Tom Moeller

240117V20.jpg

240117W20.jpg

Consumer spending continues to rise as employment & income improve. Retail sales increased 0.6% during December following an unrevised 0.3% November gain and a 0.3% October fall, revised from -0.2%. A 0.4% rise had been expected in the Action Economics Forecast Survey. During all of last year, retail sales rose 5.6% after increasing 5.8% in 2022. Retail sales excluding motor vehicles & parts improved 0.4% last month after increasing an unrevised 0.2% in November and easing 0.1% in October. A 0.2% rise in December sales had been expected. During all of last year, nonauto retail sales rose 4.5% following a 7.1% gain in 2022.

Showing greater improvement last month were sales in the retail group, which excludes autos, building materials, gasoline & restaurants. Sales increased 0.8% (5.6% y/y) after a 0.5% November rise, revised from a 0.4% gain. October’s 0.1% uptick was lifted from no change.

Last month’s overall sales increase was paced by a 1.5% strengthening (9.7% y/y) in online sales which followed a 1.2% November increase. Clothing & accessory store sales also increased 1.5% (4.3% y/y) after a 1.0% November improvement. General merchandise store sales rose 1.3% (3.3% y/y) after a 0.2% November slip. Within that group, department store sales surged 3.0% (-2.7% y/y) after three straight months of sharp decline. Motor vehicle & parts sales followed with a 1.1% increase (10.3% y/y) last month after they gained 0.8%. The rise compared to a 4.2% increase in unit motor vehicle sales. Building materials store sales improved 0.4% in December (-2.3% y/y) after easing 0.1%. Sporting goods, hobby shop, book & music store sales rose 0.3% last month (0.9% y/y) after a 1.4% November jump.

Offsetting these gains, furniture & home furnishings store sales fell 1.0% (-4.7% y/y) after rising 2.4% in November. Electronics & appliance store sales eased 0.3% (+10.7% y/y) following a 1.8% November decline. Gasoline service station sales fell 1.3% (-6.6% y/y) with lower prices, the third straight month of sharp decline.

Sales were weak in the nondiscretionary sales categories. Health & personal care store sales declined 1.4% in December (+10.7% y/y), after a 0.2% November easing. Food & beverage store sales edged 0.2% higher (1.3% y/y) for the second consecutive month.

Consumer spending at restaurants & drinking places held steady last month (+11.1% y/y) after rising 1.7% in November.

Retail Sales data can be found in Haver's **USECON** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

240117X20.jpg

240117Y20.jpg

- Strength spans most categories.
- Online buying & clothing store sales log notable gains.
- Gasoline sales fall further with lower prices.

U.S. Retail Sales Strengthen in December; Non-auto Sales Firm

Winnie Tapasanun

240117R9.jpg

240117S9.jpg

Total industrial production ticked up 0.1% m/m (1.0% y/y) in December after being virtually unchanged in November (+0.2% initially) and a 0.8% decline in October (-0.9% previously), according to the Federal Reserve Board. The December IP index at 102.5, the same as in October, was 7.4% above a low of 95.4 in February 2021. A 0.1% m/m easing had been expected in the Action Economics Forecast Survey. IP fell 0.8% q/q in Q4 2023 after a 0.5% q/q rise in Q3 2023, falling at a 3.1% annualized rate following a 1.8% Q3 annualized rate of increase. IP rose 0.2% in 2023, 3.4% in 2022 and 4.4% in 2021.

By **industry groups**, manufacturing production edged up 0.1% (1.2% y/y) in December, the fifth m/m increase in six months, after a downwardly revised 0.2% rise in November (+0.3% initially). Durable goods production fell 0.4% (+1.0% y/y) following a 1.0% November rebound, reflecting output drops of 2.4% (0.0% y/y) in electrical equipment, appliances & components, 1.9% (+0.2% y/y) in wood products, 1.2% (-3.8% y/y) in machinery, 1.2% (-2.3% y/y) in fabricated metal products, 1.0% (+1.6% y/y) in miscellaneous durables goods, 0.5% (-4.7% y/y) in nonmetallic mineral products, and 0.1% (+4.2% y/y) in primary metals. The following durable goods categories, however, rose m/m in December, reflecting output rises of 1.6% (4.8% y/y) in motor vehicles & parts, 1.3% (-6.6% y/y) in furniture & related products, and 0.1% (7.9% y/y) in computer & electronic products. Meanwhile, production for aerospace & miscellaneous transportation equipment held steady (5.4% y/y) in December following two consecutive m/m increases.

Nondurable goods production rose 0.6% (1.7% y/y) in December, the first m/m rise since September, after a 0.5% decline in November, reflecting output increases of 2.2% (8.0% y/y) in petroleum & coal products, 0.8% (-1.1% y/y) in food, beverages & tobacco, 0.7% (-1.1% y/y) in plastics & rubber products, 0.3% (4.8% y/y) in chemicals, and 0.3% (-12.0% y/y) in apparel & leather goods. In contrast, the following nondurable goods categories fell m/m in December, including output drops of 1.3% (+0.4% y/y) in paper and 0.6% (-7.9% y/y) in printing & related support activities. Meanwhile, production for textiles & product mills was unchanged (-3.5% y/y) in December following two successive m/m declines.

Mining activity grew 0.9% (4.3% y/y) in December, the first m/m gain since September, following a downwardly revised 1.0% decline in November (+0.3% initially). In contrast, utilities output slid 1.0% (-4.9% y/y), the fourth consecutive m/m slide, worsening a 0.7% November decrease (-0.4% initially).

By **market groups**, consumer goods output rose 0.2% (-1.0% y/y) in December after a 0.1% rebound in November, reflecting a 0.9% gain (1.6% y/y) in durable consumer goods and no change (-1.7% y/y) in nondurable consumer goods. Materials production moved up 0.1% (2.7% y/y) in December following two successive m/m drops. To the downside, business equipment output fell 0.2% (-0.1% y/y) in December, the third m/m fall in four months, after a 1.0% increase in November. Construction supplies production dipped 0.1% (-1.0% y/y), the seventh m/m decline in eight months, following a 0.6% November drop.

In **special classifications**, factory output of selected high-tech industries advanced 0.9% (18.1% y/y) in December, the 11th straight m/m gain, on top of a 1.7% rise in November. Manufacturing production excluding selected high-tech industries was virtually unchanged (0.8% y/y) following a 0.2% November rebound, while manufacturing production excluding both selected high-tech and motor vehicles & parts slipped 0.1% (+0.5% y/y), the third consecutive m/m decline.

Capacity utilization was unchanged at an expected 78.6% in December (with the November rate revised down from 78.8% initially reported). The December reading was 1.1 percentage points below its long-run (1972–2022) average. Manufacturing capacity utilization held steady at 77.1% (with the November rate revised down from 77.2% initially reported).

Industrial production and capacity are located in Haver's **USECON** database. Additional detail on production and capacity utilization can be found in the **IP** database. The expectations figures come from the **AS1REPNA** database.

240117T9.jpg

240117U9.jpg

- IP +0.1% m/m (+1.0% y/y) in Dec.; downward revision for Nov.
- Mfg. IP inches up 0.1% m/m, w/ durable goods down 0.4% and nondurable goods up 0.6%; motor vehicles production rises 1.6%, the second successive m/m gain.
- Mining activity rebounds vs. two consecutive m/m drops, but utilities output falls for the fourth straight month.
- Performance in key categories in market groups is mixed.
- Capacity utilization holds steady at 78.6%.

U.S. Industrial Production Unexpectedly Increases in December

240117N2.jpg

240117O2.jpg

The Housing Market Index compiled by the National Association of Home Builders/Wells Fargo increased 18.9% in January (25.7% y/y) to 44 following an unrevised 8.8% December increase. These gains followed four consecutive months of decline. Despite the recent improvement, the index remained below its recent peak of 56 in July. Looking back, the index peaked at 90 in November 2020.

The average rate on a 30-year fixed rate mortgage fell to 6.66% last week from a high of 7.79% in the last week of October, according to Freddie Mac.

The NAHB reported that its single-family sales measure rose 17.1% (20.0% y/y) to 48 following a 2.5% December rise. These increases followed four straight months of decline. The reading of prospective sales in six months rose 26.7% (54.1% y/y) to 57, its highest level in six months. The traffic of prospective buyers index increased 20.8% (26.1% y/y) to 29 following a 14.3% increase. This reading remained below the November 2020 high of 77.

Regionally, there was improvement in all but one region of the country. In the West, the index rose 31.0% both m/m and y/y to 38 following a 3.6% December gain. The index was below its high of 54 six months earlier. The index for the South increased 25.6% both m/m and y/y to 49 after rising 11.4% during December. In the Northeast, the index rose 1.8% (64.7% y/y) to 56 following a 3.8% December rise. In the Midwest, the index held steady at 35 but rose 9.4% y/y. It remained below its high of 85 in November 2020.

The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. The regional indexes run back to December 2004.

These data are included in Haver's **SURVEYS** database.

240117P2.jpg

240117Q2.jpg

- Increase extends prior month’s gain.
- Prospective buyer traffic is strong.
- Regional changes are mixed.

U.S. Home Builders Sentiment Strengthens in January as Mortgage Rates Fall

Sandy Batten

240117J5.jpg

240117K5.jpg

Import prices for all goods were unchanged m/m (-1.6% y/y) in December following a downwardly revised 0.5% m/m decline in November (previously -0.4% m/m), according to the Bureau of Labor Statistics. Export prices fell 0.9% m/m (-3.2% y/y), the same monthly decrease as in November. The Action Economics Forecast Survey had looked for a 0.5% monthly decline in import prices and a 0.7% m/m decrease in export prices.

Prices for imported fuel and lubricants declined 0.3% m/m in December following decreases of 6.5% in November and 3.6% in October. Lower petroleum prices in December more than offset higher natural gas prices. Imported fuel and lubricant prices fell 7.3% from December 2022 to December 2023. Nonfuel import prices were unchanged in December, after ticking up 0.1% m/m in November and declining 0.1% in October. Higher prices in December for nonfuel industrial supplies and materials and automotive vehicles were offset by lower prices for capital goods and foods, feeds, and beverages. The price index for nonfuel imports declined 0.8% for the year ended in December.

The price index for exports decreased 0.9% m/m in December for the third consecutive month. Lower prices for both agricultural (-0.6% m/m) and nonagricultural (-0.9% m/m) exports contributed to the December drop. Export prices fell 3.2% over the past year. Despite the recent declines, the December decrease was the smallest 12-month drop since February 2023. Driven by lower fuel prices, nonagricultural industrial supplies and materials prices declined 2.2% m/m in December, the third consecutive monthly decline. Prices for the major finished goods export categories were mostly up in December. Consumer goods prices rose 0.3% m/m following a 0.2% monthly decline in November. The price index for automotive vehicles advanced 0.2% m/m in December, after a 0.1% decline the previous month. Prices for exported capital goods were unchanged in December following a 0.1% m/m decrease in November.

The import and export price series can be found in Haver’s **USECON** database. Detailed figures are available in the **USINT** database. The expectations figure from the Action Economics Forecast Survey is in the **AS1REPNA** database.

240117L5.jpg

240117M5.jpg

- Imported fuel prices fell 0.3% m/m while nonfuel prices were unchanged.
- For exports, the December decline reflected lower nonag and ag prices.

U.S. Import Prices Were Unchanged in December While Export Prices Fell

240117F2.jpg

240117G2.jpg

Total business inventories slipped 0.1% (+0.4% y/y) in November, the same monthly decline as in October. Inventories were little changed throughout all of 2023. The November decline matched the expectations of the Informa Global Markets Survey.

Manufacturing inventories rose 0.1% m/m (-0.2% y/y) in November after having been unchanged in October. Wholesale inventories fell 0.2% m/m (-3.0% y/y), their eighth monthly decline in the past nine months. Retail inventories, the new information in this report, slipped 0.1% m/m (+5.3% y/y) in November following a 0.04% m/m decline in October.

The small decline in retail inventories in November was relatively widespread. Of the major sectors, only motor vehicle inventories experienced an increase (+1.8% m/m). When those are excluded, the remaining inventories fell 0.9% m/m, the third consecutive monthly decline. Furniture inventories declined 1.7% m/m in November, their ninth consecutive monthly decline. Building material inventories fell 0.7% m/m; food and beverage store inventories dropped 1.1% m/m; clothing inventories decreased 0.7% m/m; general merchandise store inventories edged down 0.2% m/m, their fourth decline in the past five months.

Total business sales increased 0.2% m/m (+1.0% y/y) in November following a 1.1% monthly decline in October. Manufacturing shipments rebounded 0.5% m/m (-0.4% y/y) in November after a 1.3% monthly decline in October. Wholesale sales were essentially unchanged (+0.5% y/y) in November versus a 1.5% m/m fall in October. Retail sales edged up 0.1% m/m (4.8% y/y) in November following a 0.3% monthly decline in October. The November increase was led by higher motor vehicle and clothing sales. In a separate release today, retail sales were reported up 0.6% m/m in December.

With the monthly changes in both sales and inventories being relatively small in November, the inventory/sales (I/S) ratio was unchanged at 1.37 in November. The manufacturing I/S/ ratio was also unchanged at 1.48. The wholesale I/S ratio slipped to 1.34 from 1.35 in October. The retail I/S ratio was unchanged at 1.30 in November, where it has been since last May.

The manufacturing and trade data are in Haver’s **USECON** database. The Informa Global Markets forecast is in the **MMSAMER** database.

240117H2.jpg

240117I2.jpg

- Total inventories declined 0.1% m/m, led by wholesalers.
- Total sales edged up 0.2% m/m.
- Inventory/sales ratio was unchanged in November.

U.S. Business Inventories Slipped in November While Sales Edged Up

Carol Stone, CBE

240117C2.jpg

240117D2.jpg

Retail gasoline prices for all grades edged down to an average of $3.18 per gallon (-6.9%) in the week ended January 15 from $3.20 the week before. The recent high was $4.00 per gallon in the third week of September, and the all-time high was $5.11 in the week ended June 13, 2022. Retail prices for on-highway diesel fuel averaged $3.86 per gallon in the January 15 week (-14.6% y/y), up from $3.83 the week before. These are up modestly from a recent low of $3.77 per gallon in the ended July 3, 2023.

The price of West Texas Intermediate crude oil averaged $71.91 per barrel (-6.7% y/y) in the week ended January 12, down from $72.38 in the prior week. The recent range for this basic petroleum gauge was a low of $69.32 per barrel in the week of June 30, 2023, and a high of $91.45 in the week of September 29, 2023; the all-time high was seen in the week of July 4, 2008, at $142.46 per barrel. Yesterday, January 16, the price of West Texas Intermediate crude oil was $72.40 per barrel. The price of European Brent crude oil rose to $78.37 per barrel (-2.8% y/y) in the week ended January 12 from $76.88 in the January 5 week. The price of Brent has recently ranged from a low of $73.55 in the week ended June 30, 2023, to a high of $127.40 in the week ended June 10, 2022.

Natural gas prices rose to an average of $3.09/mmbtu in the week ended January 12 from $2.68/mmbtu in the January 5 week. The latest week compares to a recent high of $3.20 for the average of the October 13 week and a low of $1.93 in the week of June 2, 2023. Yesterday, the natural gas price touched $3.25/mmbtu, which it has also hit on Tuesday and Wednesday of last week.

Gasoline demand remained firm in the four-week period ended January 5, rising 3.2% from a year ago, up from 2.7% in the four weeks ended December 29. Demand for all petroleum products was up 1.6% in the four weeks ended January 5 after increasing 0.6% in the period ended December 29. Crude oil input to refineries strengthened further in the four weeks ended January 5, advancing 9.3% y/y after a 6.0% increase in the prior four-week period.

Gasoline inventories continued to increase in the January 5 week, rising 8.0% y/y following a 6.4% y/y increase the week before. Stocks of residual fuel oil fell 12.8% y/y in the January 5 week, less than the prior week’s 17.8% y/y decrease. Crude oil inventories, including the Strategic Petroleum Reserve, decreased 2.9% y/y in the January 5 week, following a 1.0% decrease the week before.

Measured in days’ supply, gasoline inventories were 28.7 days in the January 5 week, up from 27.3 days in the December 29 week. The recent high was 29.7 days in the week of January 20, 2023, and the recent low was 23.4 days in the week of June 30, 2023. Crude oil inventories marked 26.1 days of supply in the January 5 week, marginally more than the 26.1 days in the December 29 week; these compare to a recent high of 31.9 days in the week of March 3, 2023, and a recent low of 25.0 days in the week of September 1, 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** databases.

- Average gasoline prices down 2 cents in Jan. 15 week.
- Crude oil prices down 47 cents per barrel.
- Natural gas prices near recent highs.

U.S. Petroleum Prices Edged Down in Latest Week, while Natural Gas Rose

Kathleen Stephansen, CBE

240117A0.jpg

240117B0.jpg

Mortgage applications surged another 10.4% w/w (-12.0% y/y) in the week ended January 12, following the 9.9 % w/w (2.1% y/y) jump in the week ended January 5.  These data come from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.  Applications for loans to purchase a house rose 9.2% (-19.3% y/y) in the week ended January 12, after rising 5.6% (-6.8% y/y) in the week ended January 5.  Applications for refinancing a loan jumped another 10.8% (10.3% y/y) in the latest week, following the 18.8% (30.2% y/y) advance in the prior week.

The share of applications for refinancing an existing loan edged down to 37.5% in the week ended January 12 from the 38.3% share in the week ended January 5. The percentage of applications that were ARMs rose to 5.9% in the latest week from 5.4% in the week ended January 5.

The effective rate on a 30-year fixed-rate loan edged down 4bps to 6.94% in the week ended January 12 from 6.98% in the week ended January 5. The rate on 15-year fixed-rate mortgages dropped 17bps 6.38% in the latest week from 6.55% in the week ended January 5. This is the lowest rate since the 6.33% rate reached in the week ended May 19, 2023. The rate on 30-year Jumbo loan dropped 12bps to 6.99% in the week ended January 12, following the 14bps rise to 7.11% in the week ended January 5. The rate on the 5-year ARM rose 2bps to 6.40% in the latest week, after the 45bps jump to 6.38% in the week of January 5.

The average loan size rose 2.1% w/w (0.7% y/y) to $360,800 in the January 12 week, after a decline of 0.8% w/w (+1.0% y/y) to $353,500 in the January 5 week. The average size of a purchase loan rose 3.0% w/w (3.5% y/y) to $414,900 in the week ended January 12, after the 1.1% w/w (+3.6% y/y) decline to $402,900 in the week ended January 5. The average loan size to refinance a mortgage declined 1.2% w/w (+4.0% y/y) to $270,700 in the week ended January 12, after a rise of 2.5% w/w (4.8% y/y) to $274,100 in the January 5 week.

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.

- Total mortgage applications surged 10.4% in the week ended January 12.
- Applications for loans to purchase and to refinance also posted strong rises.
- The average effective rates on fixed-rate loans dropped in the latest week.

U.S. Mortgage Applications Rose Sharply in the Latest Week

240116J11.jpg

240116K11.jpg

General Business Conditions index declined to -43.7 in January from -14.5 in December. The weakening followed a 24 point December shortfall from +9.1 in November. The figures are produced by the Federal Reserve Bank of New York. For January, a reading of -4.0 had been expected in the Action Economics Forecast Survey. The percentage of respondents reporting an increase in business conditions fell to 10.4% from 17.9% in December and 33.2% in November while the percentage reporting a decrease rose to 54.2% from 32.4% last month and 24.1% in November.

Haver Analytics constructs an ISM-adjusted series, which is comparable to the ISM manufacturing index. The index fell to 39.7 in January from 45.3 in December and 50.4 in November. The index stands at its lowest point since April 2020 and remains below the high of 63.4 in July 2021. A level of 50 is the breakeven point between expansion and contraction.

The new orders index collapsed to -49.4 this month from -11.3 in December. A lessened 12.2% of respondents reported higher orders while an increased 61.5% reported a decline. The shipments index declined to -31.3 after falling to -6.4 in December and remained below a high of 23.9 in April of last year. The inventories index weakened to -7.4 from -5.2 in December. The unfilled orders index eased to -24.2 in January from -24.0 in December. It roughly equaled the lowest reading since December 2013 and was negative for the ninth consecutive month. The inventories reading declined to -7.4 from -5.2 last month, after having increased to 9.1 in November. The average workweek reading of -6.1 this month compared to -2.4 in December.

Working higher, the employment index rose to -6.9 in January from -8.4 in December, but remained well below its recent high of 14.0 in December of 2022. A fairly steady 7.5% of respondents reported increases in employment while a lessened 14.4% reported lower employment. Also rising, the delivery times reading improved to -8.4 this month from -15.6 in December, but remained well below the October 2021 high of 38.0 as delivery times shortened.

Inflation pressures picked up slightly in January. The prices paid index rose to 23.2 from 16.7 but the index remained down from 33.0 one year earlier. It was well below its April 2022 high of 86.4. A lessened twenty-five percent of respondents reported higher prices while a lessened 2.1% reported a decline. The prices received index fell, however, to 9.5 from of 11.5 in December. Its low was 3.9 in July. The index remained down from 28.4 last February. A lessened 11.6% of respondents reported higher prices received this month while a lessened 2.1% reported lower prices.

Indicating that firms are more optimistic about the future, expectations for business conditions in the next six months improved during January after moving higher in December as well. The index for future business conditions rose to 18.8 in January from 12.1 in December. It is up from a July 2022 low of -6.2.  The delivery times and unfilled orders series surged. The employment & hours worked indexes strengthened along with most other readings, including new orders & shipments. Expectations for capital spending also improved as did expected technology spending. The indexes of expected prices paid and received both increased.

The latest survey was conducted between January 3 and January 10. The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components.

The New York Fed survey data are contained in Haver’s **SURVEYS** database. The expectations series is in Haver’s **AS1REPNA** database.

240116L11.jpg

240116M11.jpg

- Reading falls 29 points to lowest level since May 2020.
- Component declines are widespread, though employment & price readings move higher.
- Six-month outlook improves again.

U.S. Empire State Manufacturing Index Collapses in January

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?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

Resilient US economy is pushing up longer-term inflation expectations and interest rates

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. 

New York

London

Singapore

Tokyo

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

Andrew Cates

**The Blue Chip Growth consensus**
Our first chart this week highlights the widespread downward revisions GDP growth forecasts for 2025 across major economies seen in the latest Blue Chip Economic Indicators survey that have been made in recent months. The most significant downward adjustment has been seen in the United States. But export-reliant economies such as South Korea, Canada, and Germany have also seen sharp downgrades, possibly reflecting their exposure to US demand and cross-border industrial linkages. These adjustments underscore growing concerns that escalating protectionism may weigh heavily on global growth prospects.

250417Z1.jpg

**The Blue Chip Inflation Consensus** 
Our second chart highlights a concomitant marked upward revision to CPI inflation forecasts for 2025 for several major economies—most notably for the US and Japan. Together with the first chart above, this illustrates how US tariff policies could not only be dampening global growth but could also be amplifying inflationary pressures—raising the spectre of stagflation and complicating the task for central banks navigating an increasingly fractured economic landscape.

250417Z2.jpg

**Global financial conditions** 
Our next chart shows the ECB Composite Indicators of Stress and specifically an unweighted average for the US, UK, Euro Area, and China. These show a sharp spike in recent weeks reflecting rising investor anxiety about escalating trade tensions. Their rapid uptick is a warning sign of potential spillovers from rising policy and economic uncertainty into credit markets, investor sentiment, and broader financial stability.

250417Z3.jpg

**US business sentiment** 
This week’s US Empire State Manufacturing Survey additionally paints a more concerning picture of the near-term economic outlook. The diffusion index for general business conditions over the next six months ahead has plunged into negative territory—its lowest reading since the early pandemic period. In the meantime, expectations for prices paid have surged, suggesting that firms anticipate significant cost pressures in the months ahead. This divergence points squarely to stagflation risks: a scenario of slowing or contracting economic activity coupled with rising input prices. The recent spike in price expectations likely reflects the anticipated impact of newly enacted US tariffs, which are raising costs for imported components and materials.

250417Z4.jpg

**Supply chain bottlenecks**
Our next chart, showing the Harper Petersen Charter Rate Index, suggests that global shipping costs have started to climb again. This follows a prolonged post-pandemic decline and suggests fresh disruptions or capacity constraints in global freight markets—likely linked to the latest wave of US tariffs and retaliatory trade actions that are altering shipping patterns and congesting key trade routes. Notably, the past strong correlation between HARPEX and goods CPI inflation in advanced economies highlights the potential inflationary pass-through from higher transport costs to consumer prices. Although goods inflation has moderated from its pandemic-era highs, the recent rebound in shipping rates could reignite upward pressure, especially if firms are forced to pass on elevated logistics and import costs.

250417Z5.jpg

**China’s economy** 
Our final chart this week turns to China’s real estate sector, where recent hopes that the market may have finally found a bottom appear to be fading. While the price index for existing residential buildings has shown tentative signs of stabilization, the continued and pronounced contraction in real estate investment—still running at double-digit negative year-on-year rates—points to persistent fragility. Confidence among developers and financial institutions remains deeply impaired, and despite a modest rebound from the lows of early 2024, the latest data suggest that structural challenges—excess supply, tight credit conditions, and cautious homebuyers—are still weighing heavily on the sector. With investment activity still in decline, the prospect of a durable recovery in housing and construction—long a cornerstone of China’s domestic demand—looks increasingly remote.

250417Z6.jpg

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.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/11sLsDIeWaqNiMZhyFqAn1?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: From Blue to Red

250417F1.jpg

250417G1.jpg

Total housing starts weakened 11.4% (+1.9% y/y) in March to 1.324 million units (SAAR) after rising 9.8% in February to 1.494 million units, revised from 1.501 million units, according to the U.S. Census Bureau. The Action Economics Forecast Survey expected 1.418 million starts. Single-family starts declined 14.2% (-9.7% y/y) to 940,000 in March after rising 9.5% to 1.096 million in February. Multi-family starts weakened 3.5% (+48.8% y/y) to 384,000, following a 10.6% February drop. Total starts in March were 27.6% below their peak of 1.828 million units reached in April 2022.

Starts declined in two of the four major regions in March. They fell 30.9% (-8.8% y/y) in the West to 289,000, following an 8.0% February increase. In the South, starts declined 17.1% (-8.1% y/y) to 673,000 after rising 16.5% in February.  Starts in the Midwest increased 76.2% (44.2% y/y) to 222,000 after falling 30.8% in February. In the Northeast, starts improved 1.4% (45.8% y/y) to 140,000 following a 45.3% February increase.

Building permits increased 1.6% (-0.2% y/y) to 1.482 million units in March after three straight months of modest declines. Single-family permits fell 2.0% (-0.6% y/y) in March to 978,000 after edging 0.4% higher in February. Multi-family permits strengthened 9.3% (0.6% y/y). Permits rose 4.3% (-17.1% y/y) in the Northeast and were up 5.8% (-8.5% y/y) in the West. They increased 3.0% (4.5% y/y) in the South. Building permits in the Midwest declined 9.5% (+7.4% 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.

250417H1.jpg

250417I1.jpg

- Single-family starts plunge; multi-family weakens as well.
- Starts decline in West & South.
- Permits rise modestly after several months of decline.

U.S. Housing Starts Decline Sharply in March; Building Permits Edge Higher

250417N2.jpg

250417O2.jpg

Business sentiment in the Philadelphia Federal Reserve district turned decidedly negative in April with the general business conditions index plummeting to -26.4, the lowest reading since April 2023, from 12.5 in March. The Action Economics Forecast Survey looked for a decline to +5.0 in April. The index is a diffusion index centered on zero. So, negative readings indicate that activity is falling. In April, nearly 39% of respondents reported a decrease in activity, up from 18.1% in March, while only 12.5% reported an increase versus 30.6% in March. Survey responses were collected from April 7 to April 14.

The headline index reflects the answer to a single question. Haver Analytics calculates a composite index using the methodology employed in the construction of the national ISM index. That index fell to 43.6 in April, well below the 50 level which separates expansion from contraction, from 50.5 in March. That is, activity fell in April for the first time in four months.

Looking at the components, the new orders index plunged to -34.2, its lowest reading since April 2020, from 8.7 in March. Nearly 45% of respondents reported a decline in orders while only 10.7% reported an increase. The shipments index fell to -9.1 in April, its first negative reading since last September, from 2.0 in March. Employment conditions deteriorated markedly. The employment index fell nearly 20 points to 0.2 from 19.7 in March. The average workweek index plummeted to -12.7, its first negative reading in four months, from 8.7 in March. The pace of delivery times fell for the first time in five months with the index declining to -2.6 in April from 4.1 in March.

The inflation environment remained relatively heated. The prices paid index edged up from 48.3 to 51.0, its highest reading since July 2022. Almost 54% of the firms reported increases in input prices, while 3% reported decreases; 36% reported no change. The current prices received index ticked up almost 1 point to 30.7 from 29.8. Almost 31% of the firms reported increases in the prices of their own goods, none reported decreases, and 64% reported no change.

After having fallen more than 22 points to 5.6 in March, the expectations index edged up to 6.9 in April. This index has fallen markedly over the past six months from 53.9 last November. Nearly 36% of the firms expect an increase in activity over the next six months, exceeding the 29% that expect a decrease; 25% expect no change. The future new orders index increased 4 points to 6.6, and the future shipments index decreased 6 points to 5.0, its lowest reading since June 2024. The future employment index fell 18 points to -0.6, its lowest reading since February 2016. The future prices paid index climbed to 63.1, and the future prices received index jumped 28 points to 67.7, its highest reading since June 2021. The index for future capital expenditures fell 11 points to 2.0. Nearly three-quarters of the firms expect no change in capital spending over the next six months.

The Manufacturing Business Outlook Survey (MBOS), conducted by the Federal Reserve Bank of Philadelphia, is a monthly survey of manufacturers in the Third Federal Reserve District. Participants indicate the direction of change in overall business activity and in the various measures of activity at their plants. The diffusion indexes in the MBOS represent the percentage of respondents indicating an increase minus the percentage indicating a decrease. The series from the survey dating back to May 1968 can be found in Haver's **SURVEYS** database. The expectations forecast figures are from the Action Economics Forecast Survey in **AS1REPNA**.

250417P2.jpg

250417Q2.jpg

- 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.

U.S. Philly Fed Manufacturing Index Plunged in April

250417A4.jpg

250417B4.jpg

Initial claims for unemployment insurance fell to 215,000 in the week ended April 12 from 224,000 in the prior week, revised from 223,000. The decline compared to expectations for little change at 226,000 in the Action Economics Forecast Survey. These figures are seasonally adjusted. The four-week moving average fell to 220,750 from 223,250, down from a high of 238,500 in the third week of October.

The total number of unemployment insurance beneficiaries – also known as continuing claims – rose to 1.885 million in the week ended April 5 from 1.844 million in the prior week, revised from 1.850 million. The four-week moving average was 1.867 million compared to 1.866 million in the prior week.

The insured unemployment rate, which is the number of beneficiaries as a percentage of covered employment, remained at 1.2%. This rate has been stable since the week of January 6, 2024, when it dipped to 1.1%.

Economic conditions vary widely across states and territories. In the week ended March 29, the highest unemployment rates were in New Jersey (2.56%), Rhode Island (2.50%), California (2.30%), Massachusetts (2.23%), Minnesota (2.21%) and Washington (2.22%). The lowest rates were in Florida (0.34%), Alabama (0.41%), Virginia (0.46%), Tennessee (0.48%), and North Carolina (0.52%). Rates in other noteworthy states include New York (1.80%), Pennsylvania (1.65%), Illinois (1.98%) and Texas (1.08%). 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.

250417C4.jpg

250417D4.jpg

- Initial claims come in much lower than forecast.
- Continuing claims rise modestly.
- Insured unemployment rate is unchanged.

Unemployment Insurance Claims Decline Unexpectedly in Latest Week

Robert Brusca

250417E.jpg

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.

250417.jpg

On balance, Germany's inflation rate in its factory sector is well behaved Headline inflation has been lower than where it is now only about 29% of the time, while excluding energy PPI inflation has been lower 60% of the time and higher only about 40% of the time. These rankings are based on year-over-year inflation rates for the PPI and the ex-energy pace on data back to 1990. Clearly core inflation is more stubborn than the headline; the headline, of course, is being influenced by the weak energy prices but whether we look at ex-energy prices taking them at face value or on a historic jaunt, ranking them, they seemed to be well behaved and this is also the view from the ECB.

The ECB just cut interest rates today in the EMU. In addition to these trends in inflation, there are concerns going forward about the impact of tariffs. While tariffs can tend to raise the domestic price level, they do not raise inflation unless the tariff effects linger and are embraced by producers and consumers raising their inflation expectations or unless accommodated by the monetary authority. If that were to happen, then the risk of inflation being stoked by tariffs would rise considerably.

Tariffs have the dual effect of raising import prices and making the economy weaker and, if the economy gets weaker, that would likely be a tempering force mitigating upward pressure that might come from the direct imposition of tariffs themselves. Of course, the whole tariff game right now is up in the air, and we can't be sure exactly what the next step is by the U.S. and whether the U.S. and the European Union are going to be able to put their heads together and come to an agreement without punishing each other with higher tariffs first. It's possible that the Germany, the EU, and the U.S. could dodge a bullet; it's also possible that they could take a bullet. Policy is being conducted in a very careful, rarified, fashion. Just yesterday Chair Powell in the U.S. gave his speech noting that tariffs tended to move the Fed away from both of its objectives that, of course, makes monetary policy much more difficult to execute. The ECB and the Fed face the same dilemma.