Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503d.jpg" width="353">
In April, the Business Activity Index for the non-manufacturing sector rose a convincing two and one half points to the highest level since August, reported the Institute for Supply Management (ISM). The rise to 63.0 by far outpaced Consensus expectations for a decline to 59.5.
Since the series&#39; inception in 1997 there has been a 50% correlation between the level of the Business Activity Index and the q/q change in real GDP for services plus construction.
The new orders index jumped five points to 64.6, the highest level since 2004 while the employment index recouped about half of the prior month&#39;s decline with a rise to 56.5 and was up from the 2005 average of 55.9. Since the series&#39; inception in 1997 there has been a 60% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.
Pricing power recovered all of the March decline and rose ten points to the highest level since November. Since inception eight years ago, there has been a 70% correlation between the price index and the y/y change in the GDP services chain price index.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.
Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.

<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/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">April &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>63.0</td>
<td>60.5</td>
<td>60.4</td>
<td>60.1</td>
<td>62.5</td>
<td>58.3</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>70.5</td>
<td>60.5</td>
<td>64.1</td>
<td>67.9</td>
<td>68.8</td>
<td>56.6</td>
</tr>
</tbody>
</table>


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In April, the Business Activity Index for the non-manufacturing sector rose a convincing two and one half points to the highest level since August, reported the Institute for Supply Management (ISM). The rise to 63.0 by far outpaced [...]

ISM Nonmanufacturing Index Up Again

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503b.jpg" width="353">
US light vehicle sales rose a slight 0.9% during April to 16.74M units according to the Autodata Corporation. The sales level matched Consensus expectations.
The rough month-to-month stability of the total, however, masked divergent underlying patterns. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503c.jpg" width="353">
Perhaps reflecting the effects of higher fuel costs, sales of domestic trucks fell a sharp 6.6% (-9.3% y/y) and that decline pulled overall light truck sales down 4.8% (-6.1% y/y) last month. Sales of the relatively fuel efficient imported light trucks, in contrast, rose 5.6% (15.0% y/y).
Auto sales during April rose 7.8% (0.8% y/y) led by an 11.3% jump in imported car sales (12.3% y/y) to 2.58M units, the highest level since early 1990. Sales of domestic autos also improved 6.3% (-3.8% y/y).<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503a.jpg" width="353">
Imports&#39; share of the US light vehicle market surged to another record level, at 23.8%. For the first four months of 2006 imports&#39; share averaged 21.2% versus 20.3% during all of last year.
Inventories of domestically made autos fell 10.2% y/y through February while truck inventories, domestics &amp; imports, through March were off 2.7% y/y.
Production of autos was up 14.5% through March though the GDP estimate of total real motor vehicle output through 1Q was down 2.5% y/y.
The U.S. auto supplier industry in transition from the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cflmay2006_226.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/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil. Units)</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>16.74</td>
<td>16.59</td>
<td>-2.9%</td>
<td>16.92</td>
<td>16.87</td>
<td>16.63</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>8.00</td>
<td>7.42</td>
<td>0.8%</td>
<td>7.65</td>
<td>7.49</td>
<td>7.62</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Trucks</td>
<td>8.74</td>
<td>9.17</td>
<td>-6.1%</td>
<td>9.27</td>
<td>9.37</td>
<td>9.01</td>
</tr>
</tbody>
</table>
</body>
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US light vehicle sales rose a slight 0.9% during April to 16.74M units according to the Autodata Corporation. The sales level matched Consensus expectations. The rough month-to-month stability of the total, however, masked divergent [...]

U.S. Auto Sales Up, Light Truck Sales Down

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503b.jpg" width="353">
US light vehicle sales rose a slight 0.9% during April to 16.74M units according to the Autodata Corporation. The sales level matched Consensus expectations.
The rough month-to-month stability of the total, however, masked divergent underlying patterns. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503c.jpg" width="353">
Perhaps reflecting the effects of higher fuel costs, sales of domestic trucks fell a sharp 6.6% (-9.3% y/y) and that decline pulled overall light truck sales down 4.8% (-6.1% y/y) last month. Sales of the relatively fuel efficient imported light trucks, in contrast, rose 5.6% (15.0% y/y).
Auto sales during April rose 7.8% (0.8% y/y) led by an 11.3% jump in imported car sales (12.3% y/y) to 2.58M units, the highest level since early 1990. Sales of domestic autos also improved 6.3% (-3.8% y/y).<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503a.jpg" width="353">
Imports&#39; share of the US light vehicle market surged to another record level, at 23.8%. For the first four months of 2006 imports&#39; share averaged 21.2% versus 20.3% during all of last year.
Inventories of domestically made autos fell 10.2% y/y through February while truck inventories, domestics &amp; imports, through March were off 2.7% y/y.
Production of autos was up 14.5% through March though the GDP estimate of total real motor vehicle output through 1Q was down 2.5% y/y.
The U.S. auto supplier industry in transition from the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cflmay2006_226.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/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil. Units)</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>16.74</td>
<td>16.59</td>
<td>-2.9%</td>
<td>16.92</td>
<td>16.87</td>
<td>16.63</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>8.00</td>
<td>7.42</td>
<td>0.8%</td>
<td>7.65</td>
<td>7.49</td>
<td>7.62</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Trucks</td>
<td>8.74</td>
<td>9.17</td>
<td>-6.1%</td>
<td>9.27</td>
<td>9.37</td>
<td>9.01</td>
</tr>
</tbody>
</table>
ISM Nonmanufacturing Index Up Again 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 3, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503d.jpg" width="353">
In April, the Business Activity Index for the non-manufacturing sector rose a convincing two and one half points to the highest level since August, reported the Institute for Supply Management (ISM). The rise to 63.0 by far outpaced Consensus expectations for a decline to 59.5.
Since the series&#39; inception in 1997 there has been a 50% correlation between the level of the Business Activity Index and the q/q change in real GDP for services plus construction.
The new orders index jumped five points to 64.6, the highest level since 2004 while the employment index recouped about half of the prior month&#39;s decline with a rise to 56.5 and was up from the 2005 average of 55.9. Since the series&#39; inception in 1997 there has been a 60% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.
Pricing power recovered all of the March decline and rose ten points to the highest level since November. Since inception eight years ago, there has been a 70% correlation between the price index and the y/y change in the GDP services chain price index.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates only to July 1997, therefore its seasonal adjustment should be viewed tentatively.
Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.

<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/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">April &#39;05</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Business Activity Index</td>
<td>63.0</td>
<td>60.5</td>
<td>60.4</td>
<td>60.1</td>
<td>62.5</td>
<td>58.3</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>70.5</td>
<td>60.5</td>
<td>64.1</td>
<td>67.9</td>
<td>68.8</td>
<td>56.6</td>
</tr>
</tbody>
</table>
U.S. Factory Inventories Accumulate 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 3, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503f.jpg" width="353">
Factory inventories rose 0.7% during March and more than made up for an unrevised 0.4% drop the prior month.
Much of the prior month&#39;s inventory decline had been due to lower computers &amp; electronic products which fully recovered with a 2.9% (4.1% y/y) rise. Machinery inventories also were down in February and then rose in March by 1.0% (6.0% y/y) while a 0.2% decline in electrical equipment inventories (6.1% y/y) also fully reversed.
Continuing with earlier accumulation, inventories of furniture &amp; related products jumped 1.9% (5.5% y/y) while primary metals inventories added 0.2% (0.5% y/y) to the very strong accumulation of January &amp; February.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503e.jpg" width="353">
Total factory orders jumped 4.2% due to a 6.5% surge in durable goods orders, revised up from the advance report of a 6.1% surge. That was goosed by orders for nondefense aircraft &amp; parts which rose 71.3% (329.9% y/y). Factory orders less the transportation sector altogether rose 2.2% (6.8% y/y) and reversed all of the prior month&#39;s decline.
Factory shipments rose 0.8% and reversed most of a February drop while less transportation shipments gained back half of the February drop with a 0.8% increase (6.0% y/y). Petroleum shipments rose 7.8% (7.3% y/y). Factory shipments less transportation &amp; petroleum ticked up 0.1% (5.9% y/y).
Unfilled orders ballooned 2.9% due to the strength of aircraft orders. Nevertheless, less the transportation sector altogether backlogs rose 1.5% (11.1% y/y).<a href="http://research.stlouisfed.org/publications/review/05/07/Gali.pdf"> </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/@ED/@ED01/@ED0101/@ED01016/@ED01016.HTM">Factory Survey</a> (NAICS)</th>
<th scope="col">Mar</th>
<th scope="col">Feb</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Inventories</td>
<td>0.7%</td>
<td>-0.4%</td>
<td>3.4%</td>
<td>4.4%</td>
<td>7.7%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">New Orders</td>
<td>4.2%</td>
<td>0.4%</td>
<td>11.6%</td>
<td>8.5%</td>
<td>9.3%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Shipments</td>
<td>0.8%</td>
<td>-1.2%</td>
<td>6.1%</td>
<td>7.4%</td>
<td>9.5%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">Unfilled Orders</td>
<td>2.9%</td>
<td>1.1%</td>
<td>21.1%</td>
<td>16.5%</td>
<td>8.4%</td>
<td>8.0%</td>
</tr>
</tbody>
</table>
ADP National Employment Report & U.S. Payrolls 
by <a href="/comment/Moeller.html">Carol Stone and Tom Moeller</a> May 3, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060503g.jpg" width="353">
Today, ADP, the well-known payroll processors for many employers, published an estimate of the upcoming nonfarm payroll data for April, pointing to an increase in private sector employment of 178,000 for the month (1.9% y/y). They have compiled this from their substantial database of individual companies&#39; payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator meant to project the BLS&#39;s official number. This 178,000 gain would follow March&#39;s 133,000 rise. 
These data are called the &quot;ADP National Employment Report&quot;. The series will be maintained in Haver&#39;s USECON database; historical data go back to December 2000. Importantly, the figures in this report cover only private sector jobs and exclude employment in the public sector, which grew an average of 13,000 per month over the last year. The monthly change also obviously varies, and indeed ranged from a decline of 34,000 to an increase of 35,000. This would be a significant difference between the ADP number and total nonfarm payrolls. Some analysts indicated that ADP&#39;s April estimate of 178,000 in private sector jobs would correspond to a gain in total payrolls of 200,000.
Unlike other indicators of the US labor market, such as unemployment insurance claims, the ADP measure is directly comparable to the kind of data in the official BLS report. Automatic Data Processing, Inc. is the nation&#39;s leading provider of payroll-related services. Their figure is based on information about 24,000,000 jobholders; this is distilled to cover the numbers actually on payrolls during the BLS survey week, about 14,000,000. The report will be issued at 8:15AM on the Wednesday prior to each employment release. 
According to ADP and Macro Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90. The estimator is shown by the firms&#39; analysis to outperform current &quot;consensus&quot; forecasts and models based on claims data. 
The full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/PDF/ADP_NER_Report_April.pdf">here</a>, and their methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
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<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM">LAXEPA@USECON</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Nonfarm Private Payroll Employment (Chg.)</td>
<td>178,000</td>
<td>133,000</td>
<td>1.9%</td>
<td>1.7%</td>
<td>1.3%</td>
<td>-0.4%</td>
</tr>
</tbody>
</table>


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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502e.jpg" width="353">
The British Bankers&#39; Association released figures on mortgage and consumer credit lending today. Outstanding mortgages were up 0.12% from February and 3.54% above March 2005. Consumer credit outstanding, on the contrary, declined 1.82% from February and was 7.18% below March, 2005.
The year-to-year changes in outstanding mortgage and consumer credit have been declining since mid-2004. The deceleration in mortgages has been modest compared to that in consumer credit as can be seen in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502f.jpg" width="353">
The decline in credit card debt is reflected in the decline over the past year or so in retail sales of household goods. The second chart shows the year-to-year change in retail sales of household goods and the net increase in consumer credit outstandings. Both series are seasonally unadjusted.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502g.jpg" width="353">
Banks have been playing a smaller proportional role in mortgage lending as Other Specialist Lenders (Non-bank UK credit grantors and specialist mortgage lenders) have taken a larger share of the market. Banks&#39; share in the market has gone from 72.0% in 2000 to 59.4% in 2005, while that of Other Specialist Lenders has risen from 7.7% to 22.3%. The share of Building Societies has declined moderately from 20.0% to 17.9%. The share of other lenders has been insignificant. The year-to-year changes in outstanding mortgages at Banks and at Other Specialist lenders are shown in the third chart. While the yearly increases in Other Specialist Lenders have been declining they are still increasing at rates of almost 30% compared to about 5% for Banks.

<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://www.haverselect.com/dlx/UK/@U1/@U106/@U106.HTM">United Kingdom</a></th>
<th scope="col">Mar 06</th>
<th scope="col">Feb 06</th>
<th scope="col">Mar 05</th>
<th scope="col">M/M % </th>
<th scope="col">Y/Y %</th>
<th scope="col">2005</th>
<th scope="col">2004&nbsp;</th>
<th scope="col">2003&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">BBA Consumer Credit Outstanding (Bil. GBP)</td>
<td>31.2</td>
<td>31.8</td>
<td>33.6</td>
<td>-1.82</td>
<td>-7.18</td>
<td>33.4</td>
<td>34.0</td>
<td>28.7</td>
</tr>
<tr>
<td class="firstcol">BBA Mortgages Outstanding (Bil.GBP)</td>
<td>513.6</td>
<td>513.0</td>
<td>496.1</td>
<td>0.12</td>
<td>3.54</td>
<td>521.1</td>
<td>496.4</td>
<td>468.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Mortgage Lending by: %</td>
<td>2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
<td>2001</td>
<td> 2000 </td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Banks</td>
<td>59.4</td>
<td>61.8</td>
<td>65.9</td>
<td>69.1</td>
<td>41.0</td>
<td>72.0</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Building Societies</td>
<td>&nbsp;17.9</td>
<td>18.2&nbsp;</td>
<td>18.4</td>
<td>18.3&nbsp;</td>
<td>&nbsp;19.2</td>
<td>&nbsp;20.0</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Other Specialist Lenders</td>
<td>22.3</td>
<td>19.6</td>
<td>15.4</td>
<td>12.1</td>
<td>9.7</td>
<td>7.7</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Other Lenders</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>
</body>
</html>

The British Bankers' Association released figures on mortgage and consumer credit lending today. Outstanding mortgages were up 0.12% from February and 3.54% above March 2005. Consumer credit outstanding, on the contrary, declined [...]

UK Mortgage Lending Up but Consumer Credit Down

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502d.jpg" width="353">
Announced job cuts fell another 8.1% last month on top of the 25.7% m/m decline during March, according to the Challenger, Grey &amp; Christmas survey. The decline was to the lowest level since last April.
During the last ten years there has been an 83% (inverse) correlation between the three month moving average level of announced job cuts and the three month change payroll employment.
Layoffs in the apparel industry dropped sharply (-52.2% y/y) as did job cuts in financial (-37.8 y/y, industrial goods (-5.5% y/y), pharmaceutical (-67.3% y/y) and retail (-82.6% y/y). Announced job cuts in electronics (-74.0% y/y) and automotive industries (139.2% y/y) rose m/m.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Challenger also reported a sharp m/m increase in announced hiring plans (81.7% y/y).

<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/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>59,688</td>
<td>64,975</td>
<td>3.2%</td>
<td>1,072,054</td>
<td>1,039,935</td>
<td>1,236,426</td>
</tr>
</tbody>
</table>
</body>
</html>

Announced job cuts fell another 8.1% last month on top of the 25.7% m/m decline during March, according to the Challenger, Grey & Christmas survey. The decline was to the lowest level since last April. During the last ten years there [...]

Challenger Layoffs Lower Still

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502c.jpg" width="353">
Retail gasoline prices rose less than one penny last week to $2.92 per gallon (30.6% y/y). The near-stability followed four consecutive weeks of increase which ranged between nine and thirteen cents per week.
Earlier signs of relief from the recent upward pressure on prices reversed a bit yesterday as the spot market price for regular unleaded rose a nickel. Nevertheless, the latest spot price at $2.17 per gallon was down from the high of $2.35 during mid-April.
The price of West Texas Intermediate crude oil also move up yesterday to $73.71 per barrel, twelve cents short of the record high.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502b.jpg" width="353">
The jump in gasoline prices has been accompanied by a sharp slowdown in gasoline demand. Through the latest four weeks, demand versus the year ago level went negative by 0.5%, the first negative y/y comparison since last Autumn when gas prices were similarly elevated.
The latest Short-Term Energy and Summer Fuels Outlook from the U.S. Energy Information Administration can be found <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.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/WEEKLY/@W4/@W403/@W40303/@W40303.HTM">US Weekly</a></th>
<th scope="col">05/01/06</th>
<th scope="col">04/24/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">U.S. Retail Gasoline, Regular per Gal.</td>
<td>$2.92</td>
<td>$2.91</td>
<td>30.6%</td>
<td>$2.27</td>
<td>$1.85</td>
<td>$1.56</td>
</tr>
</tbody>
</table>
</body>
</html>

Retail gasoline prices rose less than one penny last week to $2.92 per gallon (30.6% y/y). The near-stability followed four consecutive weeks of increase which ranged between nine and thirteen cents per week. Earlier signs of relief [...]

Gasoline Prices Stable Last Week, But ...

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502a.jpg" width="353">
Chain store sales jumped another 0.7% last week and more than recouped the prior period&#39;s 0.2% decline, according to the International Council of Shopping Centers (ICSC)-UBS survey.
The late-month recovery lifted April chain store sales 1.6% above the March average which rose 0.7% from February. The April gain was the largest in over two years and during the first four months of 2006, chain store sales rose at a 14% annual rate.
During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The chain store sales leading indicator fell 0.6% during the latest week (-1.4% y/y) marking the third decline in the last four periods. In April, the leading indicator is down 0.7% from the March average which rose 0.3% from February.
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.
Cross-Country Personal Saving Rates from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/net/20060501/cover.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/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">04/29/06</th>
<th scope="col">04/22/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>477.7</td>
<td>474.6</td>
<td>4.3%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>


</html>

Chain store sales jumped another 0.7% last week and more than recouped the prior period's 0.2% decline, according to the International Council of Shopping Centers (ICSC)-UBS survey. The late-month recovery lifted April chain store [...]

When Shoppers Shop ...

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502a.jpg" width="353">
Chain store sales jumped another 0.7% last week and more than recouped the prior period&#39;s 0.2% decline, according to the International Council of Shopping Centers (ICSC)-UBS survey.
The late-month recovery lifted April chain store sales 1.6% above the March average which rose 0.7% from February. The April gain was the largest in over two years and during the first four months of 2006, chain store sales rose at a 14% annual rate.
During the last ten years there has been a 47% correlation between the y/y change in chain store sales and the change in nonauto retail sales less gasoline.
The chain store sales leading indicator fell 0.6% during the latest week (-1.4% y/y) marking the third decline in the last four periods. In April, the leading indicator is down 0.7% from the March average which rose 0.3% from February.
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.
Cross-Country Personal Saving Rates from the Federal Reserve Bank of St. Louis is available <a href="http://research.stlouisfed.org/publications/net/20060501/cover.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/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">04/29/06</th>
<th scope="col">04/22/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>477.7</td>
<td>474.6</td>
<td>4.3%</td>
<td>3.6%</td>
<td>4.7%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
Gasoline Prices Stable Last Week, But ... 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 2, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502c.jpg" width="353">
Retail gasoline prices rose less than one penny last week to $2.92 per gallon (30.6% y/y). The near-stability followed four consecutive weeks of increase which ranged between nine and thirteen cents per week.
Earlier signs of relief from the recent upward pressure on prices reversed a bit yesterday as the spot market price for regular unleaded rose a nickel. Nevertheless, the latest spot price at $2.17 per gallon was down from the high of $2.35 during mid-April.
The price of West Texas Intermediate crude oil also move up yesterday to $73.71 per barrel, twelve cents short of the record high.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502b.jpg" width="353">
The jump in gasoline prices has been accompanied by a sharp slowdown in gasoline demand. Through the latest four weeks, demand versus the year ago level went negative by 0.5%, the first negative y/y comparison since last Autumn when gas prices were similarly elevated.
The latest Short-Term Energy and Summer Fuels Outlook from the U.S. Energy Information Administration can be found <a href="http://www.eia.doe.gov/emeu/steo/pub/contents.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/WEEKLY/@W4/@W403/@W40303/@W40303.HTM">US Weekly</a></th>
<th scope="col">05/01/06</th>
<th scope="col">04/24/06</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">U.S. Retail Gasoline, Regular per Gal.</td>
<td>$2.92</td>
<td>$2.91</td>
<td>30.6%</td>
<td>$2.27</td>
<td>$1.85</td>
<td>$1.56</td>
</tr>
</tbody>
</table>
Challenger Layoffs Lower Still 
by <a href="/comment/Moeller.html">Tom Moeller</a> May 2, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502d.jpg" width="353">
Announced job cuts fell another 8.1% last month on top of the 25.7% m/m decline during March, according to the Challenger, Grey &amp; Christmas survey. The decline was to the lowest level since last April.
During the last ten years there has been an 83% (inverse) correlation between the three month moving average level of announced job cuts and the three month change payroll employment.
Layoffs in the apparel industry dropped sharply (-52.2% y/y) as did job cuts in financial (-37.8 y/y, industrial goods (-5.5% y/y), pharmaceutical (-67.3% y/y) and retail (-82.6% y/y). Announced job cuts in electronics (-74.0% y/y) and automotive industries (139.2% y/y) rose m/m.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Challenger also reported a sharp m/m increase in announced hiring plans (81.7% y/y).

<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/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">April</th>
<th scope="col">Mar</th>
<th scope="col">Y/Y</th>
<th scope="col">2005</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>59,688</td>
<td>64,975</td>
<td>3.2%</td>
<td>1,072,054</td>
<td>1,039,935</td>
<td>1,236,426</td>
</tr>
</tbody>
</table>
 UK Mortgage Lending Up but Consumer Credit Down  
by <a href="/comment/Curley.html">Louise Curley</a> May 2, 2006


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502e.jpg" width="353">
The British Bankers&#39; Association released figures on mortgage and consumer credit lending today. Outstanding mortgages were up 0.12% from February and 3.54% above March 2005. Consumer credit outstanding, on the contrary, declined 1.82% from February and was 7.18% below March, 2005.
The year-to-year changes in outstanding mortgage and consumer credit have been declining since mid-2004. The deceleration in mortgages has been modest compared to that in consumer credit as can be seen in the first chart.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502f.jpg" width="353">
The decline in credit card debt is reflected in the decline over the past year or so in retail sales of household goods. The second chart shows the year-to-year change in retail sales of household goods and the net increase in consumer credit outstandings. Both series are seasonally unadjusted.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/060502g.jpg" width="353">
Banks have been playing a smaller proportional role in mortgage lending as Other Specialist Lenders (Non-bank UK credit grantors and specialist mortgage lenders) have taken a larger share of the market. Banks&#39; share in the market has gone from 72.0% in 2000 to 59.4% in 2005, while that of Other Specialist Lenders has risen from 7.7% to 22.3%. The share of Building Societies has declined moderately from 20.0% to 17.9%. The share of other lenders has been insignificant. The year-to-year changes in outstanding mortgages at Banks and at Other Specialist lenders are shown in the third chart. While the yearly increases in Other Specialist Lenders have been declining they are still increasing at rates of almost 30% compared to about 5% for Banks.

<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://www.haverselect.com/dlx/UK/@U1/@U1.HTM">United Kingdom</a></th>
<th scope="col">Mar 06</th>
<th scope="col">Feb 06</th>
<th scope="col">Mar 05</th>
<th scope="col">M/M % </th>
<th scope="col">Y/Y %</th>
<th scope="col">2005</th>
<th scope="col">2004&nbsp;</th>
<th scope="col">2003&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">BBA Consumer Credit Outstanding (Bil. GBP)</td>
<td>31.2</td>
<td>31.8</td>
<td>33.6</td>
<td>-1.82</td>
<td>-7.18</td>
<td>33.4</td>
<td>34.0</td>
<td>28.7</td>
</tr>
<tr>
<td class="firstcol">BBA Mortgages Outstanding (Bil.GBP)</td>
<td>513.6</td>
<td>513.0</td>
<td>496.1</td>
<td>0.12</td>
<td>3.54</td>
<td>521.1</td>
<td>496.4</td>
<td>468.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp;Mortgage Lending by: %</td>
<td>2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
<td>2001</td>
<td> 2000 </td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Banks</td>
<td>59.4</td>
<td>61.8</td>
<td>65.9</td>
<td>69.1</td>
<td>41.0</td>
<td>72.0</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Building Societies</td>
<td>&nbsp;17.9</td>
<td>18.2&nbsp;</td>
<td>18.4</td>
<td>18.3&nbsp;</td>
<td>&nbsp;19.2</td>
<td>&nbsp;20.0</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">Other Specialist Lenders</td>
<td>22.3</td>
<td>19.6</td>
<td>15.4</td>
<td>12.1</td>
<td>9.7</td>
<td>7.7</td>
<td>--</td>
<td>--</td>
</tr>
<tr>
<td class="firstcol">Other Lenders</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>0.0</td>
<td>--</td>
<td>--</td>
</tr>
</tbody>
</table>


</html>

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

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The Conference Board's Index of Consumer Confidence fell 8.4% (-11.8% y/y) to 86.0 after a 6.2% decline in March to 93.9, revised from down 7.2%. A reading of 87.2 had been expected in the Action Economics Forecast Survey. The April figure was 23.8% below its November 2024 high. Weakness in confidence is widespread amongst components in this latest report.

The Expectations Index plunged 18.7% (-20.9% y/y) to 54.4, after falling 10.6% in March, revised from a 12.8% decline. This latest figure was the weakest since October 2011. The Present Situation index fell 0.7% (-5.0% y/y) to 133.5, after declining 2.7% in March and 1.3% in February. The reading was the lowest in seven months.

The percentage of respondents assessing business conditions as “good” rose to 19.2% this month after declining to 18.3% in March. The index hit a high of 22.0% in October. The percentage assessing conditions as “bad” eased to 16.1% after rising to 16.5% in March. The appraisal of labor market conditions dipped m/m in April as 31.7% of respondents thought jobs were plentiful, down from 33.6% in March. Jobs were viewed as hard to get by 16.6% of respondents this month, up from 16.1% in March. This measure has risen from 11.0% in January 2024. The labor market differential calculated by Haver Analytics (the percentage of consumers who think jobs are plentiful minus the percentage who believe that jobs are currently hard to get) fell to 15.1% compared to 17.5% in March and remained below a high of 47.1% in March 2022. This series has a 60% correlation with the unemployment rate over the last ten years.

Expectations for business conditions deteriorated in April. A lessened 15.7% of respondents expect conditions to improve over the next six months, down from 20.8% in both February and January, while a higher 34.8% expect them to deteriorate, up from 25.5% in February. On employment, a lessened 13.7% expect the number of jobs to increase over the next six months. The percentage expecting the number of jobs to decline in the next six months rose to 32.1% after surging to 26.6% in February. A lessened 15.0% expect income to increase in six months. That remained down from a high of 20.7% in November and compares to a higher 18.2% who expect income to decrease, up from 11.8% in October.

The expected rate of price inflation over the next twelve months jumped to 7.0% in April after increasing to 6.0% in March. This compares to a low of 5.0% in November. Interest rates are expected to rise this year by a higher 56.1% of respondents, up from a 45.5% low in November 2024. The percentage of respondents expecting equity prices to increase over the next twelve months declined to 36.1% after dropping from 57.2% in November, while the percentage expecting a decline in stock prices jumped to 48.5% from a 21.7 low in November.

The percentage of respondents planning to buy a home fell in April to 4.5% from 5.6% in March. Plans to purchase an automobile eased to 10.5% this month, down from 10.7% in March and February.

The Consumer Confidence data are available in Haver’s **CBDB** database. The total indexes, which are indexed to 1985=100, appear in **USECON**, and market expectations are in **AS1REPNA**.

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- Confidence weakens to lowest level since May 2020.
- Expectations reading plummets to 2011 low; present situation reading eases.
- Inflation and interest rate expectations rise further.

U.S. Consumer Confidence Slides Again in April; Inflation Expectations Strengthen

Sandy Batten

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Job openings fell 288,000 to 7.192 million in March from a downwardly revised 7.480 million in February (previously 7.568 million), according to the Job Openings and Labor Turnover Survey. This is the lowest level of openings since last September although openings have been relatively trendless for the past year. The number of openings continues to exceed the number unemployed, but by only 109,000, the smallest amount since the pandemic, and indicates a relatively balanced labor market. The job openings rate fell to 4.3% in March from 4.5% in February. The March figure was in line with those immediately prior to the pandemic and is well below a high of 7.4% reached in March 2022. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings.

Private sector openings fell 229,000 to 6.359 million in March from 6.588 million in February. The March decline was widely spread with manufacturing (+4,000) and “other” (+20,000) the only major sectors experiencing an increase. Trade, transportation and utilities openings fell 62,000 on top of 198,000 plunge in February. Construction openings fell 38,000, their first monthly decline in three months. Private education and health services openings fell 61,000, their third monthly decline in the past four months. The private sector job openings rate edged down to 4.5% in March from 4.6% in February (revised down from 4.7%). It has fluctuated between 4.4% and 5.0% over the past 13 months without a noticeable trend.

Total hiring edged up 41,000 to 5.411 million in March. This was the second monthly gain in the past six months. Over the past year, hiring has fallen 61,000. Private hiring rose 30,000 to 5.050 million, its fourth consecutive monthly gain although it has fallen 41,000 over the past year. Hiring in leisure and hospitality increased 48,000, the first increase in three months. Private educational and health services hiring rose 36,000, also its first increase in three months. Finance hiring increased 28,000. In contrast, construction hiring fell 45,000, the first monthly decline in three months. And professional and business services hiring fell 43,000. Total government hiring rose 11,000 which included a 1,000 decline in federal government hiring. The total hiring rate was unchanged at 3.4%, where it has been for five of the past six months. The private hiring rate was also unchanged at 3.7% in March for the sixth consecutive month.

Total job separations fell 179,000 to 5.137 million in March. They have been little changed over the past year. Quits increased 82,000 to 3.332 million; layoffs fell 222,000, the largest monthly decline since February 2023; other separations fell 39,000 to 247,000. Quits are voluntary separations initiated by the employee and are often viewed as an indicator of workers’ willingness to leave jobs for other opportunities. Private quits (+91,000 in March to 3.145 million) have been on a modest uptrend since late last year, possibly pointing to a slight firming of the labor market. Private layoffs (separations initiated by the employer) appear to be reversing their uptrend from last year. They fell 229,000 to 1.451 million in March, also their largest monthly decline since Febuary2023, led by a 79,000 monthly decline in leisure and hospitality layoffs and a 56,000 drop in trade, transportation and utilities layoffs.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

- Job openings fell to 7.192 million from downwardly revised 7.480 million in February.
- The job opening rate slid to 4.3% from 4.5%.
- Hiring was little changed in March.
- Layoffs fell to lowest level since last June.

JOLTS: Openings and Layoffs Fall in March; Hiring Little Changed

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The advance estimate of the U.S. international trade deficit in goods deepened to $162.0 billion in March after narrowing to $147.8 billion in February, as reported by the U.S. Census Bureau showed. A deficit of $143.0 billion for March had been expected by the Action Economics Forecast Survey. In Q1'25, the goods trade deficit widened to $463.2 billion after rising to $324.0 billion in Q4'24 from $305.1 billion in Q3'24. In real terms, the Q1’25 trade deficit is likely to have subtracted from real GDP growth, after having added 0.26 percentage point to growth in Q4'24.

Total goods imports jumped 5.0% (31.3% y/y) to $342.7 billion in March after a 0.3% February gain. Consumer goods imports surged 27.7% (54.1% y/y) following a 2.9% increase. Auto imports strengthened 6.6% (9.5% y/y) after a 1.2% rise while capital goods imports increased 4.0% in March (23.2% y/y) following a 1.7% February gain. Offsetting these increases, imports of industrial supplies & materials declined 13.3% (+39.9% y/y) after falling 3.7% in February. Foods, feeds & beverage imports eased 0.4% (+10.9% y/y) following a 2.1% decline and imports of “other” goods were off 5.6% (+13.7% y/y) after a 4.7% February increase.

Total goods exports rose 1.2% (6.9% y/y) to $180.8 billion in March, the fourth rise in five months, after increasing 3.7% in February. The rise reflected a 6.9% surge (-0.5% y/y) in foods, feeds & beverages after a decline of 2.5% In February. Industrial supplies & materials exports gained 3.2% (4.5% y/y) after increasing 4.6% in February. Exports of autos surged 7.9% (10.8% y/y) following a 2.7% increase. Exports of other goods edged 0.3% higher (2.4% y/y) after four straight months of decline. Offsetting these gains, consumer goods exports declined 1.6% (+1.9% y/y) following a 0.6% rise. Capital goods exports were off 2.6% (+13.3% y/y) after rising 4.8% in February.  

The advance international trade data can be found in Haver's **USECON** database. The expectation figure is from the Action Economics Forecast Survey, which is in **AS1REPNA**.

- Advance reading reflects higher consumer goods & auto imports.
- Other imports also are strong, while exports rise modestly.
- Exports growth held back by fall in nonauto consumer & capital goods.

U.S. Goods Trade Deficit Deepens to Another Record in March as Imports Surge

Winnie Tapasanun

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U.S. house prices edged up 0.1% m/m in February after rises of 0.3% in January (+0.2% initially) and 0.4% in December (+0.5% previously), according to the Federal Housing Finance Agency (FHFA) House Price Index. The February HPI at 437.32 was 13.3% above a low of 386.15 in August 2022. The February m/m reading was the 11th straight monthly gain but the smallest since May 2024. The year-on-year rate of increase decelerated to 3.9% in February, the lowest since June 2023, from 5.0% in January; thus, having remained lower than 7.3% in February 2024 and well below a high of 18.7% in February 2022.

House prices rose m/m in February (vs. January) in six of the nine census divisions. These included New England (1.3% vs. 0.1%), East North Central (0.8% vs. 0.5%), Middle Atlantic (0.6% vs. 1.0%), South Atlantic (0.3% vs. -0.6%), West North Central (0.2% vs. 0.8%), and East South Central (0.1% vs. -0.03%). To the downside, house prices fell m/m in three census divisions in February (vs. January): Pacific (-0.8% vs. 0.6%), Mountain (-0.7% vs. -0.02%), and West South Central (-0.1% vs. 0.9%).

Year-on-year house prices continued to gain in February. However, the pace of increase decelerated y/y in February (vs. January) in all of the nine census divisions. These were Pacific (0.9% vs. 3.6%), West South Central (2.1% vs. 2.8%), South Atlantic (3.2% vs. 4.1%), Mountain (3.5% vs. 4.3%), East South Central (3.7% vs. 4.4%), West North Central (4.2% vs. 5.0%), New England (6.1% vs. 7.5%), East North Central (6.5% vs. 7.0%), and Middle Atlantic (7.0% vs. 8.5%).

The FHFA house price index is a weighted purchase-only index that measures average price changes in repeat sales of the same property. An associated quarterly index includes refinancing the same kind of properties. The indexes are based on transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included.

The FHFA data are available in Haver’s **USECON** database.

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- Feb. FHFA HPI +0.1% m/m (+3.9% y/y, lowest since June ’23); +0.3% m/m (+5.0% y/y) in Jan.
- House prices up m/m in six of nine census divisions but down in Pacific, Mountain, and West South Central.
- House prices up y/y in all of the nine regions, w/ the highest rate in Middle Atlantic (7.0%) and the lowest rate in Pacific (0.9%).


U.S. FHFA House Price Growth Continues to Decelerate in February

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Retail gasoline prices for all grades slipped to an average $3.26 per gallon (-13.7% y/y) in the week ended April 28 after falling to $3.27 in the prior week. Prices were $3.37 per gallon to begin the month but remained above their low of $3.13 in the week of December 9. An earlier high was $3.79 in the week ending April 22, 2024. The all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel fell to $3.51 per gallon (-11.0% y/y) in the week of April 28 from $3.53 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 rose to $63.09 per barrel (-24.8% y/y) in the week ended April 25, after rising to $62.50 per barrel in the prior week. Prices remained below a high of $91.45 in the week of September 29, 2023. The cost of crude oil peaked at $120.46 in the week of June 10, 2022. Yesterday, the price was $62.05 per barrel. The price of European Brent crude oil edged up to $67.92 per barrel (-23.3% y/y) in the week of April 25 from $67.76 in the previous week. Prices remained well below a recent high of $95.61 in the week of September 29, 2023 and compared to a peak of $127.40 in the week of June 10, 2022. Yesterday the price was $66.13 per barrel.

Natural gas prices declined last week to an average $2.97 per mmbtu (+92.9% y/y) in the week ended April 25, after falling to $3.26/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’s price was $2.96/mmbtu.

Gasoline demand slipped 0.4% y/y in the four weeks ending April 18 following a 3.4% y/y decline in the prior four weeks. Demand for all petroleum products improved 0.4% y/y in the four weeks ending April 18 after a 1.7% y/y decline in the previous four-week period. Crude oil input to refineries fell 1.3% y/y in the four weeks ending April 18 after a 1.6% y/y decline in the prior four weeks.

Gasoline inventories rose 1.2% y/y in the week ending April 18 after a 2.9% y/y rise in the week ending April 11. Residual fuel oil inventories fell 19.0% y/y in the week of April 18, after a 14.0% y/y fall in the prior week. Crude oil inventories rose 2.6% y/y in the week of April 18 after a 1.8% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories fell w/w to 26.4 days in the week of April 18 from 27.5 days in the prior. The recent low was 22.9 days in the week of November 8. The supply of crude oil also was unchanged w/w at 28.3 days in the week of April 18 for the third straight week, up from 24.6 days in the week of January 10 but 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.

- Gasoline prices ease.
- Crude oil prices rise.
- Natural gas costs decline further.

Economy in Brief

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