Sandy Batten

241017N2.jpg

241017O2.jpg

The Current General Activity Diffusion Index rose to 10.3 in October from 1.7 in September, according to the Manufacturing Business Outlook Survey (MBOS) from the Federal Reserve Bank of Philadelphia, indicating further improvement in activity in the third Federal Reserve District this month. A reading of 3.0 had been expected in the Action Economics Forecast Survey. Twenty-four percent of the firms reported increases in general activity in October (up from 21.9% in September) while 14.0% reported decreases (down from 20.2% in September). Responses to this month's survey were collected from October 7 to October 14.

The headline index reflects the answer to a single question about business conditions. Haver Analytics calculates an ISM-adjusted current activity diffusion index from five key components using the methodology along the lines of the national ISM index. The index rebounded to 52.7 in October from 49.3 in September, indicated that the rise in activity was relatively broad based.

The new orders index rebounded to 14.2 in October after having fallen to -1.5 in September with 30.5% of respondents reporting an increase in orders while only 16.3% reported a decline, the lowest since August 2023. Similarly, the shipments index bounced back to 7.4 in October from -14.3 in September. Twenty-seven percent of respondents reported an increase in shipments while 19.8% reported a decline. Unfilled orders rose but remained negative for the second consecutive month at -1.5. Delivery times lengthened to 10.2 in October from -0.7 in September. Inventory investment continued but the pace slowed with the index falling to 0.5 in October from 5.0 in September.

Employment conditions weakened in October with the number of employees’ index falling to -2.2 from 10.7 in September. Eleven percent of respondents reported an increase in employment, the same as last month, while 12.9% reported a decline versus 0% last month. The average workweek index rose slightly but remained decidedly negative at -11.8.

Both price indexes declined in October but remained positive. The prices paid index declined from 34.0 to 29.7. Nearly 35% of the firms reported increases in input prices, while 5.0% reported decreases; 60.0% of the firms reported no change. The current prices received index decreased 7 points to 17.9. Almost 22 of the firms reported increases in prices received for their own goods, 3.8% reported decreases, and 71.9% reported no change.

The future activity index jumped up to 36.7 this month, its highest reading in three months, from 15.8 in September. Apart from inventories, all other components posted solid increases, led by new orders and shipment.

In this month’s special question, manufacturers were asked about their plans for different categories of capital expenditures next year. Almost 52% of the firms expect to increase total capital spending, compared with 21% that expect to decrease total spending; 27% expect total spending to stay the same. When this question was asked last year, the share of firms expecting to decrease spending slightly exceeded the share of firms expecting to increase spending (30% versus 24%). On balance, the firms expect higher capital expenditures next year for computer and related hardware, software, noncomputer equipment, and energy-saving investments, and lower expenditures on structure and other investments.

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 figures are from the Action Economics Forecast Survey in **AS1REPNA**.

241017P2.jpg

241017Q2.jpg

- The headline index rose more than expected to 10.3 from 1.7.
- The increase was rather widespread with the ISM-adjusted index rising to 52.7.
- New orders and shipments components indexes rebound from negative readings in September to positive in October.
- The employment component index fell back into negative territory in October after a solid increase in September.
- Capital spending expectations rise markedly.

Philly Fed Manufacturing Index Rises Further in October

241017F5.jpg

241017G5.jpg

Total business inventories rose 0.3% m/m (2.4% y/y) in August, the same monthly increase as in June and July. A 0.3% increase had been expected in the Informa Global Markets Survey.

Retail inventories rose 0.6% m/m (6.4% y/y) in August, slightly slower than the 0.8% monthly gain in July. Increased auto inventories continued to be the major contributor to the rise in overall inventories in August. While the 0.8% m/m increase in auto inventories was the lowest monthly increase in six months, it accounted for 44% of the monthly increase in total inventories. General merchandise inventories were up 1.3% m/m, their largest monthly gain since December 2023. Food and beverage store inventories rose 1.2% m/m in August, their largest monthly gain since October 2022. By contrast, furniture inventories fell 0.5% m/m, their fourth consecutive monthly decline.

Manufacturing inventories edged up 0.1% m/m (0.6% y/y) in August after having been unchanged in July. Wholesale inventories also increased 0.1% m/m (0.6% y/y) in August versus a 0.2% monthly gain in July.

Total business sales fell 0.2% m/m (+1.3% y/y) in August after a 1.1% m/m jump in July. Factory sales fell 0.5% (+1.0% y/y); wholesale sales slipped 0.1% m/m (+1.1% y/y). Retail sales were essentially unchanged (+1.9% y/y) with weakness widespread across major sectors.

With sales falling and inventories rising in August, the inventory/sales (I/S) ratio edged up to 1.38 from 1.37 in July, It has been either 1.37 or 1.38 in each of the past nine months. The manufacturing I/S ratio inched up to 1.46 in August from 1.45. The wholesale I/S was unchanged at 1.35. And the retail I/S increased to 1.33 from 1.32 in July.

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

241017H5.jpg

241017I5.jpg

- Inventories increased 0.3%, led by retailers.
- Sales declined, led by factory sales.
- Inventory/sales ratio stuck in a range.

U.S. Business Inventories Rose While Sales Fell in August

Kathleen Stephansen, CBE

241017A2.jpg

241017B2.jpg

Initial claims for unemployment insurance dropped by 19,000 to 241,000 seasonally adjusted in the week ended October 12, from 260,000 in the previous week, revised up 2,000 from the initially reported 258,000 level. The Action Economics Forecast Survey had expected 245,000 in the October 12 week. Press reports indicate that the jump in the October 5 week was related to the impact of Hurricane Helene. The effects of both Hurricane Helene and Milton will likely keep weekly claims data volatile in the coming weeks. The four-week moving average of initial claims was 236,250 in the week ended October 12, up from 231,500 the week before.

In the week ended October 5, the total number unemployment benefit recipients – also known as insured unemployment – was 1.867 million, up 9,000 from 1.858 million in the week of September 28, revised down from 1.861 million. The four-week moving average of insured unemployment was 1.843 million, up from 1.831 million in the prior week.

Also, in the week ended October 5, the insured unemployment rate was still 1.2%. This is the number of beneficiaries as a percent of covered employment; the rate has been at 1.2% continuously since March 11, 2023.

Economic conditions vary widely across states and territories. In the week ended September 28, the highest unemployment rates were in New Jersey (2.18%), California (2.01%), Puerto Rico (1.81%), Rhode Island (1.78%) and Washington (1.76%). The lowest rates were in South Dakota (0.23%), North Dakota (0.34%), Florida, Virginia and North Carolina (each 0.40%), and Alabama, Kansas and Nebraska (each 0.43%). Rates in other notable states include New York (1.47%), Illinois (1.42%), Pennsylvania (1.34%) and Texas (1.05%). 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.

241017C2.jpg

241017D2.jpg

- Continuing claims up 9,000 in the October 5 week, after the 39,000 jump in September 28 week.
- Insured unemployment rate holds at 1.2%.

U.S. Unemployment Insurance Claims Dropped 19,000 in Week Ended October 12

Tom Moeller

241016J2.jpg

241016K2.jpg

Pricing pressure from the foreign trade sector eased last month. Import prices weakened 0.4% (-0.1% y/y) in September following a 0.2% August decline, revised from -0.3%. The Action Economics Forecast Survey expected a 0.3% decline. Export prices declined 0.7% (-2.1% y/y) last month after falling 0.9% in August, revised from -0.7%. The Action Economic Forecast Survey expected a 0.6% drop.

The monthly decline in import prices reflected a 7.0% drop (-17.3% y/y) in fuels & lubricants prices which came after a 2.9% decline in August. Nonfuel prices, however, edged 0.1% higher for the third straight month. Their y/y increase has risen to 1.8%, up from -1.9% in April of 2023. Auto import prices improved 0.2% (2.7% y/y), the same as in August. Nonauto consumer goods prices increased 0.2% (0.8% y/y). The gain followed three straight monthly declines. Capital goods prices held steady (+0.4% y/y) after a 0.2% increase. Weakening, however, were foods, feeds & beverage prices which declined 1.5% (+3.8% y/y) after rising 0.2% in August.

The weakening in export prices in September reflected a 0.9% drop (-1.8% y/y) in nonagricultural export prices which was the fourth decline in the last five months. A 0.6% rise (-5.3% y/y) in agricultural product prices offset some of this weakness. Leading the decline, industrial supplies & materials prices fell 2.4% (-6.3% y/y) after a 1.6% August drop. Motor vehicle & parts prices edged 0.1% lower (+2.9% y/y) and reversed the 0.1% rise in August. Offsetting these declines, nonauto consumer goods prices increased 0.3% (0.9% y/y) following a 0.1% improvement in August. Capital goods prices rose 0.2% (1.6% y/y) after a 0.2% dip.

Each of these monthly trade price numbers are not seasonally adjusted. 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 **AS1REPN**A database.

241016L2.jpg

241016M2.jpg

- Import price decline led by oil; elsewhere most prices firm.
- Export price weakness led by costs of industrial supplies.

U.S. Import and Export Prices Decline in September

241016C2.jpg

241016D2.jpg

Retail gasoline prices for all grades rose to $3.29 per gallon (-11.1% y/y) in the week ended October 14 after falling to $3.26 per gallon in the prior week. Prices remain below the late-April high of $3.79 per gallon, well under their all-time high of $5.11 in the week ended June 13, 2022. Retail prices for on-highway diesel fuel increased to $3.63 per gallon (-18.3% y/y) from $3.58 per gallon. These prices reached a high of $4.63 per gallon in the third week of September of last year.	

The average price of West Texas Intermediate crude oil strengthened to $75.07 per barrel (-12.0% y/y) in the week ended October 11 after rising to $71.47 per barrel in the prior week. It was the highest price in six weeks but they remained lower than the $91.45 high in the last week of September 2023. Yesterday, the price of West Texas Intermediate crude oil fell to $70.58 per barrel. The price of European Brent crude oil increased to $78.51 per barrel (-10.5% y/y) in the week ended October 11 after rising to $75.16 in the prior week. The price of Brent has recently ranged from a low of $74.31 in the week ended June 30, 2023 to a high of $121.57 in the week ended June 10, 2022. Yesterday, the price weakened to $73.75 per barrel.

Natural gas prices fell to an average $2.40 /mmbtu (-25.0% y/y) in the week ended October 11 from $2.67 in the prior week. Prices recently touched a high of $2.73/ mmbtu in the second week of June and they remained well above their low of $1.40/mmbtu in the second week of March. Prices reached a high of $9.56/mmbtu averaged in the last week of August 2022. Yesterday, the price of natural gas moved lower to $2.37/mmbtu.

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** and **USENERGY** databases.

- Gasoline prices edge up, reversing earlier decline.
- Crude oil costs move higher.
- Natural gas prices decline.

U.S. Energy Prices Are Mixed in Latest Week

241016A1.jpg

241016B1.jpg

Mortgage loan applications plummeted 17.0% (+37.9% y/y) in the week ended October 11, after a decline of 5.1% (+54.8% y/y) in the week ended October 4. Applications for loans to purchase a house dropped 7.2% (+6.6% y/y) in the week ended October 11, after a decline of 0.1% (+8.5% y/y) in the week ended October 4, while applications to refinance an existing mortgage fell 26.3% (+111.3% y/y) following a decline of 9.3% (+158.5% y/y) in the prior week. These data are from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey.

The effective interest rate on a 30-year fixed-rate mortgage was 6.71% in the week ended October 11, up 17 bps from 6.54% in the week ended October 4 and up 39 bps over the past two weeks. A recent high of 6.59% was reached in the week ended August 30. The effective rate on a 15-year fixed rate mortgage was 6.10% in the October 11 week, up 22 bps from the 5.88% rate in the October 4 week. The rate on 30-year Jumbo loans rose 17 bps to 6.95% in the October 11 week, from 6.78% in the October 4 week, and the rate on 5-year ARM loans rose 5 bps to 6.33% in the latest week from 6.28%.

The share of loan applications to refinance an existing mortgage was 46.5% in the week ended October 11, down from 52.4% in the week ended October 4. The share of applications for ARMs was 5.9% in the latest week, unchanged from the prior week.

The average size of a mortgage loan application was $389,200 in the week of October 11, down 3.4% w/w from $402,900 in the week ended October 4. The average size of a loan to purchase a house eased 0.9% w/w to $448,600 in the latest week from $452,600 in the October 4 week. The average size of a loan to refinance dropped 10.2% to $321,000 in the October 11 week from $357,600 in the October 4 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.

- Loan applications to purchase and refinance a house plummeted in the latest week.
- Interest rates on all loans rose in the latest week.
- Average loan size declined.

U.S. Mortgage Loan Applications Plunged in the October 11 Week

241015J11.jpg

241015K11.jpg

The General Business Conditions Index from the Federal Reserve Bank of New York declined to -11.9 in October after surging to 11.5 in September. The decline brought it to the lowest level since a May level of -15.6. A reading of 3.0 had been expected in the Action Economics Forecast Survey. The percentage of respondents reporting an improvement in business conditions fell to 26.6% from 32.7% in September while the percentage reporting a decline in activity rose to 38.5% from 21.2% last month. The headline index reflects the answer to a single question concerning the state of economic activity. The survey responses were collected between October 2 and October 9.

Haver Analytics calculates a composite index, which is comparable to the ISM manufacturing index. That index declined to 48.1 in October from 52.0 in September. A level of 50 is the breakeven point between expansion and contraction. The index is the average of five diffusion indexes; new orders, shipments, employment, supplier deliveries and inventories with equal weights (20% each).

The new orders index fell to -10.2 in October from 9.4 in September. A lessened 29.8% of respondents reported higher orders while an increased 40% reported order declines. The shipments index fell to -2.7 from 17.9. The unfilled orders index dropped to -2.2 from 2.1 in September. Delivery times lengthened as the index fell to -3.2 from -1.1. Inventories weakened this month to -7.5 from a break-even level of zero in September.

Labor market conditions were greatly improved in October. The employment index of 4.1 compared to -5.7 in September. It was the first month above the break-even level of 50 in twelve months. An increased 12.7% of respondents reported increases in employment while a lessened 8.6% reported lower employment. The hours-worked index increased to 4.7 after rising to 2.9 in September. It was only the second positive reading following ten months where it stood below zero.

Inflation pressures increased this month. The prices paid index rose to 29.0 after easing to 23.2 in September and falling to 23.4 in August. A higher 33.3% of respondents were paying higher input prices, while a greatly reduced 4.3% reported paying lower input prices. The prices received index also rose to 10.8 from 7.4 in September. It was the highest level since May as 17.2% of respondents reported an increase in prices while 6.5% reported price declines.

Companies grew more optimistic about the outlook in October. The index for future business conditions of 38.7 this month compared to 30.6 in September, and was the highest level since October 2021. The outlook for shipments, unfilled orders, vendor performance and employment improved, but new orders eased. The future prices paid index slipped just slightly from its highest level since February 2023, but capital spending plans rebounded sharply.

The headline index reflects the answer to only one question concerning general business conditions and is not calculated from the components. The indexes in this report are diffusion indexes and measure the percentage of respondents indicating an increase minus the percentage indicating a decrease.

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

241015L11.jpg

241015M11.jpg

- Factory sector indicator declines to five-month low.
- New orders & shipments lead decline, while employment increases.
- Prices paid & received continue to strengthen.

U.S. Empire State Factory Index Returns to Negative Territory in October

241014A.jpg

241014D.jpg

The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) increased 3.2% (3.7% y/y) during the four weeks ended October 11, 2024, the same as it did four weeks earlier.

Prices in the Metals group led the rise and increased 8.0% (15.8% y/y) over the most recent four weeks. Zinc prices gained 13.4% (25.5% y/y) in four weeks and aluminum prices rose 10.2% (18.2% y/y). Copper scrap prices rose 7.1% in four weeks (21.5% y/y), while tin prices gained 6.7% (35.6% y/y) in four weeks. Also, lead prices firmed 5.8% in four weeks (-4.2% y/y) and steel scrap prices rose 5.9% (6.0% y/y) over four weeks.

Crude Oil & Benzene group prices increased 2.7% (-9.1% y/y) in the latest four weeks. The cost of West Texas Intermediate crude oil rose 10.6	% in four weeks to $74.85 per barrel, but was 11.2% lower y/y. The cost of the petro-chemical benzene, used for making plastics & synthetic fibers, fell 5.6% (-23.1% y/y) in the last four weeks. Excluding crude oil, the industrial commodity price index rose 2.8% (4.6% y/y) in the latest four-week period.

Textile group prices rose 1.3% (-1.3% y/y) over the same four week period. Cotton prices rose 6.3% (-18.0% y/y) in four weeks. The cost of burlap posted a 2.6% rise (18.3% y/y) during the last four weeks.

Prices in the Miscellaneous group improved 0.9% during the last four weeks and were up 4.5% y/y. The cost of natural rubber rose 5.0% in four weeks and jumped 81.0% y/y. Plywood prices improved 3.2% over the last four weeks (5.1% y/y).

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

**Thoughts on the Economy and Policy Rules at the Federal Open Market Committee** by Fed Governor Christopher J. Waller can be found [here](https://www.federalreserve.gov/newsevents/speech/waller20241014a.htm).

241014B.jpg

241014C.jpg

- Metals prices surge for second consecutive period.	
- Increasing crude oil costs push energy price index higher.
- Textile prices continue to increase.

FIBER: Industrial Commodity Prices Strengthen Broadly in Latest Four Weeks

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

Positive US economic data surprises leading to upward adjustment of interest rate expectations

Recent aggressive policy easing in China has given a massive boost to equity prices

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

250402J4.jpg

250402K4.jpg

The ADP National Employment Report indicated that nonfarm private sector payrolls rose 155,000 (1.4% y/y) during March after increasing 84,000 in February, revised from 77,000, and 186,000 in January. The increase remained below the 221,000 high in October of last year. A 116,000 March rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" eased to 4.6% y/y from 4.7% y/y in the prior two months and compared to 5.0% y/y one year earlier. It remained below a September 2022 high of 7.8% y/y. Manufacturing sector pay grew 4.8% y/y while construction sector pay improved 4.7% y/y. Natural resource & mining sector pay grew 4.3% y/y. Financial sector pay rose 5.3% y/y while education & health services pay rose 4.7% y/y. Leisure & hospitality pay also increased 4.7% y/y. Professional & business service sector pay increased 4.4% y/y and trade, transportation & utilities pay rose 4.3% y/y. Information pay rose 4.0% y/y. Median annual pay for “job changers” rose 6.5% y/y after 6.8% y/y growth in February and stood below a 16.1% y/y high in April 2022.

Small business hiring (less than 50 employees) rose 52,000 (0.7% y/y) in March, following no change in February. Employment at medium-sized firms (50-499,000 employees) rose 43,000 (1.1% y/y) after increasing 53,000 in February. Large business hiring (500+ employees) rose 59,000 (3.6% y/y) last month following a 33,000 February rise.

Goods-producing employment rose 24,000 (1.3% y/y), after rising 40,000 in February. Factory sector employment rose 21,000 (-0.2% y/y) following a 15,000 rise. The number of construction sector jobs rose 6,000 (3.6% y/y), following a 26,000 February increase. Natural resource & mining jobs fell 3,000 (+1.9% y/y), after a 1,000 decline.

The number of service-producing jobs rose 132,000 (1.4% y/y) last month, following a 43,000 February gain. Professional & business services employment grew 57,000 (0.7% y/y) last month following a 22,000 February increase. Employment in the financial industry rose 38,000 (2.0% y/y) after a 24,000 rise. Leisure and hospitality employment increased 17,000 (2.9% y/y), following a 47,000 February increase. Employment in “other” services rose 11,000 (3.5% y/y) in March, following an 18,000 gain in February. The number of education & health care jobs improved 12,000 (1.8% y/y), after a 25,000 decline during February. Information sector employment rose 3,000 (0.2% y/y) last month after a 12,000 decline. The number of jobs in trade, transportation & utilities fell 6,000 (+0.4% y/y) in January after a 31,000 decline during February.

By region, employment in the Northeast increased 89,000 (2.0% y/y) last month, after rising 40,000 in February. Employment in the Midwest rose 81,000 (1.4% y/y) following a 62,000 gain in February. In the South, employment increased 27,000 (1.4% y/y) following a 17,000 gain, but in the West, employment fell 41,000 (+0.6% y/y) in March, after a 32,000 February decline.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

250402L4.jpg

250402M4.jpg

- Employment increase is strong in both services & factory sectors.
- Wage growth for “job stayers” and “job changers” moderates.
- Small business employment recovers; hiring at medium-sized firms slows.

U.S. ADP Payroll Gain Rebounds in March; Pay Growth Eases

Winnie Tapasanun

250402F10.jpg

250402G10.jpg

Total factory orders rose a slightly more-than-expected 0.6% m/m (2.5% y/y) in February after a 1.8% gain in January and a 0.6% decline in December, data from the U.S. Census Bureau showed. A 0.5% m/m February increase had been expected in the Action Economics Forecast Survey. The February reading was the second successive monthly rise after m/m decreases in four of the prior five months. Notably, orders for nondefense aircraft & parts fell 5.0% in February following a 92.9% surge in January. Factory orders excluding defense rose 0.5% (2.0% y/y) after a 1.9% January rebound. Factory orders excluding the transportation sector grew 0.4% (1.8% y/y), the sixth consecutive m/m gain, on top of a 0.3% January increase.

Durable goods orders rose 1.0% (3.4% y/y) in February after a 3.4% rebound in January (in line with a 0.9% m/m rise in the advance report on March 26). The February rise reflected m/m orders increases of 1.9% (5.1% y/y) in electrical equipment, appliances & components, 1.5% (6.2% y/y) in transportation equipment, 1.2% (4.2% y/y) in primary metals, 0.9% (1.8% y/y) in fabricated metal products, 0.6% (0.4% y/y) in machinery, and 0.4% (-0.3% y/y) in furniture & related products. Meanwhile, durable goods orders for computers & electronic products were virtually unchanged m/m (4.6% y/y) in February following a 1.8% gain in January.

Nondurable goods orders, which equal nondurable goods shipments, rose 0.3% (1.6% y/y) in February, the fifth straight m/m rise, after a 0.3% increase in January. The February rise reflected m/m gains of 2.1% (1.0% y/y) in textile mills, 1.9% (1.2% y/y) in leather & allied products, 1.5% (-1.0% y/y) in textile products, 1.4% (-1.8% y/y) in apparel, 0.8% (6.0% y/y) in chemical products, 0.5% (0.1% y/y) in plastics & rubber products, 0.4% (-5.3% y/y) in petroleum & coal products, and 0.3% (4.0% y/y) in printing. To the downside, the following nondurable goods shipments fell m/m in February: beverage & tobacco products (-0.6%; +6.7% y/y), paper products (-0.3%; +1.9% y/y), and food products (-0.2%; +2.1% y/y).

Total shipments rose 0.7% (2.6% y/y) in February, the fourth successive m/m rise, after a 0.5% gain in January. Excluding transportation, shipments grew 0.4% (1.6% y/y), up for the sixth consecutive month, on top of a 0.3% January increase. Shipments of durable goods industries advanced 1.2% (3.6% y/y) in February, the third straight m/m gain, after a 0.7% rise in January. This reflected m/m durable goods shipments rises of 2.1% (7.9% y/y) in transportation equipment, 1.5% (3.9% y/y) in primary metals, 1.2% (3.6% y/y) in computers & electronic products, 0.8% (3.6% y/y) in miscellaneous durable goods, 0.7% (0.1% y/y) in machinery, 0.6% (3.2% y/y) in electrical equipment, appliances & components, 0.6% (1.1% y/y) in fabricated metal products, and 0.5% (-1.3% y/y) in nonmetallic mineral products. In contrast, these durable goods shipments fell m/m in February: furniture & related products (-0.5%; -0.6% y/y) and wood products (-0.5%; -1.6% y/y).

Unfilled orders increased 0.1% (0.7% y/y) in February, up for the seventh month in eight, after a 0.2% increase in January. Excluding transportation, unfilled orders edged up 0.1% (0.7% y/y) in February for the third successive month. Backlogs of durable goods increased 0.1% (0.7% y/y) in February, reflecting m/m rises of 0.7% (2.3% y/y) in electrical equipment, appliances & components and 0.2% (0.6% y/y) in transportation equipment.

Inventories inched up 0.1% (0.9% y/y) in February, the fourth consecutive m/m increase, after rising at the same pace in January. Excluding transportation, inventories were up 0.1% (0.4% y/y) in February, the fourth straight m/m rise. Durable goods inventories ticked up 0.1% (0.9% y/y) in February after holding steady in January; nondurable goods inventories rose 0.3% (0.8% y/y), the fourth successive m/m rise.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

250402H10.jpg

250402I10.jpg

- Manufacturers’ new orders +0.6% (+2.5% y/y) in Feb.; +1.8% (+3.3% y/y) in Jan.
- Durable goods orders (+1.0%), nondurable goods orders (+0.3%), and shipments (+0.7%) all increase m/m.
- Unfilled orders up 0.1%, the seventh m/m rise in eight months.
- Inventories up 0.1%, the fourth straight m/m increase.

U.S. Factory Orders Rise in February for the Second Consecutive Month

250402A20.jpg

250402B20.jpg

Mortgage applications fell 1.6% (+24.5% y/y) in the week ended March 28, after declining 2.0% (+25.8% y/y) in the week ended March 21, according to the Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey. Applications for loans to purchase a home rose 1.5% (8.7% y/y) in the latest week, following a rise of 0.7% (6.9% y/y) in the prior week. Applications to refinance existing mortgages declined 5.6% (+56.6% y/y) in the week ended March 28, after a decline of 5.3% (+63.2% y/y) in the week ended March 21.

The effective interest rate on a 30-year fixed rate loan remained unchanged at 6.88% in the week ended March 28 from the prior week. The effective rate on a 15-year fixed rate loan declined 6bps to 6.19% in the week ended March 28 from 6.25% in the March 21 week. The rate on a 30-year jumbo loan edged down 2bps to 6.90% in the latest week from 6.92% in the week ended March 21, while the rate on a 5-year ARM rose 16bps to 6.26% in the latest week from 6.10% in the week ended March 21.

The share of applications to refinance an existing mortgage fell to 38.6% in the week ended March 28 from 40.4% in the week ended March 21. That share had reached a low level of 38.7% in the week of February 14. The share of loans that have an adjustable rate rose to 6.5% in the latest week, up from 6.3% in the prior week.

The average size of a mortgage loan edged down 0.3% (+0.3% y/y) to $396,600 in the week ended March 28, following a decline of 1.0% (+2.8% y/y) to $397,900 in the week ended March 21. The average size of a loan to purchase a home was $447,500 in the latest week, up 1.1% (-1.2% y/y) from $442,800 the week before. The average size of a loan to refinance an outstanding mortgage declined 4.8% (+19.8% y/y) to $315,700 in the week ended March 28 from $331,700 in the week ended March 21.

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.

- Applications for loans to purchase rose, while applications for loans to refinance declined.
- Fixed mortgage rates are range-bound.
- Decline in average loan size continues for the third consecutive week.

Mortgage Applications Fell in Latest Week

Robert Brusca

250402E.jpg

The median reading for the 18 early reporting manufacturing sectors in the table (17 countries plus the euro area) is lower in March at 48.7 from 49.5 in February. Also, in March the diffusion (breadth) of reporters showing month-to-month improvement fell to 33.3% from 66.7% in February and 61.1% in January. However, diffusion over broader periods (3-mo vs. 6-mo; 6-mo vs. 12-mo and 12-mo vs. 12-mo ago) shows diffusion has been steadily at and above the 60% mark (them as point-to-point diffusion changes). And on those timelines, the median reading for the 12-month average is at 49.8, the 6-month average is at 49.3, and the 3-month average is at 48.7. Despite improving diffusion, the median reading has been slipping, but the slippage has been extremely slow. For the United States, France, Germany and the euro area - as a block - these three, blocs of time show diffusion improving in 10 of the twelve segments, the two deteriorating segments are for comparison with a year ago in the U.S. and comparisons between the 6-month average and the 12-month average for France. All four reporters show improvement in three-months compared to six-months, based on average data. By comparison, the four BRIC countries show only two improvements among the 12 possibilities, and only India shows improvement in three-months compared to six-months.

According to breath, this is ongoing improvement. But median data are not confirming the trend. It’s just another example of how small the current changes are and how the data can show small changes over periods as long as a year, when in reality all we are experiencing are gyrations, and little change in an essentially static environment.

The queue standings (rankings) show only seven of 18 reporters at or above the 50% mark; this is the demarcation line for the median on these ranked data. So, over the last four years data, are arrayed with slightly less than half above and slightly more than half below their respective medians. However, the median reading of these rankings makes it clear that data tilt to the weak side at a 45-percentile standing. On data from January 2021 to date, all March 2025 readings are lower on balance (except India-and that exception is on a small margin, +0.3 points).

In that table, I look at various groups: BRICS, Asia, and a group of the more advanced countries (U.S., U.K., EMU, Canada & Japan); each of them shows very little movement.

However, we have a world with a great deal of change in train, especially changes thrust on Europe by changing U.S. policy to put more of Europe’s own security provision in Europe’s on hands. This is going to ramp up spending and should cause economies to heat up in the year ahead or more. Such a change could spur PMI values, economic growth, stimulate the inflation environment, and alter monetary policy itself. There is change in progress that we can see coming but has not been reflected in this month’s report.

250402.jpg

Global MFG PMIs Erode in March

250401F5.jpg

250401G5.jpg

The light vehicle market continued to improve last month, with sales rising to the highest level in four years. U.S. light vehicle sales rose 10.4% (11.8% y/y) to 17.76 million units (SAAR) in March after rising 3.8% to 16.09 million in February. The rise in March vehicle sales accompanied a 1.8% y/y rise in real disposable income through February, which compared to 2.0% growth in 2024.

Sales improvement was broad-based last month. Light truck sales rose 12.1% (13.2% y/y) during March to 14.46 million units (SAAR), after increasing 3.3% in February. Purchases of domestically-made light trucks surged 12.4% (13.1% y/y) to 11.05 million units, after rising 3.3% in February. Sales of imported light trucks jumped 10.7% (13.0% y/y) to 3.40 million units, following February’s 3.4% rise.

Trucks’ 81.4% share of the light vehicle market last month compared to 80.2% in February and set a new record. The share was 80.3% during all of 2024 and 53.3% ten years earlier.

Auto sales also rose last month, by 3.8% (8.2% y/y) to 3.31 million units (SAAR) following a 6.0% February increase. Sales of cars moved to the highest level since July 2021. Purchases of domestically-produced cars rose 3.4% (12.3% y/y) last month to 2.46 million units, after rising 9.2% in February. Sales of imported autos gained 4.9% (-7.6% y/y) to 0.85 million units, following a 2.4% February decrease.

Imports' share of the U.S. light vehicle market eased to 23.9% in March from 24.1% in February. It compared to a May 2023 low of 22.9% before it reached a high of 26.3% in November of 2023. Imports' share of the passenger car market rose to 25.7% last month from 25.4% in February. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.5% in March after holding at 23.8% in February.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

250401H5.jpg

250401I5.jpg

U.S. Light Vehicle Sales Surge in March