Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050207d.jpg" width="353">
Chile&#39;s monthly seasonally unadjusted economic indicator, IMACEC (Indicator Mensual de Activeda Economica)was 134.2 (1996=100) in December, 7.70% above December, 2003. On a quarterly basis the fourth quarter value of the indicator was 133.1 or 6.83% above the fourth quarter of 2003.
The seasonally unadjusted monthly indicator is an excellent indicator of monthly values of the seasonally unadjusted real gross domestic product. As the first chart and the following table show, the year over year change in real GDP is equal to the year over year change in the monthly indicator, aggregated on a quarterly basis. The two series are perfectly correlated. As a result, we are safe to assume that Chile&#39;s real economy grew 6.83% in the fourth quarter from the fourth quarter of 2003 and will show a 5.89% growth for the year 2004, up from 3.27% in 2003 and 2.21% in 2002.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050207e.jpg" width="353">
The acceleration in Chile&#39;s growth has been due in large part to the rising demand for copper, which has led to increased employment and incomes within the mining industry and through secondary effects stimulated the general economy. The second chart shows the growth in the mining industry and in manufacturing.

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<tr>
<th scope="col" class="firstcol">Chile</th>
<th scope="col">Dec 05</th>
<th scope="col">Nov&nbsp;04</th>
<th scope="col">Dec 04</th>
<th scope="col">M/M %</th>
<th scope="col">Y/Y &nbsp;%</th>
<th scope="col">&nbsp;2004&nbsp; %&nbsp;</th>
<th scope="col">&nbsp;2003 %</th>
<th scope="col">&nbsp; 2002 %&nbsp; &nbsp;</th>
<th scope="col">2001 %&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Economic Indicator&nbsp; (NSA 1996=100)</td>
<td>&nbsp;134.2</td>
<td>132.5</td>
<td>124.6</td>
<td>1.30</td>
<td>7.70</td>
<td>5.89</td>
<td>3.27</td>
<td>2.21</td>
<td>3.39</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</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>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Q4 04</td>
<td>Q3 04</td>
<td>Q2 04</td>
<td>Q1 04</td>
<td>&nbsp;</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
<td>2001</td>
</tr>
<tr>
<td class="firstcol">Economic Indicator&nbsp;&nbsp; &nbsp;(NSA 1996=100)</td>
<td>&nbsp;133.1</td>
<td>130.9</td>
<td>132.7</td>
<td>130.8</td>
<td>&nbsp;</td>
<td>131.9</td>
<td>124.5</td>
<td>120.6</td>
<td>118.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Y/Y Percent Change</td>
<td>&nbsp;6.83</td>
<td>6.84</td>
<td>5.26</td>
<td>4.65</td>
<td>&nbsp;</td>
<td>5.89</td>
<td>3.27</td>
<td>2.21</td>
<td>3.39</td>
</tr>
<tr>
<td class="firstcol">Real GDP &nbsp;(NSA Billions 1996 Pesos)</td>
<td>&nbsp;</td>
<td>10.231</td>
<td>10.359</td>
<td>10.217</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>38.900</td>
<td>37.670</td>
<td>36.855</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Y/Y Percent Change</td>
<td>&nbsp;</td>
<td>6.84</td>
<td>5.26</td>
<td>4.65</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>3.27&nbsp;</td>
<td>2.21</td>
<td>3.32</td>
</tr>
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Chile's monthly seasonally unadjusted economic indicator, IMACEC (Indicator Mensual de Activeda Economica)was 134.2 (1996=100) in December, 7.70% above December, 2003. On a quarterly basis the fourth quarter value of the indicator was [...]

Chile's Monthly Economic Indicator Predicts 5.9% Growth in GDP in 2004

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Tom Moeller

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Sales of existing homes increased 2.2% (9.3% y/y) to 4.24 million (SAAR) during December after rising an unrevised 4.8% to 4.15 million in November. Sales increased 3.4% during October but fell 1.3% in September. The December sales increase accompanied an easing last month in the effective 30-year mortgage interest rate to an average 6.72% from 6.81% in November. The Action Economics Forecast Survey expected December sales of 4.17 million units. The sales figures are based on closings of sales signed over the past couple of months.

The median price of all existing homes (NSA) held steady (+6.1% y/y) in December at $404,400, with November, revised from $406,100. Prices remained below the $426,900 high this past June. The median price of an existing single-family home also was unchanged (+6.1% y/y) at $409,300 in December. The median price of condos and co-ops edged 0.2% higher (4.5% y/y) to $359,000 in December from $358,200 in November.

By region, sales of existing homes in the Northeast rose 3.9% (10.4% y/y) to 530,000 after an 8.5% November gain. Sales in the South increased 3.2% (9.0% y/y) to 1.93 million after a 5.6% November rise. Sales in the West improved 2.6% (12.9% y/y) to 790,000 after holding steady in November. To the downside, sales in the Midwest eased 1.0% (+6.5% y/y) to 990,000 after a 5.3% November increase.

The number of existing homes for sale (NSA) fell 13.5% (+16.2% y/y) to 1.15 million after falling 2.9% in November. The supply of homes on the market at the current selling rate (NSA) fell to 3.3 months from 3.8 months in November. This figure rose to a high of 4.3 months in September. The record low in supply of 1.6 months was reached in January 2022. These figures date back to January 1999.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

**How Did U.S. Teenagers Benefit from Holiday Employment?** from the Federal Reserve Bank of St. Louis is available [here](https://www.stlouisfed.org/on-the-economy/2025/jan/how-us-teenagers-benefit-holiday-employment).

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- Sales increase to highest level since February.
- Existing home sales rise in three of four regions of the country.
- Median price holds steady.

U.S. Existing Homes Sales Continue to Rise in December

Robert Brusca

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The S&P composite PMIs in January improved across the board, with the exception of India and the United States. In the U.S., the PMI headline dropped back sharply on sharp weakness in the services sector in the month in the face of what had been resiliency and strength. 

From roughly February to July of 2024, the persistence of declines by sector especially in manufacturing diminished. However, now things have shifted, and we are again in a period when there seems to be more deterioration. The prevalence of manufacturing AND service sector deterioration together has reappeared.

The Russian invasion was a real catalyst of change for the EU, Germany, France, the United Kingdom, Japan, and the United States. Before Ukraine, the recovery from COVID was under way and both services and manufacturing sectors were running policies that left each sector with 50% or higher ranking in 60% to 100% of countries. After Russia’s aggressive action, both sectors were crushed across all these countries; the service sector rebounded first and from March 2024 to date services stood at a ranking above 50% or more in 60% to 100% of the countries. But in the post-invasion environment, the manufacturing sectors showed only about 20% of reporters above a 50% queue standing for manufacturing. Manufacturing continues to be hard hit and well short of normalcy.

Currently we are in another round of weakness looking at a broader group of early reporters that adds India and Australia into the mix. Still, six-month changes show weakness in at least two of three months or three of five months for manufacturing and service sectors. Together they are falling over the same six-months. The ‘best performance’ on this metric apart from the U.S. is Australia where manufacturing has improved on balance over six months for two months running but only after three months of deterioration on that basis.

U.S. performance is an outlier in several ways. The US service sector fell sharply in January, depressing services as well as the composite metric. But over six-months both US services and manufacturing have failed to worsen together for 16-months in a row.

The U.S. has been an anomaly in terms of international performance characteristics. U.S. manufacturing is weakening on balance over six months in six of the last seven months. But the service sector has risen on balance (over the previous six months) in 12 of the last 13 months.

The new sharp weakness in U.S. services (month-to-month) is an issue of it has any staying power.

The four-year queue standing of the manufacturing across eight countries and three sector readings (for each: two sectors plus a composite) shows only five of 24 of these rankings with standings above the 50% mark (above their respective medians) over the past four years. These readings are manufacturing in India (79.6%), services in Germany (63.3%) and services in the EMU (barely…. at 51.0%), and a 59.2 percentile standing for Japan’s service sector (the same for its composite).

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There is still a general trend of composite PMI readings to ease over three months compared to 12-months and generally to be in an easing profile. The U.S. is the only country showing composite progress accelerating sequentially (warning here: the sequential data lag by a month and are only executed on hard data so the sharp January U.S. weakness is not represented in this calculation).

Only eight of 24 sectors show a net rise over the last three months. Ten of 24 sectors still show net weakness over 12 months. Three composite readings are lower on balance over 12 months (India Japan, and the U.K.). Economic conditions are touch and go and, as we saw in Davos, there is some concern about the state of the European economy at a time that the U.S. is threatening to impose tariffs that will weaken their economies.

Composite PMIs Improve Except for U.S.

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Initial claims for unemployment insurance rose to 223,000 in the third week of January from an unrevised 217,000 during the prior week. A 215,000 increase in initial claims had been expected in the Action Economics Forecast Survey. Initial claims have risen from a 203,000 low in the first week of January. During the last four weeks, initial claims averaged 213,500, down from 226,750 four weeks earlier.

Continuing claims for jobless insurance increased 46,000 (7.8% y/y) to 1.899 million in the week ended January 11 from 1.853 million in the prior week. Ongoing claims have risen from a low of 1.834 million in the third week of December. The four week moving average of continuing jobless insurance claims eased to 1.866 million, down from a 1.888 million high in the third week of November.

The insured rate of unemployment was 1.2% for the fourth straight week. This level was increased from a 2022 low of 0.9% and compares to the rise in the overall unemployment rate to 4.1% from 3.4% over the same period.

Unemployment rates vary widely across states. The Labor Department reports that for the week ended January 4, the insured unemployment rate was highest in Rhode Island (3.22%), New Jersey (3.07%), Minnesota (2.73%), Washington (2.52%) and Massachusetts (2.41%). The insured unemployment rates were lowest in Florida (0.33%), Virginia (0.43%), Tennessee (0.58%) and Alabama (0.52%) and the Virgin Islands (0.67%). Rates in other notable states include California (2.32%), Pennsylvania (2.24%), New York (2.08%) and Texas (1.13%). These state rates are not seasonally adjusted.

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

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- Initial jobless claims increase to highest level in six weeks. 
- Continuing claims approach four-week high.
- The insured unemployment rate remains low.

U.S. Unemployment Insurance Claims Rise in Latest Week

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EU order trends ‘improved’ slightly in January as the net diffusion reading rose from -40 to -34. Still, that improvement leaves orders below their 3-month, 6-month, or 12-month averages. The queue standard of January orders is in the lower 14th percentile of its historic queue of data. Obviously, it remains a historically weak reading. The order series is volatile as the chart shows. But it is still in a clear downtrend even with the uptick this month.

Export orders have approximately the same profile as for orders overall. But export orders weaken slightly in January compared to December. Export orders overall have a slightly weaker queue standing than total orders at a 13.4 percentile level.

The diffusion readings for stocks of finished goods weakened in January but even with its weaker January assessment, stocks have a firm-to-strong 72.5 percentile standing.

Looking ahead, the outlook for output volume over the next three months improved sharply from its stunning weak reading of -31 in December. However, the rise to -19 in January represents only a 4.8 percentile standing.

Unfortunately, average output prices for three months ahead has reading of +27 in January, up from +23 in December and +11 in November; the backtracking in prices expected, has brought the expectation level for the current reading to a high, 90-percentile standing. These rising inflation expectations are going to be a real problem for the Bank of England.

IP data lag the CBI survey responses. The manufacturing IP growth rate, year-on-year, has a 17.4 percentile standing as of its most recent observation in November 2024. That is also very weak. The CBI results are not giving a different message from the industrial production data, but they are timelier.

The ramp up in inflation expectation is not good new with CPI-H inflation at 3.5% year-over-year and with the core pace at 4.2%. Core inflation, sequentially, is looking stable around the 4.2% pace; for the headline, the pace has accelerated from 3.5% over 12 months to a pace of 5.4% over three months. These results, coupled with the rise in CBI expectations, are not good news for the U.K. or for the BOE.

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United Kingdom

U.K. Order Trends Are Still Eroding