For the Bank of England, it underscores the dilemma: headline inflation is easing, but underlying pay growth risks keeping services inflation uncomfortably high, complicating the timing and scale of policy easing.

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**The UK economy**
The UK’s net international investment position has deteriorated noticeably in recent years, with both direct investment and portfolio flows showing persistent weakness. The latest data underline how net FDI has turned increasingly negative, while the portfolio investment balance has also eroded, leaving the UK more reliant on volatile short-term funding sources. This deterioration comes against a backdrop of heightened investor unease about the riskiness of UK debt markets, where elevated gilt yields and rising debt-servicing costs have amplified concerns over fiscal sustainability. Taken together, these trends underscore the vulnerability of the UK’s external position at a time when global capital is arguably proving more selective and risk sensitive.

250828Z6.jpg

Global markets have continued to rally into late summer, buoyed by AI optimism, dovish signals from central bankers at Jackson Hole, and expectations of easier policy ahead. Yet beneath the surface, risks to the world economy are accumulating. In the US, labour market indicators point to softening conditions (chart 1), while tariff-driven pressures are beginning to push goods prices higher (chart 2). Global trade flows are being reshaped by US policy, with China’s excess capacity increasingly diverted toward Europe, most visibly through surging exports of electric vehicles (EVs) (charts 3 and 4). At the same time, wage growth remains stubbornly elevated in the UK, complicating disinflation (chart 5), while concerns are mounting over the country’s external vulnerabilities as net FDI and portfolio positions weaken against the backdrop of jittery debt markets (chart 6). Together, these dynamics highlight the tension between buoyant market performance and a global economy still grappling with structural fragilities.

Charts of the Week: Riskbusters

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Real GDP grew 3.3% (SAAR) during the second quarter of 2025, revised from a 3.0% gain reported initially. The increase followed an unrevised 0.5% decline in Q1. A 3.1% rise had been expected in the Action Economics Forecast Survey. Growth during the last four quarters of 2.1% compared to 2.0% y/y in Q1, and remained below its most recent high of 3.2% in Q4 2023.

After-tax corporate profits without IVA & CCA adjustment increased 1.4% (7.0% y/y) last quarter after easing 0.8% in Q1. Before-tax earnings with IVA & CCA rose 1.7% (4.3% y/y) after falling 2.3% in Q1. Financial sector earnings rose 1.4% (15.3% y/y) after rising 2.3% in Q1. Nonfinancial corporate profits rose 2.2% (2.5% y/y) after falling 2.5% in Q1. Earnings from abroad eased 0.7% (-0.4% y/y) following a 7.3% Q1 decline.

Foreign trade balance improvement added 4.95 percentage points to growth last quarter after subtracting 4.61 percentage points in Q1. Imports fell 29.8% (+1.3% y/y) after surging 38.0% in Q1. Exports declined 1.3% (+2.0% y/y) after improving 0.4% in Q1. Inventories subtracted 3.29 percentage points from growth after adding 2.59 percentage point to Q1 growth.

Real final sales to domestic purchasers grew 1.6% (2.4% y/y), revised from 1.1%, in Q2 after rising 1.5% in Q1. Personal consumption expenditures rose 1.6% (2.4% y/y), revised from 1.4%, following a 0.5% gain. Durable goods spending rose 2.6% (4.6% y/y) after falling 3.7% in Q1. Motor vehicle purchases strengthened 11.7% (6.7% y/y) after declining 11.2% in Q1. Spending on home furnishings & appliances weakened 2.1% (+3.5% y/y) following a 1.5% rise. Recreational goods & vehicle outlays fell 3.5% (+4.3% y/y) last quarter after a 0.4% Q1 gain.

Nondurable goods outlays in constant dollars rose 2.3% (3.0% y/y) following 2.1% growth in Q1. Apparel spending increased 5.4% (4.8% y/y) following a 7.0% rise. Food & beverage buying gained 0.3% (1.5% y/y) after a 1.0% increase. Gasoline & fuel oil purchases weakened 1.4% (+0.9% y/y) after gaining 3.6% in Q1.

Real spending on services increased 1.2% (1.9% y/y) after a 0.6% gain. Outlays on housing & utilities eased 0.4% (+1.1% y/y) after rising 2.9% in Q1. Health care expenditures rose 4.2% (4.8% y/y) after a 3.1% increase. Transportation outlays declined 2.9% (-0.6% y/y) after a 1.4% rise, while recreation spending rose 3.6% (0.7% y/y) following a 5.1% decline. Restaurant & hotel expenditures increased 5.1% (1.9% y/y) after falling 1.8%. Financial services expenditures rose 1.9% (2.3% y/y) following a 0.1% Q1 increase.

Business fixed investment in constant dollars increased 5.7% last quarter (4.2% y/y), revised from 1.9%, following a 10.3% surge in Q1. Expenditures on structures declined 8.9% (-3.4% y/y), after falling 2.4% in Q1. Expenditures on producers’ durable equipment increased 7.4% (7.7% y/y), revised from 4.8%, after surging 23.7% in Q1. Outlays on information processing equipment rose 10.1% (20.1% y/y), revised from 5.5%, after soaring 72.8% during Q1. Industrial equipment investment rose 6.7% (4.0% y/y) after a 4.7% rise. Transportation equipment investment surged 20.4% (6.8% y/y) after a 6.9% gain. Intellectual property product spending rose 12.8% last quarter (5.2% y/y) following a 6.0% rise.

Residential structures investment in real terms declined a little-revised 4.7% (-1.3% y/y), the fourth decline in the last five quarters.

250828O8.jpg

250828P8.jpg

Government spending eased 0.2%, revised from up 0.5% in Q2 (+1.8% y/y) after a 0.6% decline. Federal government expenditures declined 4.7% (+0.7% y/y) after falling 4.6% in Q1. National defense expenditures increased 1.4% (3.0% y/y) after declining 7.1% in Q1. State & local government spending rose 2.6% (2.5% y/y) following a 2.0% rise.

The GDP chain price index rose an unrevised and expected 2.0% last quarter (2.5% y/y) after increasing 3.8% in Q1. The PCE chain price index increased 2.0% (2.4% y/y) following a 3.7% rise. The PCE price index excluding food and energy rose 2.5% (2.7% y/y) after increasing 3.5% in Q1. The business fixed investment price index edged 0.5% lower (+1.1% y/y) after a 0.4% rise. The residential price index rose 1.1% (2.6% y/y) after a 4.1% rise while the government price index increased 3.3% (3.1% y/y) following a 4.6% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

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250828S8.jpg

- Business investment strengthens & consumer spending firms.
- U.S. business earnings reverse Q1 decline.
- Increase in price index is unrevised, remaining roughly half of Q1’s gain.

U.S. GDP Q2’25 Growth Revised Up; Profits Improve

Sandy Batten

250828J2.jpg

250828K2.jpg

The Kansas City Fed manufacturing composite index was unchanged at 1 in August from July. This was the second consecutive month that the index has been positive, indicating the manufacturing in the KC Fed district continue to inch up in August. Prior to the positive reading in July, the index had been negative for 22 consecutive months. The index’s most recent high was 31 reached in both April 2021 and October 2021. The durable manufacturing sector was mostly flat in August, while nondurable manufacturing activity declined slightly driven by printing activities and paper and chemical manufacturing. 

The August survey was open for a six-day period from August 20-25, 2025 and included 103 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.

The ISM-adjusted index calculated by Haver Analytics rose to 51.1 (NSA) in August from 50.2 in July. This was the fifth reading above the critical 50 level that separates expansion from contraction in the past six months, a further indication of expanding manufacturing activity.

For the major component indexes, the production index was 0 in August, but this was up from -3 in July. The new orders index rose to 5 in August, its highest reading since May 2022, from 2 in July. The shipments index increased to 6 in August from 3 in July. The employment index was 0 in August, but this was up from -11 in July. Also, the average workweek index rebounded to 3 in August after having been in negative territory for the previous four months. Supplier delivery times were unchanged at 7 in August. The elevation of this index since April may indicate some incipient supply-chain disruptions from higher tariffs. In contrast, raw materials inventories fell to -7 in August from 8 in July.

On the inflation front, the prices paid for raw materials index remained elevated but fell to 43 in August from 47 in July and a local high of 51 in June. Forty-four percent of respondents reported an increase in raw materials prices in August, down from 48% in July and 53% in June, while only 4% reported a decrease, down from 5% in July and 6% in June. The prices received for finished products index increased to 21 in August from 18 in July. This index has fluctuated in a range between 17 and 21 for the past four months.

Expectations for future activity remained positive, with the composite index rising to 11 from 8, as firms anticipate an improvement in production and new orders. While expectations have been trending up over the past several months, they remain depressed relative to the recent high reading of 17 last December. Capital expenditures expectations remained in negative territory in August for the second consecutive month but edged up to -3 from -4 in July.

The series dates back to July 2001. The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Data for the Kansas City Fed Survey can be found in Haver’s **SURVEYS** database.

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- Index remained (though barely) in positive territory for the second consecutive month, indicating that manufacturing activity was inching up.
- Prior to last month, the index had been negative for 22 consecutive months.
- Positive readings across most key components.

FRB Kansas City Manufacturing Index Unchanged in August

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The Pending Home Sales Index weakened 0.4% in July (+0.7% y/y) to 71.7 after falling an unrevised 0.8% in June and rising an unrevised 1.8% in May, according to the National Association of Realtors (NAR). The Index remained 42.7% below its most recent peak of 125.1 in October 2021. The index is a forward-looking measure of home sales based on contract signings.

The fall in pending home sales occurred as the average rate on a 30-year mortgage rose to 6.72% in July after holding steady m/m at 6.82% in June. These rates remained well above a low of 5.22% in August 2022 and more than double a record-low 2.68% in December 2020.

Pending home sales were mixed last month in the four major regions of the country. Sales in the Midwest declined 4.0% (+1.3% y/y) in July after easing 0.8% in June. Sales in the Northeast fell 0.6% both m/m and y/y, after holding steady in June. In the South, sales eased 0.1% (+1.8% y/y) following a 0.6% June decline, but sales in the West increased 3.7% (-1.9% y/y), reversing a 3.9% June drop.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Decline adds to June weakness.
- Regional changes are mixed.


U.S. Pending Home Sales Decline in July

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance declined to 229,000 during the week of August 23, after rising to 234,000 in the week of August 16, revised from 235,000. The Action Economics Forecast Survey expected 230,000 initial claims for last week. The four-week moving average of initial claims increased to 228,500 from 226,000, revised from 226,250. It was the highest level since the second week of July.

In the week ended August 16, the total number of unemployment insurance beneficiaries – also known as “continuing claims” – decreased by 7,000 to 1.954 million from 1.961 million in the prior week, revised down by 11,000 from 1.972 million. The four-week moving average rose to 1.956 million in the week ending August 16, the highest level in six weeks, and up from 1.952 million in the prior week, revised from 1.955 million.

In the week ending August 16, the insured rate of unemployment (the number of beneficiaries as a percent of covered employment) was 1.3% for the twelfth consecutive week.

The insured unemployment rate varied greatly across individual states and territories. In the week ended August 9, the highest unemployment rates were in New Jersey (2.75%), Rhode Island (2.58%), Massachusetts (2.18%), Minnesota (2.17%), California (2.11%), Washington (2.08%), District of Columbia (2.04%), and Puerto Rico (2.02%). The lowest were in South Dakota (0.28%), Florida (0.42%), and Alabama and North Carolina (both 0.47%). Rates in other notable states include Pennsylvania (1.92%), New York (1.73%), Illinois (1.72%), and Texas (1.24%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

250828C5.jpg

250828D5.jpg

- Initial claims declined in latest week after a surge in the prior week.
- Continuing claims declined.
- Insured unemployment rate holds steady.

Economy in Brief: March 2010

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U.S. Small Business Optimism Slips

U.S. Small Business Optimism Slips