Carol Stone, CBE

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050810b.jpg" width="353">
Singapore produces, refines and exports oil. Oil supports growth. But it may also make for a more volatile economy than a country with greater diversity. In Q2, Singapore&#39;s real GDP grew 3.0%, following a 1.2% decrease in Q1, and a gain of 5.2% since the year-ago quarter. Growth in 2004 was a strong 8.4%, with domestic spending sectors also running at just about that pace. Private consumption was up 2.1% in the latest quarter, but only 2.3% during the last year, a considerable moderation from 2004&#39;s 8.6% surge. Investment, called here &quot;GFCF&quot; -- Gross Fixed Capital Formation -- is similarly erratic, up in Q2, but otherwise tracing a zigzag pattern. Consumption has absorbed a fairly steady 42% of GDP in the last several years, but investment outlays have drifted down to 24% by Q2, a record low in the 30-year-long history of the Singapore national accounts.
Net exports, by contrast, are gaining. Five years ago, they were 18% of real GDP, and in Q2 2005, they were 34% of the total. Similarly, in current prices, oil exports were 13.6% of GDP five years ago, and in Q2, they were 27.5%, slightly more than twice as large a share. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050810c.jpg" width="353">
So what about this volatility? In the second graph, we see clearly that Singapore&#39;s GDP growth is both stronger and more erratic than that of the US, as indicated by a simple average of quarterly growth rates over a long span of years and the standard deviation accompanying them. Since the US is hardly representative of the world at large, we checked several other countries. The same holds for a diverse group including France, Australia and the Czech Republic: slower but steadier growth than Singapore. South Korea, which does not produce oil for export, nonetheless has as much growth and as much volatility as Singapore. Russia, an oil producer, has seen average quarterly growth similar to the US, but volatility higher than any other of these nations. Clearly the structures of all these economies are far more complex than our simple comparison here, but our result does suggest that reliance on oil can make for unsteady economic performance.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Singapore</th>
<th scope="col">Q2 2005</th>
<th scope="col">Q1 2005</th>
<th scope="col">Q2 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real GDP</td>
<td>3.0%</td>
<td>-1.2%</td>
<td>5.2%</td>
<td>8.4%</td>
<td>2.5%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Private Consumption</td>
<td>2.1%</td>
<td>-0.1%</td>
<td>2.3%</td>
<td>8.6%</td>
<td>1.2%</td>
<td>5.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">GFCF</td>
<td>1.2%</td>
<td>-1.0%</td>
<td>-4.5%</td>
<td>8.5%</td>
<td>-5.5%</td>
<td>-8.5%</td>
</tr>
<tr>
<td class="firstcol">Current Account</td>
<td>S$15.3</td>
<td>S$12.1</td>
<td>S$10.7</td>
<td>S$47.1</td>
<td>S$47.0</td>
<td>S$33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports: Goods (current prices)</td>
<td>9.9%</td>
<td>-6.2%</td>
<td>11.4%</td>
<td>20.8%</td>
<td>12.3%</td>
<td>10.2%</td>
</tr>
<tr>
<td class="firstcol">Imports: Goods (current prices)</td>
<td>8.0%</td>
<td>-3.7%</td>
<td>9.8%</td>
<td>23.7%</td>
<td>7.9%</td>
<td>7.0%</td>
</tr>
</tbody>
</table>
</body>
</html>

Singapore produces, refines and exports oil. Oil supports growth. But it may also make for a more volatile economy than a country with greater diversity. In Q2, Singapore's real GDP grew 3.0%, following a 1.2% decrease in Q1, and a [...]

Singapore GDP Growth Moderately High at 3% in Q2, But Area Sees Erratic Moves, Possibly Tied to Oil

Tom Moeller

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050810a.jpg" width="353">
Total mortgage applications fell last week for the sixth decline in the last eight weeks according to the Mortgage Bankers Association. The 0.9% w/w decline lowered the starting level in August 5.8% below July which fell 1.4% from June.
Mortgage applications to refinance continued to decline as interest rates moved higher. The 3.3% w/w decline was the sixth in the last eight weeks and it lowered refi&#39;s 26.7% from the peak in early June.
During that period, the effective interest rate on a conventional 30-year mortgage rose to 6.16% from 5.87%. The effective rate on a 15-year mortgage also rose to 5.81%.
Purchase applications nevertheless continued to strengthen. Last week a 0.9% w/w gain lifted the starting level in August 0.6% above the July average which rose 0.9% versus June. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
Monetary Policy and Asset Price Bubbles from the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-18.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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">08/05/05</th>
<th scope="col">07/29/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>745.0</td>
<td>752.1</td>
<td>20.9%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>498.8</td>
<td>494.5</td>
<td>13.4%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,176.5</td>
<td>2,250.3</td>
<td>32.7%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Total mortgage applications fell last week for the sixth decline in the last eight weeks according to the Mortgage Bankers Association. The 0.9% w/w decline lowered the starting level in August 5.8% below July which fell 1.4% from [...]

Mortgage Applications Down With Less Refinancing

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050810a.jpg" width="353">
Total mortgage applications fell last week for the sixth decline in the last eight weeks according to the Mortgage Bankers Association. The 0.9% w/w decline lowered the starting level in August 5.8% below July which fell 1.4% from June.
Mortgage applications to refinance continued to decline as interest rates moved higher. The 3.3% w/w decline was the sixth in the last eight weeks and it lowered refi&#39;s 26.7% from the peak in early June.
During that period, the effective interest rate on a conventional 30-year mortgage rose to 6.16% from 5.87%. The effective rate on a 15-year mortgage also rose to 5.81%.
Purchase applications nevertheless continued to strengthen. Last week a 0.9% w/w gain lifted the starting level in August 0.6% above the July average which rose 0.9% versus June. During the last ten years there has been a 49% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
Monetary Policy and Asset Price Bubbles from the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2005/el2005-18.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/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">08/05/05</th>
<th scope="col">07/29/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>745.0</td>
<td>752.1</td>
<td>20.9%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>498.8</td>
<td>494.5</td>
<td>13.4%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,176.5</td>
<td>2,250.3</td>
<td>32.7%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
Singapore GDP Growth Moderately High at 3% in Q2, But Area Sees Erratic Moves, Possibly Tied to Oil 
by <a href="/comment/Stone.html">Carol Stone</a> August 10, 2005


<img align="left" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050810b.jpg">
Singapore produces, refines and exports oil. Oil supports growth. But it may also make for a more volatile economy than a country with greater diversity. In Q2, Singapore&#39;s real GDP grew 3.0%, following a 1.2% decrease in Q1, and a gain of 5.2% since the year-ago quarter. Growth in 2004 was a strong 8.4%, with domestic spending sectors also running at just about that pace. Private consumption was up 2.1% in the latest quarter, but only 2.3% during the last year, a considerable moderation from 2004&#39;s 8.6% surge. Investment, called here &quot;GFCF&quot; -- Gross Fixed Capital Formation -- is similarly erratic, up in Q2, but otherwise tracing a zigzag pattern. Consumption has absorbed a fairly steady 42% of GDP in the last several years, but investment outlays have drifted down to 24% by Q2, a record low in the 30-year-long history of the Singapore national accounts.
Net exports, by contrast, are gaining. Five years ago, they were 18% of real GDP, and in Q2 2005, they were 34% of the total. Similarly, in current prices, oil exports were 13.6% of GDP five years ago, and in Q2, they were 27.5%, slightly more than twice as large a share. <img align="right" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050810c.jpg">
So what about this volatility? In the second graph, we see clearly that Singapore&#39;s GDP growth is both stronger and more erratic than that of the US, as indicated by a simple average of quarterly growth rates over a long span of years and the standard deviation accompanying them. Since the US is hardly representative of the world at large, we checked several other countries. The same holds for a diverse group including France, Australia and the Czech Republic: slower but steadier growth than Singapore. South Korea, which does not produce oil for export, nonetheless has as much growth and as much volatility as Singapore. Russia, an oil producer, has seen average quarterly growth similar to the US, but volatility higher than any other of these nations. Clearly the structures of all these economies are far more complex than our simple comparison here, but our result does suggest that reliance on oil can make for unsteady economic performance.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Singapore</th>
<th scope="col">Q2 2005</th>
<th scope="col">Q1 2005</th>
<th scope="col">Q2 2004</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real GDP</td>
<td>3.0%</td>
<td>-1.2%</td>
<td>5.2%</td>
<td>8.4%</td>
<td>2.5%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">Private Consumption</td>
<td>2.1%</td>
<td>-0.1%</td>
<td>2.3%</td>
<td>8.6%</td>
<td>1.2%</td>
<td>5.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">GFCF</td>
<td>1.2%</td>
<td>-1.0%</td>
<td>-4.5%</td>
<td>8.5%</td>
<td>-5.5%</td>
<td>-8.5%</td>
</tr>
<tr>
<td class="firstcol">Current Account</td>
<td>S$15.3</td>
<td>S$12.1</td>
<td>S$10.7</td>
<td>S$47.1</td>
<td>S$47.0</td>
<td>S$33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports: Goods (current prices)</td>
<td>9.9%</td>
<td>-6.2%</td>
<td>11.4%</td>
<td>20.8%</td>
<td>12.3%</td>
<td>10.2%</td>
</tr>
<tr>
<td class="firstcol">Imports: Goods (current prices)</td>
<td>8.0%</td>
<td>-3.7%</td>
<td>9.8%</td>
<td>23.7%</td>
<td>7.9%</td>
<td>7.0%</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809f.jpg" width="353">
Germany released preliminary June data on the balance of payments and data on the trade in goods. The preliminary balance of payments data for June are: the total current account, the balance on goods, supplementary trade items, the balance on services, the balance on factor income and current transfers. These items are available only on seasonally unadjusted basis. No June data on the financial account are yet available. While June exports and imports of goods are not shown in the preliminary balance of payments, they are included in the report on trade in goods where they are shown on a seasonally adjusted and unadjusted basis.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809e.jpg" width="353">
The current account surplus on a seasonally unadjusted basis increased 2.3 billion euros to 10,4 billion euros in June 2005 from 8.1 billion in June 2004. Since late 2001, Germany has had a positive balance on current account. Typically, a large positive balance on trade in goods outweighs negative balances on services and factor incomes and supplementary trade items and transfer payments that also result in an outflow of funds. This pattern has changed slightly as the factor income balance became positive in 2004. The balance turned negative in April and May of this year but has become positive again in June. The balance on factor income is the difference between receipts of investment income and wages from foreign countries and German payments of these factors to foreign countries. The first chart shows the factor income balance together with the balance on goods. The shift to a positive balance on factor income in 2004 may be due in part to the increase in Germany&#39;s direct investment abroad.
The seasonally adjusted data show a trade in goods balance of 14.79 billion euros an increase of 2.63 billion euros from a year ago. While exports declined 0.4% from May, they were over 8% above June, 2004. Imports were down sharply in June--5.5%--but they were 6,3% above June 2004. The second chart shows exports and imports on a seasonally adjusted basis.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://http://www.haverselect.com/dlx/GERMANY/@D7/@D7.HTM">Germany</a> Balance of&nbsp; Payments and Trade in Goods (Billions of Euros)</th>
<th scope="col">Jun 05</th>
<th scope="col">May 05</th>
<th scope="col">Jun 04</th>
<th scope="col">M/M Dif </th>
<th scope="col">Y/Y Dif</th>
<th scope="col">2004 Mo.&nbsp; Avg</th>
<th scope="col">2003 Mo.&nbsp; Avg</th>
<th scope="col">2002 Mo. Avg</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Not Seasonally Adjusted</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Current Account</td>
<td>10.4</td>
<td>5.5</td>
<td>8.1</td>
<td>4.9</td>
<td>2.3</td>
<td>7.0</td>
<td>3.9</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance on Goods</td>
<td>16.8</td>
<td>12.1</td>
<td>14.6</td>
<td>4.7</td>
<td>2.2</td>
<td>13.0</td>
<td>10.8</td>
<td>11.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Exports</td>
<td>68.8</td>
<td>63.5</td>
<td>62.6</td>
<td>5.3</td>
<td>6.2</td>
<td>60.9</td>
<td>55.3</td>
<td>54.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports</td>
<td>51.9</td>
<td>51.5</td>
<td>48.0</td>
<td>-0.4</td>
<td>2.9</td>
<td>48.0</td>
<td>44.6</td>
<td>43.2</td>
</tr>
<tr>
<td class="firstcol">Supplementary Trade Items</td>
<td>-1.3</td>
<td>-1.0</td>
<td>-1.1</td>
<td>-0.3</td>
<td>-2.0</td>
<td>-1.0</td>
<td>-0.7</td>
<td>-0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance on Services</td>
<td>-2.9</td>
<td>-2.5</td>
<td>-2.3</td>
<td>-0.4</td>
<td>-0.6</td>
<td>-2.6</td>
<td>-2.8</td>
<td>-3.0</td>
</tr>
<tr>
<td class="firstcol">Balance on Factor Income</td>
<td>0.7</td>
<td>-1.0</td>
<td>-0.1</td>
<td>1.7</td>
<td>0.8</td>
<td>6.4</td>
<td>-1.2</td>
<td>-1.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Transfer Payments</td>
<td>-3.0</td>
<td>-2.1</td>
<td>-3.0</td>
<td>-0.9</td>
<td>0.0</td>
<td>-2.4</td>
<td>-2.4</td>
<td>-2.3</td>
</tr>
<tr>
<td class="firstcol">Seasonally Adjusted</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance on Goods</td>
<td>14.79</td>
<td>12.16</td>
<td>12.98</td>
<td>2.63</td>
<td>1.81</td>
<td>12.8&nbsp;</td>
<td>10.9</td>
<td>11.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>M/M % </td>
<td>Y/Y&nbsp; %</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports</td>
<td>64.39</td>
<td>64.63</td>
<td>59.63</td>
<td>-0.37</td>
<td>7.98</td>
<td>60.47</td>
<td>55.57</td>
<td>54.54</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>49.60</td>
<td>52.47</td>
<td>46.65</td>
<td>-5.47</td>
<td>6.32</td>
<td>47.65</td>
<td>44.66</td>
<td>43.85</td>
</tr>
</tbody>
</table>
</body>
</html>

Germany released preliminary June data on the balance of payments and data on the trade in goods. The preliminary balance of payments data for June are: the total current account, the balance on goods, supplementary trade items, the [...]

German Preliminary Balance of Payment and Trade Data for June: The seasonally and not seasonally adjusted

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809d.jpg" width="353">
The Federal Open Market Committee increased the target rate for federal funds an expected 25 basis points to 3.50%. The discount rate also was raised 25 basis points to 4.50%. This latest increase is the tenth since last June.
The decision was unanimous.
Today&#39;s press release from the Fed continued to contain a comment suggesting that rates could be raised again. &quot;The Committee believes that, even after this action, the stance of monetary policy remains accommodative ...&quot;
The statement added that &quot;Aggregate spending, despite high energy prices, appears to have strengthened since late winter, and labor market conditions continue to improve gradually.&quot;
Constantly vigilant, the Committee succinctly stated that &quot;... pressures on inflation have stayed elevated.&quot;
For the complete text of the Fed&#39;s latest press release please click <a href="http://www.federalreserve.gov/boarddocs/press/monetary/2005/20050809/default.htm">here</a>.
Trends in Federal Funds Rate Volatility from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/current_issues/ci11-7.pdf"> here</a>.
Additional Slack in the Economy: The Poor Recovery in Labor Force Participation During This Business Cycle from the Federal Reserve Bank of Boston can be found <a href="http://www.bos.frb.org/economic/ppb/2005/ppb052.pdf"> here</a>.

</body>
</html>

The Federal Open Market Committee increased the target rate for federal funds an expected 25 basis points to 3.50%. The discount rate also was raised 25 basis points to 4.50%. This latest increase is the tenth since last June. The [...]

Fed Funds Rate Increased to 3.50%

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809c.jpg" width="353">
Chain store sales stuttered during the opening week of August according to the International Council of Shopping Centers (ICSC)-UBS survey. The 0.8% w/w decline retraced virtually all of the prior week&#39;s strong gain and left sales just 0.2% ahead of the July average.
During the last ten years there has been a 56% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of non-auto retail sales less gasoline.
The leading indicator of chain store sales from ICSC slid 0.8% (0.0% y/y), the third decline in the last four weeks.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">08/06/05</th>
<th scope="col">07/30/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>458.9</td>
<td>462.8</td>
<td>4.0%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Chain store sales stuttered during the opening week of August according to the International Council of Shopping Centers (ICSC)-UBS survey. The 0.8% w/w decline retraced virtually all of the prior week's strong gain and left sales [...]

Chain Store Sales Stuttered

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809b.jpg" width="353">
Non-farm labor productivity increased 2.2% last quarter and about matched Consensus expectations for a 2.0% rise. Downward revisions to output growth from 2002 to 2004 (mostly due to upwardly revised estimates of inflation) lowered average growth in productivity during the period to 3.7% from 4.2%.
Unit labor costs slowed in 2Q to 1.3% from a 3.6% rate of growth in 1Q. The average rate of growth during the prior three years was revised up to 0.3% from -0.2%. Compensation costs decelerated to 3.5% from 6.9% growth in 1Q and the average during the prior three years was unchanged at a 4.0% rate of growth.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809a.jpg" width="353">
In the factory sector, productivity held steady at 4.1% (4.7% y/y) versus 4.2% growth in 1Q. The average rate of growth during the prior three years was unrevised at 6.0%.
Unit Labor costs in manufacturing rose 2.3% (3.7% y/y) following 2.8% growth in 1Q. The average of the prior three years was lowered to -0.1% from 0.7% mostly due to a much sharper decline during 2004 of 2.9% versus a 0.5% decline estimated earlier.
The implicit price deflator for nonfarm business rose 2.3% (2.3% y/y) and raised the ratio of prices to unit labor costs to the highest level since 3Q04, suggesting higher profit margins. During the last ten years there has been a 59% correlation between the ratio and the y/y growth in operating corporate profits.
Long-Term Yields Fall as Industrial Output Decelerates from the Federal Reserve Bank of Dallas is available <a href="http://www.dallasfed.org/eyi/usecon/archived/0507update.html"> 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/@EC/@EC02/@EC02.HTM">Non-farm Business Sector</a> (SAAR)</th>
<th scope="col">2Q &#39;05</th>
<th scope="col">1Q &#39;05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Output per Hour</td>
<td>2.2%</td>
<td>3.2%</td>
<td>2.3%</td>
<td>3.4%</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr>
<td class="firstcol">Compensation</td>
<td>3.5%</td>
<td>6.9%</td>
<td>6.7%</td>
<td>4.5%</td>
<td>4.0%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>1.3%</td>
<td>3.6%</td>
<td>4.3%</td>
<td>1.1%</td>
<td>0.2%</td>
<td>-0.5%</td>
</tr>
</tbody>
</table>
</body>
</html>

Non-farm labor productivity increased 2.2% last quarter and about matched Consensus expectations for a 2.0% rise. Downward revisions to output growth from 2002 to 2004 (mostly due to upwardly revised estimates of inflation) lowered [...]

2Q U.S. Productivity As-Expected, Revisions Down

<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 align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809d.jpg" width="353">
The Federal Open Market Committee increased the target rate for federal funds an expected 25 basis points to 3.50%. The discount rate also was raised 25 basis points to 4.50%. This latest increase is the tenth since last June.
The decision was unanimous.
Today&#39;s press release from the Fed continued to contain a comment suggesting that rates could be raised again. &quot;The Committee believes that, even after this action, the stance of monetary policy remains accommodative ...&quot;
The statement added that &quot;Aggregate spending, despite high energy prices, appears to have strengthened since late winter, and labor market conditions continue to improve gradually.&quot;
Constantly vigilant, the Committee succinctly stated that &quot;... pressures on inflation have stayed elevated.&quot;
For the complete text of the Fed&#39;s latest press release please click <a href="http://www.federalreserve.gov/boarddocs/press/monetary/2005/20050809/default.htm">here</a>.
Trends in Federal Funds Rate Volatility from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/current_issues/ci11-7.pdf"> here</a>.
Additional Slack in the Economy: The Poor Recovery in Labor Force Participation During This Business Cycle from the Federal Reserve Bank of Boston can be found <a href="http://www.bos.frb.org/economic/ppb/2005/ppb052.pdf"> here</a>.

2Q U.S. Productivity As-Expected, Revisions Down 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 9, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809b.jpg" width="353">
Non-farm labor productivity increased 2.2% last quarter and about matched Consensus expectations for a 2.0% rise. Downward revisions to output growth from 2002 to 2004 (mostly due to upwardly revised estimates of inflation) lowered average growth in productivity during the period to 3.7% from 4.2%.
Unit labor costs slowed in 2Q to 1.3% from a 3.6% rate of growth in 1Q. The average rate of growth during the prior three years was revised up to 0.3% from -0.2%. Compensation costs decelerated to 3.5% from 6.9% growth in 1Q and the average during the prior three years was unchanged at a 4.0% rate of growth.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809a.jpg" width="353">
In the factory sector, productivity held steady at 4.1% (4.7% y/y) versus 4.2% growth in 1Q. The average rate of growth during the prior three years was unrevised at 6.0%.
Unit Labor costs in manufacturing rose 2.3% (3.7% y/y) following 2.8% growth in 1Q. The average of the prior three years was lowered to -0.1% from 0.7% mostly due to a much sharper decline during 2004 of 2.9% versus a 0.5% decline estimated earlier.
The implicit price deflator for nonfarm business rose 2.3% (2.3% y/y) and raised the ratio of prices to unit labor costs to the highest level since 3Q04, suggesting higher profit margins. During the last ten years there has been a 59% correlation between the ratio and the y/y growth in operating corporate profits.
Long-Term Yields Fall as Industrial Output Decelerates from the Federal Reserve Bank of Dallas is available <a href="http://www.dallasfed.org/eyi/usecon/archived/0507update.html"> 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/@EC/@EC02/@EC02.HTM">Non-farm Business Sector</a> (SAAR)</th>
<th scope="col">2Q &#39;05</th>
<th scope="col">1Q &#39;05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Output per Hour</td>
<td>2.2%</td>
<td>3.2%</td>
<td>2.3%</td>
<td>3.4%</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr>
<td class="firstcol">Compensation</td>
<td>3.5%</td>
<td>6.9%</td>
<td>6.7%</td>
<td>4.5%</td>
<td>4.0%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unit Labor Costs</td>
<td>1.3%</td>
<td>3.6%</td>
<td>4.3%</td>
<td>1.1%</td>
<td>0.2%</td>
<td>-0.5%</td>
</tr>
</tbody>
</table>
Chain Store Sales Stuttered 
by <a href="/comment/Moeller.html">Tom Moeller</a> August 9, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809c.jpg" width="353">
Chain store sales stuttered during the opening week of August according to the International Council of Shopping Centers (ICSC)-UBS survey. The 0.8% w/w decline retraced virtually all of the prior week&#39;s strong gain and left sales just 0.2% ahead of the July average.
During the last ten years there has been a 56% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of non-auto retail sales less gasoline.
The leading indicator of chain store sales from ICSC slid 0.8% (0.0% y/y), the third decline in the last four weeks.
The ICSC-UBS retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

<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/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">08/06/05</th>
<th scope="col">07/30/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>458.9</td>
<td>462.8</td>
<td>4.0%</td>
<td>4.6%</td>
<td>2.9%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
German Preliminary Balance of Payment and Trade Data for June: The seasonally and not seasonally adjusted 
by <a href="/comment/Curley.html">Louise Curley</a> August 9, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809f.jpg" width="353">
Germany released preliminary June data on the balance of payments and data on the trade in goods. The preliminary balance of payments data for June are: the total current account, the balance on goods, supplementary trade items, the balance on services, the balance on factor income and current transfers. These items are available only on seasonally unadjusted basis. No June data on the financial account are yet available. While June exports and imports of goods are not shown in the preliminary balance of payments, they are included in the report on trade in goods where they are shown on a seasonally adjusted and unadjusted basis.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050809e.jpg" width="353">
The current account surplus on a seasonally unadjusted basis increased 2.3 billion euros to 10,4 billion euros in June 2005 from 8.1 billion in June 2004. Since late 2001, Germany has had a positive balance on current account. Typically, a large positive balance on trade in goods outweighs negative balances on services and factor incomes and supplementary trade items and transfer payments that also result in an outflow of funds. This pattern has changed slightly as the factor income balance became positive in 2004. The balance turned negative in April and May of this year but has become positive again in June. The balance on factor income is the difference between receipts of investment income and wages from foreign countries and German payments of these factors to foreign countries. The first chart shows the factor income balance together with the balance on goods. The shift to a positive balance on factor income in 2004 may be due in part to the increase in Germany&#39;s direct investment abroad.
The seasonally adjusted data show a trade in goods balance of 14.79 billion euros an increase of 2.63 billion euros from a year ago. While exports declined 0.4% from May, they were over 8% above June, 2004. Imports were down sharply in June--5.5%--but they were 6,3% above June 2004. The second chart shows exports and imports on a seasonally adjusted basis.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://http://www.haverselect.com/dlx/GERMANY/@D7/@D7.HTM">Germany</a> Balance of&nbsp; Payments and Trade in Goods (Billions of Euros)</th>
<th scope="col">Jun 05</th>
<th scope="col">May 05</th>
<th scope="col">Jun 04</th>
<th scope="col">M/M Dif </th>
<th scope="col">Y/Y Dif</th>
<th scope="col">2004 Mo.&nbsp; Avg</th>
<th scope="col">2003 Mo.&nbsp; Avg</th>
<th scope="col">2002 Mo. Avg</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Not Seasonally Adjusted</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Current Account</td>
<td>10.4</td>
<td>5.5</td>
<td>8.1</td>
<td>4.9</td>
<td>2.3</td>
<td>7.0</td>
<td>3.9</td>
<td>4.0</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance on Goods</td>
<td>16.8</td>
<td>12.1</td>
<td>14.6</td>
<td>4.7</td>
<td>2.2</td>
<td>13.0</td>
<td>10.8</td>
<td>11.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Exports</td>
<td>68.8</td>
<td>63.5</td>
<td>62.6</td>
<td>5.3</td>
<td>6.2</td>
<td>60.9</td>
<td>55.3</td>
<td>54.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Imports</td>
<td>51.9</td>
<td>51.5</td>
<td>48.0</td>
<td>-0.4</td>
<td>2.9</td>
<td>48.0</td>
<td>44.6</td>
<td>43.2</td>
</tr>
<tr>
<td class="firstcol">Supplementary Trade Items</td>
<td>-1.3</td>
<td>-1.0</td>
<td>-1.1</td>
<td>-0.3</td>
<td>-2.0</td>
<td>-1.0</td>
<td>-0.7</td>
<td>-0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance on Services</td>
<td>-2.9</td>
<td>-2.5</td>
<td>-2.3</td>
<td>-0.4</td>
<td>-0.6</td>
<td>-2.6</td>
<td>-2.8</td>
<td>-3.0</td>
</tr>
<tr>
<td class="firstcol">Balance on Factor Income</td>
<td>0.7</td>
<td>-1.0</td>
<td>-0.1</td>
<td>1.7</td>
<td>0.8</td>
<td>6.4</td>
<td>-1.2</td>
<td>-1.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Transfer Payments</td>
<td>-3.0</td>
<td>-2.1</td>
<td>-3.0</td>
<td>-0.9</td>
<td>0.0</td>
<td>-2.4</td>
<td>-2.4</td>
<td>-2.3</td>
</tr>
<tr>
<td class="firstcol">Seasonally Adjusted</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Balance on Goods</td>
<td>14.79</td>
<td>12.16</td>
<td>12.98</td>
<td>2.63</td>
<td>1.81</td>
<td>12.8&nbsp;</td>
<td>10.9</td>
<td>11.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>M/M % </td>
<td>Y/Y&nbsp; %</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports</td>
<td>64.39</td>
<td>64.63</td>
<td>59.63</td>
<td>-0.37</td>
<td>7.98</td>
<td>60.47</td>
<td>55.57</td>
<td>54.54</td>
</tr>
<tr>
<td class="firstcol">Imports</td>
<td>49.60</td>
<td>52.47</td>
<td>46.65</td>
<td>-5.47</td>
<td>6.32</td>
<td>47.65</td>
<td>44.66</td>
<td>43.85</td>
</tr>
</tbody>
</table>
</body>
</html>

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

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

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

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


Privacy Policy

Disclaimer

Contact us

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

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

250820A5.jpg

250820B5.jpg

Mortgage applications fell 1.4% (+22.7% y/y) in the week ending August 15 after rising 10.9% in the prior week, according to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey. Applications for purchase loans edged 0.1% higher (22.7% y/y) last week, following a 1.4% gain in the prior week. Applications to refinance a home loan fell 3.1% (+22.8% y/y) last week, following a 23.0% rise in the week of August 8.

The effective interest rate on a 30-year fixed-rate loan held steady at 6.86% in the week ending August 15 after falling from 6.94% in the first week of August. It was the lowest rate since the first week of March, down from a high of 7.28% in the second week of January. The rate on 15-year fixed-rate mortgages rose to 6.13% in the latest week from 6.09% in the week of August 8. Conversely, the rate on 30-year Jumbo loans decreased to 6.82% last week from 6.86% one week earlier. The rate on a 5-year ARM rose to 6.24% in the week of August 15 and reversed the prior week’s decline to 6.05%.

The share of applications for refinancing an existing loan eased to 46.1% of total applications in the week ending August 15 after rising to 46.5% in the prior week. The share hit a low of 34.6% in the fourth week of May. The adjustable-rate mortgage (ARM) share of activity declined to 8.60% in the latest week after rising to 9.60% in the week of August 8.

The average size of a mortgage loan fell 2.7% (+4.1% y/y) to $387,800 in the week of August 15, following a 4.5% rise in the prior week. The average size of a purchase loan edged 0.5% higher (0.6% y/y) to $429,000 in the latest week after falling 1.2% in the week ending August 8. The average size of a loan to refinance a mortgage fell 7.3% (+9.5% y/y) to $339,800 last week, after rising 18.3% to $366,400 in the prior week. It was increased from $277,900 in the last week of May.

The Mortgage Bankers Association Survey covers 75% of all U.S. retail residential mortgage applications and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. The base period and value for all indexes is March 16, 1990=100. The figures for weekly mortgage applications and interest rates are available in Haver’s **SURVEYS** database.

**Tracking Labor Market Stress** from the Federal Reserve Bank of San Francisco is available [here](https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/08/tracking-labor-market-stress/).

- Purchase applications edge higher while loan refinancing declines.
- Effective fixed-interest rate on 30-year loans remains at four-month low.
- Average loan size declines.

U.S. Mortgage Applications Decline Last Week as Interest Rates Steady

250819F1.jpg

250819G1.jpg

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

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

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

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

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

250819H1.jpg

250819I1.jpg

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

U.S. Housing Starts Strengthen Unexpectedly in July

Winnie Tapasanun

250819A35.jpg

250819B35.jpg

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

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

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

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

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

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

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

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

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

250819C20.jpg

250819D20.jpg

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

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

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

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

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

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

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

U.S. Energy Prices Are Mixed in Latest Week

Tian Yong Woon

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

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

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

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

250819T1.jpg

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

250819T2.jpg

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

250819T3.jpg

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

250819T4.jpg

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

250819T5.jpg

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

Economy in Brief: August 2005

Jump to:

Singapore GDP Growth Moderately High at 3% in Q2, But Area Sees Erratic Moves, Possibly Tied to Oil

Mortgage Applications Down With Less Refinancing

Mortgage Applications Down With Less Refinancing

German Preliminary Balance of Payment and Trade Data for June: The seasonally and not seasonally adjusted

Fed Funds Rate Increased to 3.50%

Chain Store Sales Stuttered

2Q U.S. Productivity As-Expected, Revisions Down

Fed Funds Rate Increased to 3.50%