Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512e.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512d.jpg" border="0" height="265" width="312">
Four Eastern European countries--the Czech Republic, Romania,
Latvia and Lithuania--reported inflation rates for April today.
Inflation rates are shown in the first chart. In April inflation ranged
from a low of 6.8% for the Czech Republic to a high of 17.4% in Latvia.
Lithuania, the other Baltic state reporting today, also reported a high
rate of inflation, 11.7%, while inflation in Romania came in at 8.6%.
Inflation in these countries began to take off in early 2007, as in so
many other countries, with the rises in the prices of food and oil.
Latvia and Lithuania have kept their policy interest rate
unchanged while the Czech Republic and Romania have increased them.
However, all four countries have negative interest rates as shown in
the second and third charts.
Only the Czech Republic has experienced an appreciation of its
currency relative to the Euro that has been a major factor in keeping
its inflation relatively subdued. Latvia and Lithuania have tied their
currencies to the Euro and Romania has recently seen its currency
depreciate. The Euro exchange rates of the four countries are shown in
the fourth chart.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512f.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512c.jpg" border="0" height="265" width="312"> 


<table border="0" cellspacing="0" width="100%">
</table>
<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;INFLATION&nbsp;(%)</th>
<th scope="col">Apr 08</th>
<th scope="col">Mar&nbsp; 08&nbsp;</th>
<th scope="col">Feb 08</th>
<th scope="col">Jan 08&nbsp;</th>
<th scope="col">Apr 07&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Czech Republic</td>
<td>6.8</td>
<td>7.1</td>
<td>7.5</td>
<td>7.5</td>
<td>2.5</td>
<td>2.8</td>
<td>2.5</td>
<td>1.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Romania</td>
<td>8.6</td>
<td>8.6</td>
<td>8.0</td>
<td>7.3</td>
<td>3.8</td>
<td>4.8</td>
<td>6.6</td>
<td>9.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Latvia</td>
<td>17.5</td>
<td>16.8</td>
<td>16.7</td>
<td>15.8</td>
<td>8.9</td>
<td>10.1</td>
<td>6.5</td>
<td>6.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Lithuania</td>
<td>11.7</td>
<td>11.3</td>
<td>10.8</td>
<td>9.9</td>
<td>4.8</td>
<td>5.7</td>
<td>3.7</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;POLICY
INTEREST RATE</td>
<td>May&nbsp; 08&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Czech Republic</td>
<td>3.75</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Romania</td>
<td>9.75</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Latvia</td>
<td>6.0</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Lithuania</td>
<td>5.0</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
</body></html>

Four Eastern European countries--the Czech Republic, Romania, Latvia and Lithuania--reported inflation rates for April today. Inflation rates are shown in the first chart. In April inflation ranged from a low of 6.8% for the Czech [...]

Inflation in Eastern Europe

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512b.jpg" align="left" border="0" height="265" width="353">
The quarter to date (which is now the completed 2008-Q1
period) shows still strong results for Italian output. But the monthly
numbers reveal a different trend. The quarter&#8217;s lift stems totally from
the spurt in output in January. Since then output trends are on the
decline in all sectors with the exception of transportation. Consumer
goods output spurted by 3.6% in January, then fell by 2.6% in February
and fell further, by 0.7% in March. Capital goods output has declined
in March. Intermediate goods output is off for the last two months in a
row &#8211; just about negating the rise in January.

The graph shows that output trends in France and Germany are
topping while Italy is seeing the sharpest deceleration among the EMU
big-three economies.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Italy IP
Excluding Construction </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">SAAR except m/m</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-date</td>
</tr>
<tr>
<td class="firstcol">IP-MFG</td>
<td>0.0%</td>
<td>-0.2%</td>
<td>1.9%</td>
<td>7.0%</td>
<td>-1.4%</td>
<td>-1.9%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-0.7%</td>
<td>-2.6%</td>
<td>3.6%</td>
<td>0.9%</td>
<td>-2.1%</td>
<td>-4.3%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>6.3%</td>
<td>27.9%</td>
<td>-0.8%</td>
<td>-1.2%</td>
<td>16.1%</td>
</tr>
<tr>
<td class="firstcol">Intermediary Goods</td>
<td>-0.5%</td>
<td>-0.7%</td>
<td>1.3%</td>
<td>0.0%</td>
<td>-4.1%</td>
<td>-3.1%</td>
<td>1.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Transportation</td>
<td>2.7%</td>
<td>1.7%</td>
<td>3.0%</td>
<td>33.8%</td>
<td>0.7%</td>
<td>5.7%</td>
<td>6.2%</td>
</tr>
</tbody>
</table>
</body></html>

The quarter to date (which is now the completed 2008-Q1 period) shows still strong results for Italian output. But the monthly numbers reveal a different trend. The quarter’s lift stems totally from the spurt in output in January. [...]

Italy’s Manufacturing Output Slips and EMU Tops Out

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512a.jpg" align="left" border="0" height="265" width="353">
After several months of firming on its various gauges the
economy watchers index has dropped again in April. The drop takes the
overall index to the bottom several percentile of its five year range
and levels employment is the bottom 2.8 percentile of its range. The
future index, also lower in the month, resides in the bottom 17
percentile of its range. Similarly in April we have seen the NTC MFG
index weaken and the Teikoku indices weaken. The perception that the
economy is losing steam in the economy watchers survey seems to on
target. Unfortunately the future index is still falling sharply.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Key
Japanese surveys </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="4">Raw readings of each survey</td>
<td colspan="3">Percent of 5-Yr range*</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Diffusion</td>
</tr>
<tr>
<td class="firstcol">Economy Watchers</td>
<td>35.5</td>
<td>36.9</td>
<td>33.6</td>
<td>31.8</td>
<td>14.5%</td>
<td>20.0%</td>
<td>7.1%</td>
</tr>
<tr>
<td class="firstcol">Employment</td>
<td>33.6</td>
<td>35.5</td>
<td>35.0</td>
<td>34.1</td>
<td>0.0%</td>
<td>4.4%</td>
<td>2.8%</td>
</tr>
<tr>
<td class="firstcol">Future</td>
<td>36.1</td>
<td>38.2</td>
<td>39.5</td>
<td>35.8</td>
<td>1.4%</td>
<td>11.5%</td>
<td>17.8%</td>
</tr>
<tr>
<td class="firstcol">NTC MFG</td>
<td>48.6</td>
<td>49.5</td>
<td>50.8</td>
<td>52.4</td>
<td>0.0%</td>
<td>6.0%</td>
<td>30.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">Econ
Trends
(Teikoku'/50 neutral/weighted diffusion)</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>36.9</td>
<td>37.8</td>
<td>38.5</td>
<td>37.9</td>
<td>0.0%</td>
<td>0.0%</td>
<td>4.4%</td>
</tr>
<tr>
<td class="firstcol">Retail</td>
<td>32.1</td>
<td>33.2</td>
<td>32.6</td>
<td>31.3</td>
<td>5.9%</td>
<td>13.6%</td>
<td>9.4%</td>
</tr>
<tr>
<td class="firstcol">Wholesale</td>
<td>34.5</td>
<td>34.9</td>
<td>35.3</td>
<td>34.5</td>
<td>0.3%</td>
<td>3.6%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>40.4</td>
<td>40.5</td>
<td>41.0</td>
<td>40.4</td>
<td>0.0%</td>
<td>1.1%</td>
<td>5.4%</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>28.0</td>
<td>29.3</td>
<td>29.7</td>
<td>28.9</td>
<td>0.0%</td>
<td>4.3%</td>
<td>7.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">100 is high;
Zero is low</td>
</tr>
</tbody>
</table>
</body></html>

After several months of firming on its various gauges the economy watchers index has dropped again in April. The drop takes the overall index to the bottom several percentile of its five year range and levels employment is the bottom [...]

Japan's Economy Watcher's Index Turns Lower Again

Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512g.jpg" align="left" border="0" height="265" width="353">
As it usually does in April, the U.S. government ran a budget
surplus of $159.3B. The figure was down slightly, however, from last
year's unusually large April surplus of $177.7B. Based on expectations
formed by Public Debt Transactions from the Daily Treasury Statement,
the budget surplus equaled the Consensus forecast. These Transactions
data are available in Haver's DAILY database.
For the first seven months of FY08 the government ran a budget
deficit of $152.2B; nearly double the deficit of $80.8B during the
first seven months of FY07.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512h.jpg" align="right" border="0" height="265" width="353">
For the fiscal year to date, federal receipts grew a paltry
3.0% from a year earlier. That compared to 11.2% y/y growth during the
first seven months of FY07. Higher unemployment constrained the growth
in individual income tax receipts (44% of total receipts) to 6.0% this
year. Seventeen percent y/y growth had been logged during the first
seven months of FY07. Growth in withheld income taxes of 5.6% was
roughly half that of a year earlier and non-withheld taxes grew 7.3%,
or roughly one quarter as during the first seven months of FY07.
Lower corporate profitability continued to crimp government
revenues. Corporate income taxes (13% of total receipts) amounted to
$207.0B, a 6.0% decline from receipts during the first seven months of
FY07. During FY07 they rose 13.4% during the first seven months.
Unemployment insurance contributions fell 2.7% FYTD due to
negative employment growth and Federal excise taxes fell 1.1%.
U.S. net outlays grew 7.4% during the first seven months of
FY08, more than double the outlay growth of FY07's first seven months.
Growth in defense spending (19% of total outlays) also nearly doubled
to a 10.6% growth rate but Medicare expenditures (12% of outlays) grew
a much slower 2.1%. Growth in Social Security spending (21% of outlays)
held about steady at 5.4% and interest expense grew 8.6%, held back by
the recent decline in interest rates. Growth in outlays for income
security (15% of outlays) held steady at 15.1% and health spending (10%
of the total) grew 5.7%.
The Government's financial data is available in Haver's USECON
database.
How Do EITC Recipients Spend Their Refunds? from
the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/publications/economicperspectives/ep_2qtr2008_part2_goodman_etal.pdf">
here</a>.
Financial Market Tremors: Causes and Responses
is from Dallas Federal Reserve Bank President Richard W. Fisher and it
is available <a href="http://dallasfed.org/research/eclett/2008/el0804.pdf">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E1/@E106/@E10602/@E106021.HTM">US
Government Finance</a> &nbsp;</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y</th>
<th scope="col">FY 2007</th>
<th scope="col">FY 2006</th>
<th scope="col">FY 2005 &nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Budget Balance</td>
<td>-$48.1B</td>
<td>-$175.6B</td>
<td>-$96.3B (3/07)</td>
<td>-$162.0B</td>
<td>-$248.2B</td>
<td>-$318.7B</td>
</tr>
<tr>
<td class="firstcol">Net Revenues</td>
<td>$178.9</td>
<td>$105.7B</td>
<td>7.4%</td>
<td>6.7%</td>
<td>11.8%</td>
<td>14.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Net Outlays</td>
<td>$227.0</td>
<td>$281.3B</td>
<td>-13.4%</td>
<td>2.8%</td>
<td>7.4%</td>
<td>7.6%</td>
</tr>
</tbody>
</table>
Japan's Economy Watcher's
IndexTurns Lower Again 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 12, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512a.jpg" align="left" border="0" height="265" width="353">
After several months of firming on its various gauges the
economy watchers index has dropped again in April. The drop takes the
overall index to the bottom several percentile of its five year range
and levels employment is the bottom 2.8 percentile of its range. The
future index, also lower in the month, resides in the bottom 17
percentile of its range. Similarly in April we have seen the NTC MFG
index weaken and the Teikoku indices weaken. The perception that the
economy is losing steam in the economy watchers survey seems to on
target. Unfortunately the future index is still falling sharply.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Key
Japanese surveys </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="4">Raw readings of each survey</td>
<td colspan="3">Percent of 5-Yr range*</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>Apr-08</td>
<td>Mar-08</td>
<td>Feb-08</td>
</tr>
<tr>
<td class="firstcol" colspan="8">Diffusion</td>
</tr>
<tr>
<td class="firstcol">Economy Watchers</td>
<td>35.5</td>
<td>36.9</td>
<td>33.6</td>
<td>31.8</td>
<td>14.5%</td>
<td>20.0%</td>
<td>7.1%</td>
</tr>
<tr>
<td class="firstcol">Employment</td>
<td>33.6</td>
<td>35.5</td>
<td>35.0</td>
<td>34.1</td>
<td>0.0%</td>
<td>4.4%</td>
<td>2.8%</td>
</tr>
<tr>
<td class="firstcol">Future</td>
<td>36.1</td>
<td>38.2</td>
<td>39.5</td>
<td>35.8</td>
<td>1.4%</td>
<td>11.5%</td>
<td>17.8%</td>
</tr>
<tr>
<td class="firstcol">NTC MFG</td>
<td>48.6</td>
<td>49.5</td>
<td>50.8</td>
<td>52.4</td>
<td>0.0%</td>
<td>6.0%</td>
<td>30.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">Econ
Trends
(Teikoku'/50 neutral/weighted diffusion)</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>36.9</td>
<td>37.8</td>
<td>38.5</td>
<td>37.9</td>
<td>0.0%</td>
<td>0.0%</td>
<td>4.4%</td>
</tr>
<tr>
<td class="firstcol">Retail</td>
<td>32.1</td>
<td>33.2</td>
<td>32.6</td>
<td>31.3</td>
<td>5.9%</td>
<td>13.6%</td>
<td>9.4%</td>
</tr>
<tr>
<td class="firstcol">Wholesale</td>
<td>34.5</td>
<td>34.9</td>
<td>35.3</td>
<td>34.5</td>
<td>0.3%</td>
<td>3.6%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>40.4</td>
<td>40.5</td>
<td>41.0</td>
<td>40.4</td>
<td>0.0%</td>
<td>1.1%</td>
<td>5.4%</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>28.0</td>
<td>29.3</td>
<td>29.7</td>
<td>28.9</td>
<td>0.0%</td>
<td>4.3%</td>
<td>7.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="8">100 is high;
Zero is low</td>
</tr>
</tbody>
</table>
Italy&#8217;s Manufacturing Output Slips
and EMU Tops Out 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 12, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512b.jpg" align="left" border="0" height="265" width="353">
The quarter to date (which is now the completed 2008-Q1
period) shows still strong results for Italian output. But the monthly
numbers reveal a different trend. The quarter&#8217;s lift stems totally from
the spurt in output in January. Since then output trends are on the
decline in all sectors with the exception of transportation. Consumer
goods output spurted by 3.6% in January, then fell by 2.6% in February
and fell further, by 0.7% in March. Capital goods output has declined
in March. Intermediate goods output is off for the last two months in a
row &#8211; just about negating the rise in January.

The graph shows that output trends in France and Germany are
topping while Italy is seeing the sharpest deceleration among the EMU
big-three economies.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Italy IP
Excluding Construction </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">SAAR except m/m</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-date</td>
</tr>
<tr>
<td class="firstcol">IP-MFG</td>
<td>0.0%</td>
<td>-0.2%</td>
<td>1.9%</td>
<td>7.0%</td>
<td>-1.4%</td>
<td>-1.9%</td>
<td>5.3%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>-0.7%</td>
<td>-2.6%</td>
<td>3.6%</td>
<td>0.9%</td>
<td>-2.1%</td>
<td>-4.3%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>6.3%</td>
<td>27.9%</td>
<td>-0.8%</td>
<td>-1.2%</td>
<td>16.1%</td>
</tr>
<tr>
<td class="firstcol">Intermediary Goods</td>
<td>-0.5%</td>
<td>-0.7%</td>
<td>1.3%</td>
<td>0.0%</td>
<td>-4.1%</td>
<td>-3.1%</td>
<td>1.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Transportation</td>
<td>2.7%</td>
<td>1.7%</td>
<td>3.0%</td>
<td>33.8%</td>
<td>0.7%</td>
<td>5.7%</td>
<td>6.2%</td>
</tr>
</tbody>
</table>
Inflation in Eastern Europe 
by <a href="/comment/Curley.html">Louise
Curley</a> May 12, 2008



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512e.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512d.jpg" border="0" height="265" width="312">
Four Eastern European countries--the Czech Republic, Romania,
Latvia and Lithuania--reported inflation rates for April today.
Inflation rates are shown in the first chart. In April inflation ranged
from a low of 6.8% for the Czech Republic to a high of 17.4% in Latvia.
Lithuania, the other Baltic state reporting today, also reported a high
rate of inflation, 11.7%, while inflation in Romania came in at 8.6%.
Inflation in these countries began to take off in early 2007, as in so
many other countries, with the rises in the prices of food and oil.
Latvia and Lithuania have kept their policy interest rate
unchanged while the Czech Republic and Romania have increased them.
However, all four countries have negative interest rates as shown in
the second and third charts.
Only the Czech Republic has experienced an appreciation of its
currency relative to the Euro that has been a major factor in keeping
its inflation relatively subdued. Latvia and Lithuania have tied their
currencies to the Euro and Romania has recently seen its currency
depreciate. The Euro exchange rates of the four countries are shown in
the fourth chart.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512f.jpg" border="0" height="265" width="312"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080512c.jpg" border="0" height="265" width="312"> 


<table border="0" cellspacing="0" width="100%">
</table>
<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;INFLATION&nbsp;(%)</th>
<th scope="col">Apr 08</th>
<th scope="col">Mar&nbsp; 08&nbsp;</th>
<th scope="col">Feb 08</th>
<th scope="col">Jan 08&nbsp;</th>
<th scope="col">Apr 07&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Czech Republic</td>
<td>6.8</td>
<td>7.1</td>
<td>7.5</td>
<td>7.5</td>
<td>2.5</td>
<td>2.8</td>
<td>2.5</td>
<td>1.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Romania</td>
<td>8.6</td>
<td>8.6</td>
<td>8.0</td>
<td>7.3</td>
<td>3.8</td>
<td>4.8</td>
<td>6.6</td>
<td>9.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Latvia</td>
<td>17.5</td>
<td>16.8</td>
<td>16.7</td>
<td>15.8</td>
<td>8.9</td>
<td>10.1</td>
<td>6.5</td>
<td>6.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Lithuania</td>
<td>11.7</td>
<td>11.3</td>
<td>10.8</td>
<td>9.9</td>
<td>4.8</td>
<td>5.7</td>
<td>3.7</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;POLICY
INTEREST RATE</td>
<td>May&nbsp; 08&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Czech Republic</td>
<td>3.75</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Romania</td>
<td>9.75</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Latvia</td>
<td>6.0</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Lithuania</td>
<td>5.0</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
</body></html>

As it usually does in April, the U.S. government ran a budget surplus of $159.3B. The figure was down slightly, however, from last year's unusually large April surplus of $177.7B. Based on expectations formed by Public Debt [...]

U.S. April Budget Surplus Down, 2008 FYTD Deficit Nearly Doubled

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<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509d.jpg" align="left" border="0">
France remains a quintessential e-Zone economy. Its consumer
sector has gone slack but capital goods output is still churning up a
storm. Still capital goods is lagging sector. Its output can tend to
stay strong as its industries turn out goods that are legacy of strong
demand earlier in the cycle; it can lag in recovery as well, as demand
for new equipments waits on the moment that new capital constraints are
encountered. Capital goods is lagging sector in the economy. For this
reason I do not take its &#8216;enduring strength&#8217; as sign that it will
bootstrap the rest of the economy into expansion. 
 

The chart above shows the longer term relationship between
consumer goods and capital goods output trends in France. History also
tells us that the weakness in the consumer sector is something to be
wary of &#8211; the sector tends to be a harbinger. 
 

The banking sector problems in Europe and in France, the
strong euro exchange rate, the slippage in various domestic surveys,
give us even more reason to be wary of what has been ongoing strength
in the capital goods sector. It seems to have become a sector with
increasingly poor fundamentals despite its resilience. 
 


<table border="0" cellspacing="0" width="100%">
</table>

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col">French IP Excluding construction </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-date</td>
</tr>
<tr class="odd">
<td class="firstcol">IP total</td>
<td>-0.8%</td>
<td>0.5%</td>
<td>0.4%</td>
<td>0.0%</td>
<td>2.1%</td>
<td>1.0%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer</td>
<td>-0.8%</td>
<td>0.2%</td>
<td>1.7%</td>
<td>4.4%</td>
<td>-2.3%</td>
<td>-1.6%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital</td>
<td>-1.1%</td>
<td>2.0%</td>
<td>0.0%</td>
<td>3.7%</td>
<td>5.2%</td>
<td>4.9%</td>
<td>4.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermed</td>
<td>-1.7%</td>
<td>0.4%</td>
<td>1.2%</td>
<td>-0.4%</td>
<td>0.4%</td>
<td>-1.1%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Auto</td>
<td>-2.9%</td>
<td>-2.1%</td>
<td>1.1%</td>
<td>-14.6%</td>
<td>2.8%</td>
<td>-1.0%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
</body></html>

France remains a quintessential e-Zone economy. Its consumer sector has gone slack but capital goods output is still churning up a storm. Still capital goods is lagging sector. Its output can tend to stay strong as its industries turn [...]

France: With Consumer and Intermediate Goods Output Weakening… Can Capital Goods Be Far Behind?

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509a.jpg" width="353">
The U.S. foreign trade deficit narrowed unexpectedly to $58.2B in March from $61.7B in February, revised slightly shallower. Consensus expectations had been for a March deficit of $61.2B. So far this year the deficit has averaged $59.6B, slightly deeper than during all of last year.
The weaker U.S. economy, along with the sagging value of the dollar continued to weigh on imports. A 2.9% month to month decline reflected a 2.7% drop in imports of nonpetroleum products. Measured in chained 2000 dollars these imports fell 3.6% pulling the year to year change down to -3.8%. Also in chained dollars, imports of capital goods reversed all of the February rise with a 2.2% (+3.0% y/y) decline. The 3.2% shortfall in chained imports of nonauto consumer goods was the third drop in four months and it left them down 4.7% y/y. Real imports of automotive vehicles &amp; parts fell 9.4% (-10.3% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509b.jpg" width="353">
Higher oil prices and the weaker U.S. economy together worked to lower the quantity of energy-related petroleum imports by 1.0% (-14.1% y/y) after a 12.8% February drop. The nominal value of petroleum product imports rose 5.7% (41.9% y/y) as crude oil prices rose 6.0% (69.5% y/y) to an average $89.85 per barrel.
U.S. exports in March gave back their February rise with a 1.7% decline, but the relative strength of foreign economies lifted the year to year gain to 15.5%. But that firm trend has weakened recently. Goods exports fell 2.7% in March but in chained dollars they fell by 4.4% (+6.0% y/y). Chained dollar exports of nonauto consumer goods fell 5.7% (+3.3% y/y) after a 1.2% February decline. Exports of industrial supplies &amp; materials also fell a sharp 4.5% (+10.2% y/y). Exports of capital goods were down for the fourth month in the last five, by 3.2% (+6.8% y/y). Exports of civilian aircraft recently have wobbled. In March they fell 31.9% (+6.1% y/y) for the fourth decline in the last five months. Exports of computers also fell a sharp 10.5% (+16.2 y/y). Finally, chained dollar exports of nonauto consumer goods fell 5.7% (+3.3% y/y) while real automotive exports fell 9.2% (-4.5% y/y).<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509c.jpg" width="353">
The U.S. trade deficit in goods with China improved sharply m/m to $16.1B, the smallest deficit in two years. Imports from China fell 7.0% (-1.3% y/y) for the fourth sharp decline in five months while March exports to China, conversely, rose 10.0% (16.0% y/y). The trade deficit with Europe deepened to $74.5B as exports rose 4.4% y/y and imports rose 2.6%.
Exports of services slipped 0.1% (+15.9% y/y) as travel exports fell 0.1% (+23.0% y/y) and passenger fares rose 1.8% (23.3% y/y).
Services imports fell 0.2% (+12.1% y/y). Travel imports nudged up 0.2% (6.4% y/y) and passenger fares fell 0.4% (+16.9% y/y).
Macroeconomic interdependence and the international role of the dollar from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/staff_reports/sr316.pdf"> here</a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE01/@EE01.HTM">Foreign Trade&nbsp;</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">U.S. Trade Deficit</td>
<td>$58.2B</td>
<td>$61.7B</td>
<td>$63.0B (3/07)</td>
<td>$708.5</td>
<td>$758.5</td>
<td>$714.4B</td>
</tr>
<tr>
<td class="firstcol">Exports - Goods &amp; Services</td>
<td>-1.7%</td>
<td>1.8%</td>
<td>15.5%</td>
<td>12.6%</td>
<td>12.7%</td>
<td>10.9%</td>
</tr>
<tr>
<td class="firstcol">Imports - Goods &amp; Services</td>
<td>-2.9%</td>
<td>2.6%</td>
<td>7.9%</td>
<td>6.0%</td>
<td>10.4%</td>
<td>12.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>-5.9%</td>
<td>-5.9%</td>
<td>40.9%</td>
<td>9.5%</td>
<td>20.1%</td>
<td>39.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>-2.7%</td>
<td>5.0%</td>
<td>0.9%</td>
<td>4.6%</td>
<td>9.1%</td>
<td>10.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

The U.S. foreign trade deficit narrowed unexpectedly to $58.2B in March from $61.7B in February, revised slightly shallower. Consensus expectations had been for a March deficit of $61.2B. So far this year the deficit has averaged [...]

U.S. Trade Deficit Narrowed Unexpectedly in March

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509a.jpg" align="left" border="0" height="265" width="353">
The U.S. foreign trade deficit narrowed unexpectedly to $58.2B
in March from $61.7B in February, revised slightly shallower. Consensus
expectations had been for a March deficit of $61.2B. So far this year
the deficit has averaged $59.6B, slightly deeper than during all of
last year.
The weaker U.S. economy, along with the sagging value of the
dollar continued to weigh on imports. A 2.9% month to month decline
reflected a 2.7% drop in imports of nonpetroleum products. Measured in
chained 2000 dollars these imports fell 3.6% pulling the year to year
change down to -3.8%. Also in chained dollars, imports of capital goods
reversed all of the February rise with a 2.2% (+3.0% y/y) decline. The
3.2% shortfall in chained imports of nonauto consumer goods was the
third drop in four months and it left them down 4.7% y/y. Real imports
of automotive vehicles &amp; parts fell 9.4% (-10.3% y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509b.jpg" align="right" border="0" height="265" width="353">
Higher oil prices and the weaker U.S. economy together worked
to lower the quantity of energy-related petroleum imports by 1.0%
(-14.1% y/y) after a 12.8% February drop. The nominal value of
petroleum product imports rose 5.7% (41.9% y/y) as crude oil prices
rose 6.0% (69.5% y/y) to an average $89.85 per barrel.
U.S. exports in March gave back their February rise with a
1.7% decline, but the relative strength of foreign economies lifted the
year to year gain to 15.5%. But that firm trend has weakened recently.
Goods exports fell 2.7% in March but in chained dollars they fell by
4.4% (+6.0% y/y). Chained dollar exports of nonauto consumer goods fell
5.7% (+3.3% y/y) after a 1.2% February decline. Exports of industrial
supplies &amp; materials also fell a sharp 4.5% (+10.2% y/y).
Exports of capital goods were down for the fourth month in the last
five, by 3.2% (+6.8% y/y). Exports of civilian aircraft recently have
wobbled. In March they fell 31.9% (+6.1% y/y) for the fourth decline in
the last five months. Exports of computers also fell a sharp 10.5%
(+16.2 y/y). Finally, chained dollar exports of nonauto consumer goods
fell 5.7% (+3.3% y/y) while real automotive exports fell 9.2% (-4.5%
y/y).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509c.jpg" align="left" border="0" height="265" width="353">
The U.S. trade deficit in goods with China improved sharply
m/m to $16.1B, the smallest deficit in two years. Imports from China
fell 7.0% (-1.3% y/y) for the fourth sharp decline in five months while
March exports to China, conversely, rose 10.0% (16.0% y/y). The trade
deficit with Europe deepened to $74.5B as exports rose 4.4% y/y and
imports rose 2.6%.
Exports of services slipped 0.1% (+15.9% y/y) as travel
exports fell 0.1% (+23.0% y/y) and passenger fares rose 1.8% (23.3%
y/y).
Services imports fell 0.2% (+12.1% y/y). Travel imports nudged
up 0.2% (6.4% y/y) and passenger fares fell 0.4% (+16.9% y/y).
Macroeconomic interdependence and the international
role of the dollar from the Federal Reserve Bank of New York
can be found <a href="http://www.newyorkfed.org/research/staff_reports/sr316.pdf">
here</a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EE/@EE01/@EE01.HTM">Foreign
Trade&nbsp;</a></th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">U.S. Trade Deficit</td>
<td>$58.2B</td>
<td>$61.7B</td>
<td>$63.0B (3/07)</td>
<td>$708.5</td>
<td>$758.5</td>
<td>$714.4B</td>
</tr>
<tr>
<td class="firstcol">Exports - Goods &amp;
Services</td>
<td>-1.7%</td>
<td>1.8%</td>
<td>15.5%</td>
<td>12.6%</td>
<td>12.7%</td>
<td>10.9%</td>
</tr>
<tr>
<td class="firstcol">Imports - Goods &amp;
Services</td>
<td>-2.9%</td>
<td>2.6%</td>
<td>7.9%</td>
<td>6.0%</td>
<td>10.4%</td>
<td>12.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>-5.9%</td>
<td>-5.9%</td>
<td>40.9%</td>
<td>9.5%</td>
<td>20.1%</td>
<td>39.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>-2.7%</td>
<td>5.0%</td>
<td>0.9%</td>
<td>4.6%</td>
<td>9.1%</td>
<td>10.3%</td>
</tr>
</tbody>
</table>
France: With Consumer andIntermediate Goods Output Weakening&#8230;&nbsp; Can Capital Goods Be Far
Behind? 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 9, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080509d.jpg" align="left" border="0">
France remains a quintessential e-Zone economy. Its consumer
sector has gone slack but capital goods output is still churning up a
storm. Still capital goods is lagging sector. Its output can tend to
stay strong as its industries turn out goods that are legacy of strong
demand earlier in the cycle; it can lag in recovery as well, as demand
for new equipments waits on the moment that new capital constraints are
encountered. Capital goods is lagging sector in the economy. For this
reason I do not take its &#8216;enduring strength&#8217; as sign that it will
bootstrap the rest of the economy into expansion. 
 

The chart above shows the longer term relationship between
consumer goods and capital goods output trends in France. History also
tells us that the weakness in the consumer sector is something to be
wary of &#8211; the sector tends to be a harbinger. 
 

The banking sector problems in Europe and in France, the
strong euro exchange rate, the slippage in various domestic surveys,
give us even more reason to be wary of what has been ongoing strength
in the capital goods sector. It seems to have become a sector with
increasingly poor fundamentals despite its resilience. 
 


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">French IP
Excluding construction </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-date</td>
</tr>
<tr class="odd">
<td class="firstcol">IP total</td>
<td>-0.8%</td>
<td>0.5%</td>
<td>0.4%</td>
<td>0.0%</td>
<td>2.1%</td>
<td>1.0%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer</td>
<td>-0.8%</td>
<td>0.2%</td>
<td>1.7%</td>
<td>4.4%</td>
<td>-2.3%</td>
<td>-1.6%</td>
<td>2.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital</td>
<td>-1.1%</td>
<td>2.0%</td>
<td>0.0%</td>
<td>3.7%</td>
<td>5.2%</td>
<td>4.9%</td>
<td>4.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermed</td>
<td>-1.7%</td>
<td>0.4%</td>
<td>1.2%</td>
<td>-0.4%</td>
<td>0.4%</td>
<td>-1.1%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Auto</td>
<td>-2.9%</td>
<td>-2.1%</td>
<td>1.1%</td>
<td>-14.6%</td>
<td>2.8%</td>
<td>-1.0%</td>
<td>-1.0%</td>
</tr>
</tbody>
</table>
</body></html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080508f.jpg" align="left" border="0" height="265" width="353">
German orders have taken some time to weaken since the euro
began climbing strongly. Arguably it is now a plethora of factors that
are dogging the trend including the strong euro but also the fallout
from the financial turmoil and the transmission of weakness from
faltering growth in the US and elsewhere &#8211; to extent that theses things
are different.

Orders both domestic and foreign have eased their pace from
their year ago growth rate and also sequentially through six-month and
three-month growth rates as well. Both domestic and foreign orders have
decelerated their pace. The quarterly readings show negative growth
rates for both domestic and foreign orders in 2008-Q1.

But this slowing has yet to hit the pace of sales. Sales
growth rates are still largely rising except for consumer goods &#8211;long
the Achilles Heel of this expansion. Capital goods sales have slowed
but are still strong in the Q1 period. Intermediate goods sales remain
relatively robust.

On balance the orders figure that tend to lead the cycle show
that he boom days in MFG are coming to a close. Since they are slowing
sharply and since growth rates have turned negative, they hint that the
slowdown could be severe.


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col">German Orders and Sales By Sector and Origin </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-08</td>
<td>Feb-08</td>
<td>Jan-08</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr Ago</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-0.6%</td>
<td>-0.6%</td>
<td>-0.7%</td>
<td>-7.2%</td>
<td>-3.6%</td>
<td>5.1%</td>
<td>11.5%</td>
<td>-5.3%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>-0.4%</td>
<td>-1.1%</td>
<td>-0.4%</td>
<td>-7.6%</td>
<td>-3.9%</td>
<td>6.8%</td>
<td>12.7%</td>
<td>-9.6%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>-0.9%</td>
<td>0.0%</td>
<td>-0.9%</td>
<td>-6.6%</td>
<td>-3.4%</td>
<td>3.3%</td>
<td>10.4%</td>
<td>-0.2%</td>
</tr>
<tr class="even">
<td class="firstcol" colspan="9">Sector Sales</td>
</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>-0.5%</td>
<td>-0.2%</td>
<td>2.1%</td>
<td>5.9%</td>
<td>2.9%</td>
<td>4.6%</td>
<td>9.3%</td>
<td>9.2%</td>
</tr>
<tr>
<td class="firstcol">Consumer Goods</td>
<td>0.2%</td>
<td>-1.8%</td>
<td>1.0%</td>
<td>-2.3%</td>
<td>-1.1%</td>
<td>-0.7%</td>
<td>5.6%</td>
<td>-1.0%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-0.9%</td>
<td>-0.3%</td>
<td>0.8%</td>
<td>-1.6%</td>
<td>-0.8%</td>
<td>0.4%</td>
<td>5.1%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">Consumer Nondurables</td>
<td>0.4%</td>
<td>-2.0%</td>
<td>1.1%</td>
<td>-2.2%</td>
<td>-1.1%</td>
<td>-0.9%</td>
<td>5.9%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-2.7%</td>
<td>-0.8%</td>
<td>4.2%</td>
<td>2.7%</td>
<td>1.3%</td>
<td>5.4%</td>
<td>9.7%</td>
<td>10.9%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>1.9%</td>
<td>1.6%</td>
<td>0.2%</td>
<td>15.5%</td>
<td>7.5%</td>
<td>6.7%</td>
<td>11.2%</td>
<td>13.2%</td>
</tr>
<tr>
<td class="firstcol">All Manufacturing Sales</td>
<td>-0.5%</td>
<td>-0.2%</td>
<td>2.1%</td>
<td>5.7%</td>
<td>2.8%</td>
<td>4.1%</td>
<td>9.3%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
</body></html>

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

German Order Trends are Mostly Cycling Lower

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

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?

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Winnie Tapasanun

250805J23.jpg

250805K23.jpg

The U.S. trade deficit in goods and services (BOP basis) narrowed to $60.18 billion in June after widening to $71.66 billion in May ($71.52 billion originally), according to the U.S. Census Bureau. This was the second month in three in which the deficit had narrowed. The June deficit was the smallest since September 2023 and much smaller than the $73.89 billion in June 2024. A deficit of $61.6 billion had been expected in the Action Economics Forecast Survey. Exports declined 0.5% m/m (+3.3% y/y) in June following a 4.1% drop in May (-4.0% previously) and four successive m/m increases. Imports fell 3.7% (-1.4% y/y) after an unrevised 0.1% downtick in May, registering the third consecutive m/m fall and the fourth in five months.

The real (inflation-adjusted) goods trade deficit (customs value; chained 2017 dollars) narrowed to $84.61 billion in June after widening to $93.32 billion in May; it was smaller than the $92.82 billion in June 2024. The $87.43 billion average monthly real trade deficit in Q2'25 was the smallest since Q4'23 and much smaller than the record $143.28 billion in Q1'25. A trade balance (net exports) added 4.99%-points to Q2'25 real GDP growth after subtracting 4.61%-points in Q1'25.

The deficit in goods trade (BOP basis) narrowed to $85.88 billion in June, the smallest since September 2023, after widening to $97.30 billion in May; it was much smaller than the $99.56 billion in June 2024. Goods exports fell 0.7% (+3.3% y/y) in June following a 5.9% drop in May and four straight m/m rises. Imports of goods fell 4.5% (-2.9% y/y), down for the fourth month in five, after a 0.1% May easing.

The customs value goods trade deficit fell to $84.85 billion in June, the smallest since September 2023, after widening to $96.21 billion in May; it was much smaller than the $98.81 billion in June 2024. The latest figure was slightly smaller than an $85.99 billion deficit in the advance report released on July 29. Custom value exports fell 0.7% (+3.5% y/y) in June following a 5.6% drop in May and four consecutive m/m gains. This reflected m/m falls of 7.4% (+0.7% y/y) in industrial supplies & materials and 2.6% (+22.8% y/y) in other goods. To the upside, exports for the following end-use categories rose m/m in June: nonfood consumer goods excluding autos (4.6%; 4.3% y/y), foods, feeds & beverages (4.4%; 1.2% y/y), capital goods excluding autos (3.4%; 9.7% y/y), and automotive vehicles, parts & engines (1.6%; -15.8% y/y).

Customs value imports slid 4.6% (-2.9% y/y) in June, the third straight m/m slide and the fourth in five months, after a 0.1% downtick in May. This reflected m/m drops of 12.7% (-13.3% y/y) in nonfood consumer goods excluding autos, 5.2% (-12.4% y/y) in industrial supplies & materials, 4.9% (+7.8% y/y) in other goods, 3.6% (-12.2% y/y) in automotive vehicles, parts & engines, and 1.5% (+3.8% y/y) in foods, feeds & beverages. In contrast, imports of capital goods excluding autos, the only end-use category with a monthly increase in June, rose 0.7% (14.0% y/y), the seventh m/m rise in eight months, on top of a 0.3% May rebound. Meanwhile, petroleum imports fell 3.8% (-24.7% y/y) in June, the fourth m/m fall in five months, reversing a 1.5% rise in May. Nonpetroleum imports slid 4.6% (-1.1% y/y), the third straight m/m slide, after a 0.2% May decline.

The services trade surplus rose to $25.70 billion in June after narrowing to $25.64 billion in May; it was in line with $25.67 billion in June 2024. Services exports fell 0.2% (+3.3% y/y) in June, the fifth m/m fall in six months, on top of a 0.6% decline in May. This reflected m/m drops of 4.8% (-11.3% y/y) in government goods & services, 2.1% (+30.8% y/y) in maintenance & repair services, and 1.1% (-0.02% y/y) in travel services, while exports for construction services (0.9%; -5.7% y/y), insurance services (0.7%; 18.9% y/y) and charges for the use of intellectual property (0.5%; 7.0% y/y) increased m/m in June. Services imports fell 0.3% (+4.5% y/y) after a 0.3% May fall and two successive m/m increases. This reflected m/m drops of 1.9% (+48.0% y/y) in maintenance & repair services, 1.5% (+2.9% y/y) in travel services and 1.3% (-1.3% y/y) in transport services, while imports for construction services (2.0%; 82.3% y/y), charges for the use of intellectual property (0.8%; 1.3% y/y) and financial services (0.5%; 4.9% y/y) rose m/m in June.

The U.S. goods trade deficit with China narrowed to a seasonally adjusted $9.38 billion in June, the smallest on record, after falling to $13.97 billion in May. Exports surged 45.4% (-16.6% y/y) following a 19.9% May slump, while imports fell 6.9% (-45.6% y/y) on top of a 26.3% May plunge. The goods trade deficit with the European Union narrowed markedly to $9.52 billion in June, the smallest since June 2013, after widening to $22.54 billion in May, with exports up 6.8% (16.6% y/y) and imports down 19.2% (-8.2% y/y). The trade shortfall with Japan narrowed marginally to $5.72 billion in June, the smallest since March, from $5.77 billion in the previous month, reflecting declines of 3.4% (-7.5% y/y) in exports and 2.3% (-0.4% y/y) in imports.

The international trade data, including relevant data on oil prices, can be found in Haver’s **USECON** database. Detailed figures on international trade are available in the **USINT** and **USTRADE** databases. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

250805L23.jpg

250805M23.jpg

- $60.2 bil. trade deficit, reflecting $85.9 bil. goods deficit & $25.7 bil. services surplus.
- Exports -0.5% m/m, down for the second consecutive month.
- Imports -3.7% m/m, down for the third straight month.
- Real goods trade deficit narrows to $84.6 bil. after May’s widening.
- Goods trade deficits w/ China at a record low, w/ EU at a June ’13 low, and w/ Japan at a 3-month low.

U.S. Trade Deficit Narrows in June; the Smallest Since Sept. ’23

250805E.jpg

The S&P Global PMI indexes once again showed mixed performance in July. Most large economies continue to do better, and the total PMI services sectors continue to make up for shortcomings in manufacturing.

**Stability on a low growth path**
In July, 24% of the reporting countries showed activity was slowing; that's down from 48% in both June and May and indicates some progress. Only five of the reporting jurisdictions have PMI values below 50 indicating economic contraction in July; that July figure compares to five in June and seven in May. Declining activity continues to be an unusual event. Medians and average readings for the group of 25 countries or regions show extreme stability in the recent months as well as across sequential averages.

**Growth moderately improves**
Comparing period averages from 12-months to six-months to three-months, unweighted readings of the U.S., the U.K., and European monetary union show extremely flat PMI values oscillating between values of 51.2 to 51.7 on those period averages; over three months, six months, and 12 months. The jurisdictions in the table show PMI readings below 50 are rare; once again declining activity is an unusual event. The proportion of reporters slowing over three months is 34.8% compared to 52.2% over six months and 30.4% over 12 months. Once again, we see these statistics tilted toward improving growth rather than towards slowing

**Summing up**
The queue percentile standings for the group in July have an average value at 65.9% which is above the 50% mark that coincides with the median for the period. This tells us the growth is largely better than what its median has been over the past 4 1/2 years. On a queue ranking basis, the largest economies consistently perform better with readings above the 50% mark for the U.S. and for the European Monetary System including each of its largest EMU economies: Germany, France, Italy, and Spain. Japan has a queue standing in its 57th percentile. However, China’s percentile standing is in its 26th percentile and the U.K. is at its 40.5 percentile. Not all large economies are in the catbird seat, but most are faring well despite the moderate growth track globally.

250805.jpg

Service Sectors Prop-up Global Economy

250804J1.jpg

250804K1.jpg

Total factory orders declined 4.8% (+5.6% y/y) in June after surging 8.3% in May, revised from 8.2%, as reported by the U.S. Census Bureau. A 4.9% decline had been expected in the Action Economics Forecast Survey. A halving in orders for nondefense aircraft accounted for much of the June decline. Factory orders excluding transportation altogether rose 0.4% after increasing 0.3% in May, revised from 0.2%.

Durable goods orders fell 9.4% (+10.9% y/y) in June after 16.5% rise in May. The advance report indicated a 9.3% decline. Transportation orders fell 22.4% (+30.5% y/y). Automobile orders declined 3.1% (-2.7% y/y). Computer & electronic product orders increased 0.6% (5.2% y/y) while electrical equipment, appliances & components rose 0.1% (4.5% y/y). Machinery orders improved 0.3% (3.0% y/y). Furniture & related products increased 0.1% (1.1% y/y). Primary metals orders increased 0.6% (-0.5% y/y) while fabricated metals orders edged 0.1% (3.1% y/y) higher.

Nondurable goods orders, which equal nondurable goods shipments, rose 0.5% (0.6% y/y) in June after edging 0.1% higher in May. Shipments of petroleum & coal products rose 1.4% (-4.5% y/y) and beverage & tobacco products rose 1.5% (4.2% y/y). Food product shipments improved 0.4% (0.9% y/y) and textile product shipments rose a minimal 0.1% (1.9% y/y). To the downside, apparel shipments declined 0.9% (-4.7% y/y) and chemical product shipments eased 0.1% (+3.6% y/y). Paper products declined 0.3% (+0.7% y/y).

Total shipments increased 0.5% (1.8% y/y) in June following a 0.2% May increase. Excluding transportation, shipments rose 0.4% (1.3% y/y) in June after a 0.1% uptick in May. Shipments of durable goods industries rose 0.5% (3.0% y/y) in April, the seventh consecutive m/m rise.  Transportation equipment shipments rose 0.8% (4.3% y/y) as nondefense aircraft shipments fell 6.2% (+13.8% y/y). Machinery shipments rose 1.0% (1.5% y/y), and electrical equipment, appliances & components shipments increased 0.6 (4.6% y/y). Primary metals shipments rose 0.6% (2.4% y/y), fabricated metals shipment rose 0.2% (1.9% y/y), but furniture & related products eased 0.2% (+1.4% y/y).

Unfilled orders rose 1.0% (7.1% y/y) in June after a 3.4% jump in May. Excluding transportation, unfilled orders held steady (+0.8 y/y) after a 0.1% rise in May. Backlogs of durable goods increased 1.0% (7.1% y/y), reflecting a 2.1% rise (14.7% y/y) in nondefense aircraft and a 0.1% decline (-1.8% y/y) in machinery. Electrical equipment, appliances & components backlogs also rose 0.1% (1.0% y/y) while computer & electronic equipment backlogs eased 0.1% both m/m and y/y.
 
Inventories increased 0.2% (1.1% y/y) in June after edging 0.1% higher in May. Excluding transportation, inventories rose 0.2% (1.0% y/y) in June after a 0.1% uptick in May. Durable goods inventories rose 0.2% (1.5% y/y) in June, the same as in May, and rose 0.1% in both of the prior two months. Nondurable goods inventories increased 0.2% 0.5% y/y) after declines in both of the prior two months.

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

250804L1.jpg

250804M1.jpg

- Total orders less transportation rise moderately.
- Shipments pick up.  
- Unfilled orders surge as inventories rise modestly.

U.S. Factory Orders Retreat in June, Largely Centered in Aircraft

Tian Yong Woon

This week, we examine the latest wave of trade developments across Asia as the US unveiled a full list of its modified reciprocal tariff rates, set to take effect on August 7. As anticipated, many of the updated rates are now lower than the original tariffs, with Cambodia and Vietnam seeing the sharpest reductions (chart 1). However, from peak tariff levels, China stands out—continuing to benefit from a 10% pause rate, down from triple-digit highs.

South Korea secured a deal just before the deadline, lowering its tariff from 25% to 15%. The new rate also applies to auto exports, offering relief to Korean automakers (chart 2). Thailand and Cambodia followed with US trade agreements after agreeing to an unconditional ceasefire following earlier military clashes. Their US-imposed tariffs dropped from 36% to 19%, highlighting how US trade policy can intersect with geopolitical interests and, in this case, may help reduce trade uncertainty (chart 3).

Malaysia, a key mediator in the ceasefire, also finalized a trade deal, reducing its tariff rate to 19% and gaining exemptions on key exports such as semiconductors (chart 4). Turning to Japan, while its US trade deal helped avert immediate tensions, the vague terms and a headline $550 billion investment—mostly in the form of loans—leave room for future friction (chart 5). China, however, remains a wildcard. Talks to extend its tariff pause are ongoing, but failure could see a return to extreme tariff levels (chart 6). Meanwhile, tech tensions linger, despite eased restrictions on Nvidia AI chip exports.

**Latest US tariff developments**
We gained further clarity on the new reciprocal tariff rates announced by the US administration last week, as the White House released a full list of the modified rates on Thursday. It also announced that the new rates will take effect on August 7, giving partner countries a bit more time to negotiate new terms. Overall, as earlier indications suggested, Trump’s post-pause tariff rates—regardless of whether trade deals were secured—have often ended up lower than the original rates, as shown in chart 1. The largest reductions from original tariff levels have so far come from Cambodia and Vietnam. However, when looking at the steepest reductions from peak tariff rates, China stands out. It continues to benefit from a 10% tariff pause—down sharply from the triple-digit rates imposed at the height of US-China trade tensions earlier this year. On the flipside, a handful of economies—including New Zealand, the Philippines, and Brunei—are now facing modified tariff rates that are actually higher than their original Liberation Day levels. Notably, the Philippines ended up in this group despite having secured a trade deal with the US.

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**South Korea**
As for South Korea, the US reduced its tariff rate to 15% just ahead of the August 1 deadline, a significant drop from the original Liberation Day rate of 25%. In return, South Korea committed to, among other terms, $350 billion in investments into the US. Of that total, $150 billion will go specifically toward shipbuilding cooperation—supporting the entry of Korean firms into the US shipbuilding industry—while the remaining $200 billion will be directed toward semiconductors and other sectors. Similar to Japan’s arrangement, the new 15% tariff rate will also apply to South Korean auto exports, likely providing relief to the country’s automakers. As shown in chart 2, South Korea’s vehicle exports—and, by extension, its export-driven growth—have come under pressure, with more recent headwinds stemming from the broad 25% auto tariffs imposed by the US. Notably, South Korea’s dealmaking pace with the US has been considered exceptionally swift, especially given that the country had only recently undergone an administrative transition following its presidential elections, leaving limited time to initiate formal trade negotiations.

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**Thailand and Cambodia**
Moving to other parts of Asia, one of the more notable developments last week was the signing of two additional US trade deals—specifically with Thailand and Cambodia. The two countries had recently been engaged in escalating border clashes but agreed to an unconditional ceasefire after mediation by Malaysia and the US. In reality, tensions between Thailand and Cambodia had been simmering for some time, likely driving in part the heightened uncertainty shown in chart 3, though other factors may have played a role. Notably, US President Trump stated that he had made it clear to both governments that no trade deal would be considered while they remained in conflict—an ultimatum that may have incentivized both sides to pursue de-escalation. Ultimately, US trade deals with both countries were announced, reducing their tariff rates from the original Liberation Day level of 36% to 19%. This illustrates how the US approach to dealmaking goes beyond trade, sometimes factoring in broader geopolitical considerations as well.

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**Malaysia**
Touching further on Malaysia, which played a key role in mediating the Thailand-Cambodia conflict mentioned earlier, a last-minute US-Malaysia trade deal also materialized shortly after the agreements with Thailand and Cambodia were hinted at. Under the new terms, Malaysia’s tariff rate was reduced to 19%, down from the original 24%. Malaysian Trade Minister Zafrul described the deal as a “win-win,” noting that Malaysia has either reduced or eliminated tariffs on nearly all American products. Notably—and perhaps offering some interim relief—Malaysia also secured tariff exemptions for its exports of semiconductors and pharmaceuticals. This is especially significant, as semiconductor exports account for a substantial share of Malaysia’s shipments to the US, as shown in chart 4.

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**Japan**
Turning to Japan, the recent US-Japan trade deal appears to have averted the worst for now. However, many key details remain unclear, particularly regarding Japan’s reported $550 billion investment into the US. While the headline figure is striking, Japan’s chief trade negotiator, Akazawa, later clarified that only 1–2% of the amount would constitute actual investment, with the remainder largely consisting of loans. More critically, the deal—like several other recent US-Asia trade agreements—was not accompanied by formal documentation, leaving its terms vague and, perhaps more concerning, open to future revision. These loose ends present ongoing risks to US-Japan economic relations and could potentially unwind recent market gains driven by trade optimism, as uncertainty remains and may yet resurface (see chart 5). This lingering uncertainty likely contributed to the Bank of Japan’s decision to hold its policy rate steady last week. The central bank adopted a wait-and-see approach before considering further rate hikes, while notably revising its inflation forecasts upward and presenting a slightly improved growth outlook for the fiscal year.

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**China**
Amid the recent flurry of US trade deals, one critical issue that may have slipped from the spotlight—but remains central to the global outlook —is China. Ongoing discussions between the two countries aim to extend China’s current tariff pause. If talks break down, US Treasury Secretary Scott Bessent has warned that the existing 10% tariff on Chinese exports could “boomerang” back to its previously exorbitant levels. This could potentially drive the US effective import tariff rate on China well above its already-elevated levels, as shown in chart 6. Meanwhile, the recent reversal of export restrictions by the US on Nvidia’s H20 AI chips may have brought temporary relief to China’s AI sector. However, Chinese authorities have raised national security concerns over the chips’ built-in tracking features and potential remote shutdown capabilities—adding yet another layer of complexity to the already tense US-China trade relationship and broader economic rivalry.

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Asia

Economic Letter from Asia: New Duty Roster

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Nonfarm payrolls increased 73,000 during July after rising 14,000 in June, revised from 147,000, and 19,000 in May, revised from 144,000. Expectations had been for a 102,000 rise in the Action Economics Forecast Survey. The three-month average change in payrolls of 35,000 compared to 64,000 in June. The Bureau of Labor Statistics indicates that monthly revisions result from additional reports received from businesses and government agencies since the last published estimates.

Average hourly earnings rose an expected 0.3% during July after unrevised gains of 0.2% and 0.4% in June & May. Earnings growth of 3.9% y/y is little changed over twelve months, but has been trending lower from its 5.9% high in March 2022.

The unemployment rate, measured in the household survey, edged up m/m to an expected 4.2% from 4.1% and compared to 4.2% in the previous three months. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, rose to 7.9% last month from 7.7% In June. It was 6.6% in April 2023.

In the **establishment survey**, private-sector employment in July rose 83,000, factory sector jobs declined 11,000, off for the third straight month. Construction sector employment increased 2,000, after rising 3,000 in June. The number of mining & logging industry jobs declined 4,000 after falling in both of the prior two months. 

Private service sector employment increased 96,000 July after improving 16,000 in June. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 79,000 last month, following a 52,000 increase in June. The number of trade, transportation & utilities jobs gained 11,000, following a 22,000 decline and financial activities employment improved 15,000 after a 2,000 drop, while leisure & hospitality employment rose just 5,000 after a 4,000 gain. The number of professional & business services jobs fell 14,000, down for the third straight month.  Information sector employment fell 2,000, after holding steady in June.

Government sector payrolls declined 10,000 last month and revered June’s 11,000 rise. Federal government employment weakened 12,000 and has fallen for six straight months. Local government employment eased 3,000 after rising 10,000 in June while state government payrolls rose 5,000 after increasing 10,000.

Private-sector average hourly earnings rose 0.3% (3.9% y/y) in July. Earnings in the goods-producing sector edged up 0.1% (3.6% y/y). In construction, earnings rose 0.2% (3.7% y/y) following a 0.4% rise, but factory sector earnings eased 0.1% (+3.6% y/y). In the service sector, earnings rose 0.4% (4.0% y/y) in July after increasing 0.2% in June.

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The length of the average workweek rose to 34.3 hours in July from 34.2 hours in June. The workweek in the goods-producing sector lengthened to 39.9 hours from 39.7 hours. The construction sector average workweek rose to 39.1 hours from 38.9 while the factory sector workweek held steady at 40.1 hours. The average workweek in the private service sector edged up to 33.2 hours from 33.1 hours.

In the **household survey**, the unemployment rate increased to 4.2% in July after falling to 4.1% as employment fell 260,000 after rising 93,000 in June and the size of the labor force declined 38,000, off for the third straight month. The labor force participation rate eased to 62.2% last month from 62.3% and remained below the high of 63.3% early in 2020. The rate for teenagers declined to 35.0%, after plunging to 35.1%. For workers aged 20-24, the rate declined to 70.9%. For workers aged 25-54, the participation rate eased to 83.4%. For individuals 55 and over, the rate improved slightly to 38.1% but remained near a 20-year low of 38.0% in June.

The employment/population ratio for all workers slipped to 59.6% last month. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic. For men, the rate fell to 64.7% in July from 64.9% and for women, the rate eased to 54.7% from 54.8% in June.

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

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- Recent job growth reduced by fewer factory & government jobs.
- Earnings gain remains steady y/y.
- Jobless rate reverses June decline.

Economy in Brief: May 2008

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Inflation in Eastern Europe

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