Haver Analytics
Haver Analytics

Economy in Brief

    • Rate stability follows three meetings of decline.
    • Economic goals are unchanged.
    • Deficit widening subtracts substantially from real GDP growth.
    • Exports decline to lowest level since November 2023.
    • Import surge is broad-based.
    • Both purchase and refinancing loan applications fell in the latest week.
    • Effective interest rates on 30-year fixed-rate loans held steady at 7.20%.
    • Average loan size rose to the highest since the November 1 week.
  • Money supply growth globally shows broad acceleration across countries. 12-month growth is faster than it was 12-months ago for every country in the table except the United Kingdom. Compared to growth rates two-and three-years ago, all countries show current money growth is stronger.

    Monetary stimulus is in play. Monetary growth also shows shorter-term building stimulus as 6-month growth exceeds its 12-month pace and 3-month growth exceeds its 6-month pace broadly- in all countries except the U.K. In the EMU, this sort of sequential growth is also advancing for credit in addition to for money.

    Monetary and credit stimulus is in train – at least nominally.

    Real variables, however, show flat to slightly weaker real money growth in the EMU. Similarly, in the EMU, credit growth runs from slightly weakening to flat growth and growth rates that are still negative reveal contracting credit.

    Elsewhere real money growth in the United States has transitioned from a contraction in real balances over two years to showing growth and accelerating real balance growth from 12-months to six-months to three-months. However, the growth in real balance effects is not broad outside the United States. U.K. real balance growth remains negative, and it shows real balances shrinking at an increasingly rapid pace. The same is true in Japan where real balance growth is contracting at an increasingly rapid pace. Only the U.S. shows real balances and nominal money growth accelerating.

    The most interesting observation here is the finding that nominal money balances are accelerating but real balance growth is weakening or flat except for the U.S. where both show increasing stimulus. Inflation has generally stopped falling and in each country in the table; the 12-month low for inflation is higher than the current year-on-year pace for all countries– and most show at least a minor inflation uptick is in progress.

    • Confidence weakens to lowest level in four months.
    • Present situations reading and expectations fall sharply.
    • Inflation and interest rate expectations rise.
    • New orders for durable goods unexpectedly fell 2.2% m/m in December.
    • The total was dragged down by a 33.1% m/m drop in aircraft orders.
    • Excluding aircraft, remaining orders edged up 0.1% m/m.
    • Core capital goods orders and shipments posted solid increases in December with upward revisions to November.
    • FHFA HPI +0.3% (+4.2% y/y, lowest since June ’23) in Nov., easing from +0.5% (+4.5% y/y) in Oct.
    • House prices up m/m in six of nine census divisions but down for the first time since July in East South Central (-0.6%) and West South Central (-0.4%).
    • House prices up y/y in all of the nine regions, w/ the highest rate in New England (7.7%).
    • Gasoline prices slip.
    • Crude oil prices decline sharply.
    • Natural gas prices reverse earlier week’s gain.