- Sales rise to highest level in six months.
- Changes in sales are mixed across the country.
- Median sales price falls to four-month low.
USA| Apr 23 2025
U.S. New Home Sales Improve in March; Prices Weaken
by:Tom Moeller
|in:Economy in Brief
More Commentaries
Global| Apr 17 2025Charts of the Week: From Blue to Red
U.S. policy decisions have sparked a sharp rise in financial market volatility in recent weeks, reflecting mounting investor unease about the global economic outlook. Consensus forecasts for growth in 2025 have been revised down significantly, while inflation expectations—particularly in the US—have moved higher, highlighting the stagflationary risks associated with the sweeping tariff measures introduced in early April (Charts 1 and 2). Although these actions have since been partially rolled back, the broader shift toward protectionism is already disrupting global trade flows and could soon feed through to consumer prices, compounding the challenge for central banks already struggling with sticky inflation. In parallel, measures of financial market stress have climbed to multi-month highs as investors reassess risks in an increasingly fragmented and uncertain environment (Chart 3). Business sentiment has also deteriorated notably, with this week’s Empire State Manufacturing Survey showing a collapse in forward-looking expectations (Chart 4). Adding to concerns, global shipping costs have begun to rise again, raising the risk that renewed supply chain frictions will put upward pressure on goods inflation across advanced economies (Chart 5). Finally, in China, hopes for stabilization in the property sector are fading. Despite some recent stabilisation in house prices, real estate investment continues to contract sharply, suggesting that structural headwinds remain firmly in place (Chart 6). Taken together, this week’s charts point to a fragile global economy contending with greater protectionism, rising inflation risks, weakening business confidence, and subdued demand—all of which are reinforcing the ongoing malaise in investment sentiment.
by:Andrew Cates
|in:Economy in Brief
- Single-family starts plunge; multi-family weakens as well.
- Starts decline in West & South.
- Permits rise modestly after several months of decline.
by:Tom Moeller
|in:Economy in Brief
USA| Apr 17 2025U.S. Philly Fed Manufacturing Index Plunged in April
- The headline index plunged to -26.4 in April from 12.5 in March.
- This is the lowest reading since April 2023.
- Both shipments and orders fell markedly.
- Prices paid rose further while employment indicators fell markedly.
- In contrast, after having fallen significantly since January, expectations six months ahead edged up in April.
by:Sandy Batten
|in:Economy in Brief
- Initial claims come in much lower than forecast.
- Continuing claims rise modestly.
- Insured unemployment rate is unchanged.
by:Tom Moeller
|in:Economy in Brief
Germany| Apr 17 2025German PPI Dives But Core Rate Advances
Germany’s PPI in March fell by 0.7%; this is for the headline series excluding construction. The quasi-core PPI, excluding energy, rose by 0.2% in March. The headline series shows a number of months with the inflation rate negative, that is, with the price level falling, while the PPI excluding energy its flat in January with a 0.2% increase in February and in March. The stellar performance of the headline owes to weakness in oil prices.
Progressive inflation calculations on the PPI headline shows a decline of 0.2% over 12 months, a decline at a 0.9% annual rate over six months and a decline at a 4.9% annual rate over three months. These are progressively improving inflation dynamics; in fact, inflation that might be alarmingly weak under other circumstances. However, the PPI excluding energy is up by 1.5% over 12 months, up at a 1.2% annual rate over six months and up at a 1.4% annual rate over three months. These are clearly moderate increases in inflation and the quasi-core rate for the PPI has clearly stabilized.
In the first quarter, the German PPI inflation rate is falling at a 2.1% annual rate as the PPI excluding energy is rising at a 1.1% annual rate.
PPI components are not seasonally adjusted and are a little bit less interesting because of that. But the patterns for consumer goods, investment goods, and intermediate goods in the PPI show that all of them have stronger three-month annualized growth rates than 12-month growth rates, the opposite signal that we get from the headline which is seasonally adjusted.
Of course, monetary policy focuses much more on CPI prices than PPI prices; on that basis, the German CPI is up 2.2% year-over-year compared to a CPI ex-energy that's up at a 2.7% annual rate. Inflation presented on a CPI basis is much hotter than it is on a PPI basis and that's not surprising because the PPI is focused on the goods sector and production in Germany while the services sector has a much higher inflation rate and an inflation rate that tends to be more stubborn to change.
The table also chronicles the impact of Brent oil where prices fell by 3.5% in March after falling 3.8% in February. Over three months Brent is falling at a 4.6% annual rate which is a stronger decline than a 1.3% annual rate drop over six months, but year-over-year the Brent price is still down by 14.6%, and that larger, longer-lasting decline is probably still working its way through the pipeline into German prices.
USA| Apr 16 2025U.S. Retail Sales Surge in March
- Nonauto sales rise moderately.
- Motor vehicle & building materials drive sales overall.
- Gasoline sales decline despite higher prices.
by:Tom Moeller
|in:Economy in Brief
- March IP -0.3% (+1.3% y/y), led by a 5.8% m/m drop in utilities output.
- Mfg. IP +0.3%, reflecting m/m rises of 1.8% in aerospace & misc. transp. equipt. and 1.2% in auto production (w/ durable goods up 0.6% and nondurable goods unchanged).
- Mining activity rises 0.6%, the third m/m gain in four months.
- Key categories in market groups post mixed results.
- Capacity utilization down 0.4%pt. to 77.8%; mfg. capacity utilization up 0.2%pt. to 77.3%, the highest since May ’24.
USA| Apr 16 2025U.S. Home Builder Index Improves in April
- Small increase follows two months of decline.
- Regional performance varies.
by:Tom Moeller
|in:Economy in Brief
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