Tom Moeller

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The National Association of Realtors (NAR) reported that
pending home sales during October declined 2.6% to the lowest level since July
2014. Sales were off 6.7% y/y and the fall reversed a little-revised September
rise. The index level fell to 102.1 in October (2001=100) which was 9.6% below
the peak in April 2016.

The decline in pending home sales was paced by an 8.9% fall
(-15.3% y/y) in the West to the lowest level since September 2007. Pending home
sales in the Midwest declined 1.8% (-4.9% y/y) to the weakest level in six
months. In the South, pending home sales fell 1.1% (-4.6% y/y) and were at the
lowest level since September of last year. Increasing by 0.7% (-2.9% y/y) were
pending home sales in the Northeast. They remained 8.2% below the February 2017 high.

The pending home sales index measures sales at the time the
contract for an existing home is signed, analogous to the Census Bureau's new
home sales data. In contrast, the National Association of Realtors' existing
home sales data are recorded when the sale is closed. In developing the pending
home sales index, the NAR found that the level of monthly sales contract
activity parallels the level of closed existing home sales in the following two
months. The series dates back to 2001, and the data are available in Haver's PREALTOR database.

<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Pending Home Sales (SA,
 2001=100)</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Oct Y/Y %</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >102.1</td>
 <td >104.8</td>
 <td >104.1</td>
 <td >-6.7</td>
 <td >109.0</td>
 <td >109.8</td>
 <td >108.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Northeast</td>
 <td >92.9</td>
 <td >92.3</td>
 <td >92.7</td>
 <td >-2.9</td>
 <td >97.2</td>
 <td >96.4</td>
 <td >90.8</td>
 </tr>
 <tr>
 <td class="firstcol" >Midwest</td>
 <td >100.4</td>
 <td >102.2</td>
 <td >101.2</td>
 <td >-4.9</td>
 <td >104.8</td>
 <td >107.4</td>
 <td >107.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >South</td>
 <td >118.9</td>
 <td >120.2</td>
 <td >121.3</td>
 <td >-4.6</td>
 <td >123.8</td>
 <td >122.9</td>
 <td >123.1</td>
 </tr>
 <tr>
 <td class="firstcol" >West</td>
 <td >84.8</td>
 <td >93.1</td>
 <td >89.1</td>
 <td >-15.3</td>
 <td >99.6</td>
 <td >102.4</td>
 <td >102.2</td>
 </tr>
 </tbody>
 </table>
 
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The National Association of Realtors (NAR) reported that pending home sales during October declined 2.6% to the lowest level since July 2014. Sales were off 6.7% y/y and the fall reversed a little-revised September rise. The index [...]

U.S. Pending Home Sales Decline to Four-Year Low

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Individuals seized the opportunity presented by improved
earnings and easier pricing power to ramp up spending. Personal income rose 0.5%
during October (4.3% y/y) following an unrevised 0.2% September gain. A 0.4%
increase was expected in the Action Economics Forecast Survey. Leading last month's strength was a 1.6%
jump (5.3% y/y) in proprietors' income as it rebounded from a 0.8% drop during
September. Wages &amp; salaries rose a steady 0.3% (4.4% y/y), slower than gains
during the summer. Income from assets improved 0.4% (4.3 y/y) after a 0.1%
uptick. It reflected a 0.5% dividend increase (3.8% y/y) and a 0.3% gain (4.6% y/y) in interest income.
Rental income increased 0.4% (4.5% y/y) after stronger increases in the prior
three months. Transfer payments rose 0.6% (4.4% y/y) reflecting a 1.0%
strengthening (5.2% y/y) of social security payments, the largest increase since
March. Medicare receipts rose 0.9% (6.8% y/y) and Medicaid income increased 0.6%
(4.8% y/y). These strong gains were offset by a 2.4% decline (+11.9% y/y) in
veterans benefits and a 2.1% drop (-16.4% y/y) in unemployment insurance benefits.

Personal consumption expenditures strengthened 0.6% last
month (5.0% y/y) after a 0.2% September rise, revised down from 0.4%. It was the
largest increase since March. A 0.4% rise had been
expected. A 0.7% increase (5.2% y/y) in services
outlays led the rise, the strongest increase since April 2016. Spending on
housing &amp; utilities rose 1.0% (4.9% y/y) as did financial services &amp;
insurance payments (5.4% y/y). Recreation services spending increased 0.5% (4.5% y/y) while
spending at restaurants gained 0.3% (6.1% y/y). Health care outlays rose 0.3%
(4.2% y/y), the weakest increase since February. Outlays on nondurable goods
increased 0.6% (5.4% y/y) as fuel outlays rose 1.9% (15.1% y/y) with higher
prices. Clothing spending gained 0.5% (4.6% y/y) and spending at restaurants
rose 0.1% (3.5% y/y). Durable goods outlays increased 0.5% (2.7% y/y) led by a
0.7% rise (-1.8% y/y) in motor vehicle spending. Recreational goods &amp;
vehicle spending rose 0.5% (5.6% y/y) and home furnishings &amp; appliance
outlays gained 0.2% (4.9% y/y).

The personal savings rate eased to 6.2%, the lowest level
since December. It has been falling steadily since the February high of 7.4%. The level of personal
savings fell 1.0% y/y.

The personal consumption chain price index rose 0.2% (2.0% y/y)
after four straight monthly increases. The index excluding food &amp; energy
rose 0.1%. The 1.8% y/y increase was the weakest since February and below the
2.0% rise three months earlier. The durable goods price index rose 0.1% (-1.4%
y/y) following two months of decline. Recreational goods &amp; vehicle prices
fell 0.4% (-4.4% y/y) and &quot;other&quot; durable goods prices declined 1.0%
(-3.4% y/y). Motor vehicle prices rose 0.6% both m/m and y/y and reversed
September's decline. The nondurable goods price index gained 0.3% (2.0% y/y).
Clothing prices eased 0.2% (-0.4% y/y) for the fourth month in the last five and
food &amp; beverage costs slipped 0.2% (+0.3% y/y). These declines were offset
by a 2.9% jump (16.3% y/y) in gasoline &amp; other energy product costs.
Services prices rose 0.2% (2.5% y/y) led by a 0.4% gain (3.1% y/y) in housing &amp;
utility costs. Health care prices eased 0.1% (+1.4% y/y) and food service &amp; accommodations
prices fell 0.2% (+1.8% y/y).

The personal income and consumption figures are available in
Haver's USECON database with detail in the USNA database. The
Action Economics figures are in the AS1REPNA database.

The minutes to the latest FOMC meeting can be found
<a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20181108.pdf">here</a>.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Personal Income &amp; Outlays
 (%)</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Oct Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Personal Income</td>
 <td >0.5</td>
 <td >0.2</td>
 <td >0.4</td>
 <td >4.3</td>
 <td >4.4</td>
 <td >2.6</td>
 <td >4.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Wages &amp; Salaries</td>
 <td >0.3</td>
 <td >0.3</td>
 <td >0.5</td>
 <td >4.4</td>
 <td >4.6</td>
 <td >2.9</td>
 <td >5.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Disposable Personal Income</td>
 <td >0.5</td>
 <td >0.2</td>
 <td >0.4</td>
 <td >4.8</td>
 <td >4.4</td>
 <td >2.8</td>
 <td >4.4</td>
 </tr>
 <tr>
 <td class="firstcol" >Personal Consumption Expenditures</td>
 <td >0.6</td>
 <td >0.2</td>
 <td >0.4</td>
 <td >5.0</td>
 <td >4.3</td>
 <td >3.8</td>
 <td >4.0</td>
 </tr>
 <tr>
 <td class="firstcol" >Personal Saving Rate</td>
 <td >6.2</td>
 <td >6.3</td>
 <td >6.3</td>
 <td >6.5 
 (Oct.'17)</td>
 <td >6.7</td>
 <td >6.7</td>
 <td >7.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >PCE Chain Price Index</td>
 <td >0.2</td>
 <td >0.1</td>
 <td >0.1</td>
 <td >2.0</td>
 <td >1.8</td>
 <td >1.1</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;Less Food &amp; Energy</td>
 <td >0.1</td>
 <td >0.2</td>
 <td >0.0</td>
 <td >1.8</td>
 <td >1.6</td>
 <td >1.7</td>
 <td >1.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Real Disposable Income</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >0.3</td>
 <td >2.8</td>
 <td >2.6</td>
 <td >1.7</td>
 <td >4.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Real Personal Consumption Expenditures</td>
 <td >0.4</td>
 <td >0.1</td>
 <td >0.3</td>
 <td >2.9</td>
 <td >2.5</td>
 <td >2.7</td>
 <td >3.7</td>
 </tr>
 </tbody>
 </table>
 
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Individuals seized the opportunity presented by improved earnings and easier pricing power to ramp up spending. Personal income rose 0.5% during October (4.3% y/y) following an unrevised 0.2% September gain. A 0.4% increase was [...]

U.S. Personal Income and Spending Heat Up; Core Pricing Cools

Gerald D. Cohen

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Initial claims for unemployment insurance increased to 234,000 (-2.1% y/y) during the week ended November 24 from an unrevised 224,000 in the previous week. This is the highest number of initial claims since mid-May, though claims still remain very low by historical standards. While the data is adjusted for seasonal factors, the Thanksgiving holiday may have affected this reading. The Action Economics Forecast Survey expected 217,000 claims. The four-week moving average of initial claims rose to 223,250, a four-month high.

Continuing claims for unemployment insurance rose 50,000 to 1.710 million (-12.1% y/y) in the week ending November 17, from the slightly downwardly revised 1.660 million in the prior week. This is the highest reading since late August. The four-week moving average of claimants increased to 1,667,750.

The insured rate of unemployment remained at 1.2%. It had declined to a record low 1.1% for a brief period in October. Data on the insured unemployment rate go back to 1971.

Insured rates of unemployment vary widely by state. During the week ending November 10, the lowest rates were in South Dakota (0.26%), Nebraska (0.34%), North Dakota (0.41%), North Carolina (0.42%) and Tennessee (0.47%). The highest rates were in Pennsylvania (1.46%), Connecticut (1.60%), California (1.61%), New Jersey (2.03%), and Alaska (2.64%). Among the other largest states by population, the rate was 0.86% in Texas, 0.49% in Florida and 1.26% in New York. These state data are not seasonally adjusted.


Data on weekly unemployment claims going back to 1967 are
contained in Haver's WEEKLY database, and they are summarized monthly in USECON.
Data for individual states are in REGIONW. The expectations figure is from the Action
Economics Forecast Survey, carried in the AS1REPNA database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" >Unemployment Insurance (SA, 000s)</th>
 <th>11/24/18</th>
 <th>11/17/18</th>
 <th>11/10/18</th>
 <th>Y/Y %</th>
 <th>2017</th>
 <th>2016</th>
 <th>2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Initial Claims</td>
 <td >234</td>
 <td >224</td>
 <td >221</td>
 <td >-2.1</td>
 <td >245</td>
 <td >263</td>
 <td >278</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Continuing Claims</td>
 <td >--</td>
 <td >1,710</td>
 <td >1,660</td>
 <td >-12.1</td>
 <td >1,961</td>
 <td >2,136</td>
 <td >2,267</td>
 </tr>
 <tr>
 <td class="firstcol" >Insured Unemployment Rate (%)</td>
 <td >--</td>
 <td >1.2</td>
 <td >1.2</td>
 <td >
 1.4 
 (Nov. 2017)
 </td>
 <td >1.4</td>
 <td >1.6</td>
 <td >1.7</td>
 </tr>
 </tbody>
 </table>
 
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Initial claims for unemployment insurance increased to 234,000 (-2.1% y/y) during the week ended November 24 from an unrevised 224,000 in the previous week. This is the highest number of initial claims since mid-May, though claims [...]

U.S. Initial Claims for Unemployment Insurance Rise to Highest Level Since Mid-May

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The Mortgage Bankers Association reported that its total
Mortgage Applications Index increased 5.5% (-14.4% y/y) last week following
steady declines since early-last month. Purchase loan applications surged 8.8%
(1.3% y/y) after a 3.1% rise, while applications to refinance improved 0.5%
(-34.6% y/y) following a 5.0% fall.

The effective interest rate on a 15-year fixed-rate mortgage
was little changed w/w at 4.65%, but remained up sharply from 3.01% averaged in
July 2016. The effective rate on a 30-year fixed-rate loan also was steady at
5.26%. The rate on a Jumbo 30-year loan was unchanged at 4.97% and for
adjustable 5-year mortgages, the effective interest rate was little-changed at 4.44%.

The average mortgage loan size increased to $294,500 (2.7%
y/y). For purchases, the average loan size of $313,100 (-1.7% y/y) compared to
$264,200 (4.3% y/y) for refinancings.

Applications for fixed-rate loans fell 16.0% y/y while
applications for adjustable-rate loans increased 8.4% y/y.

The survey covers over 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 SURVEYW database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >MBA Mortgage
 Applications (%, SA)</th>
 <th scope="col" >11/23/18</th>
 <th scope="col" >11/16/18</th>
 <th scope="col" >11/09/18</th>
 <th scope="col" >Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Total Market Index</td>
 <td >5.5</td>
 <td >-0.1</td>
 <td >-3.2</td>
 <td >-14.4</td>
 <td >-17.8</td>
 <td >15.6</td>
 <td >17.9</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Purchase</td>
 <td >8.8</td>
 <td >3.1</td>
 <td >-2.3</td>
 <td >1.3</td>
 <td >5.6</td>
 <td >13.3</td>
 <td >15.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Refinancing</td>
 <td >0.5</td>
 <td >-5.0</td>
 <td >-4.3</td>
 <td >-34.6</td>
 <td >-34.0</td>
 <td >17.3</td>
 <td >19.7</td>
 </tr>
 <tr>
 <td class="firstcol" >15-Year Mortgage Effective
 Interest Rate (%)</td>
 <td >4.65</td>
 <td >4.66</td>
 <td >4.71</td>
 <td >3.65 (Nov'17)</td>
 <td >3.59</td>
 <td >3.22</td>
 <td >3.47</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The Mortgage Bankers Association reported that its total Mortgage Applications Index increased 5.5% (-14.4% y/y) last week following steady declines since early-last month. Purchase loan applications surged 8.8% (1.3% y/y) after a [...]

U.S. Mortgage Loan Applications Increase; Interest Rates Remain Elevated

Carol Stone, CBE

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The market for new homes is continuing to weaken. New single-family home sales fell 8.9% (-12.0% y/y) in October to 544,000 (SAAR). It was the fourth decrease in the last five months and carried sales down to their lowest since March 2016. Revisions to previous months’ sales were positive, however: those in September, originally reported at 553,000, were revised to 597,000, and those in August, which had been reported last month at 585,000, were revised to 591,000. The October result did undershoot the expectations in the Action Economics Forecast Survey, which had estimated 585,000 sales. These sales transactions are recorded when sales contracts are signed or deposits are made.

The median price of a new home fell 3.6% (-3.1% y/y) in October to $309,700 from $321,300 in September. The average price of a new home rose, however, to $395,000 (+0.3% y/y) from $379.000 in September.

By region, the largest percentage decline last month was in the Midwest, where sales fell 22.1% (-16.7% y/y) to 60,000. Those in the Northeast dropped 18.5% m/m (-46.3% y/y) to 22,000. In the South, sales were off 7.7% in October (-11.6% y/y) to 313,000, while those in the West eased 3.2% (-6.3% y/y) to 149,000.

The months' supply of homes on the market increased to 7.4 in October from 6.5 months during September. These figures were up sharply from the recent low of 4.5 months in July 2016. The median number of months a new home was on the market after its completion edged down from 2.9 in September to 2.7 in October; this is the shortest for-sale period in the history of this series, which dates from 1975.

The data in this report are available in Haver's USECON database.
The consensus expectation figure from Action Economics is available in the AS1REPNA database.

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 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >U.S. New Single-Family
 Home Sales (SAAR, 000s)</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Oct Y/Y %</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >544</td>
 <td >597</td>
 <td >591</td>
 <td >-12.0</td>
 <td >616</td>
 <td >560</td>
 <td >502</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Northeast</td>
 <td >22</td>
 <td >27</td>
 <td >33</td>
 <td >-46.3</td>
 <td >40</td>
 <td >32</td>
 <td >25</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Midwest</td>
 <td >60</td>
 <td >77</td>
 <td >67</td>
 <td >-16.7</td>
 <td >72</td>
 <td >69</td>
 <td >61</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; South</td>
 <td >313</td>
 <td >339</td>
 <td >336</td>
 <td >-11.6</td>
 <td >341</td>
 <td >317</td>
 <td >286</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West&nbsp;</td>
 <td >149</td>
 <td >154</td>
 <td >155</td>
 <td >-1.3</td>
 <td >164</td>
 <td >142</td>
 <td >130</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Median Price (NSA, $) </td>
 <td >309,700</td>
 <td >321,300</td>
 <td >323,800</td>
 <td >-3.1</td>
 <td >321,633</td>
 <td >306,500</td>
 <td >293,733</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The market for new homes is continuing to weaken. New single-family home sales fell 8.9% (-12.0% y/y) in October to 544,000 (SAAR). It was the fourth decrease in the last five months and carried sales down to their lowest since March [...]

U.S. New Home Sales and Prices Remain Sluggish

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The market for new homes is continuing to weaken. New single-family home sales fell 8.9% (-12.0% y/y) in October to 544,000 (SAAR). It was the fourth decrease in the last five months and carried sales down to their lowest since March 2016. Revisions to previous months' sales were positive, however: those in September, originally reported at 553,000, were revised to 597,000, and those in August, which had been reported last month at 585,000, were revised to 591,000. The October result did undershoot the expectations in the Action Economics Forecast Survey, which had estimated 585,000 sales. These sales transactions are recorded when sales contracts are signed or deposits are made.

The median price of a new home fell 3.6% (-3.1% y/y) in October to $309,700 from $321,300 in September. The average price of a new home rose, however, to $395,000 (+0.3% y/y) from $379.000 in September.

By region, the largest percentage decline last month was in the Midwest, where sales fell 22.1% (-16.7% y/y) to 60,000. Those in the Northeast dropped 18.5% m/m (-46.3% y/y) to 22,000. In the South, sales were off 7.7% in October (-11.6% y/y) to 313,000, while those in the West eased 3.2% (-6.3% y/y) to 149,000.

The months' supply of homes on the market increased to 7.4 in October from 6.5 months during September. These figures were up sharply from the recent low of 4.5 months in July 2016. The median number of months a new home was on the market after its completion edged down from 2.9 in September to 2.7 in October; this is the shortest for-sale period in the history of this series, which dates from 1975.

The data in this report are available in Haver's USECON database.
The consensus expectation figure from Action Economics is available in the AS1REPNA database.

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 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >U.S. New Single-Family
 Home Sales (SAAR, 000s)</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Aug</th>
 <th scope="col" >Oct Y/Y %</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >544</td>
 <td >597</td>
 <td >591</td>
 <td >-12.0</td>
 <td >616</td>
 <td >560</td>
 <td >502</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Northeast</td>
 <td >22</td>
 <td >27</td>
 <td >33</td>
 <td >-46.3</td>
 <td >40</td>
 <td >32</td>
 <td >25</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Midwest</td>
 <td >60</td>
 <td >77</td>
 <td >67</td>
 <td >-16.7</td>
 <td >72</td>
 <td >69</td>
 <td >61</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; South</td>
 <td >313</td>
 <td >339</td>
 <td >336</td>
 <td >-11.6</td>
 <td >341</td>
 <td >317</td>
 <td >286</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West&nbsp;</td>
 <td >149</td>
 <td >154</td>
 <td >155</td>
 <td >-1.3</td>
 <td >164</td>
 <td >142</td>
 <td >130</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Median Price (NSA, $) </td>
 <td >309,700</td>
 <td >321,300</td>
 <td >323,800</td>
 <td >-3.1</td>
 <td >321,633</td>
 <td >306,500</td>
 <td >293,733</td>
 </tr>
 </tbody>
 </table>
 
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Real gross domestic product increased 3.5% (AR, 3.0% y/y)
during Q3'18, unrevised from the advance estimate. It followed a 4.2% rise
during the second quarter. A 3.6% advance had been expected in the Action
Economics Forecast Survey.

Accompanying the report was the initial indication of
after-tax corporate profits, which rose 3.3% (19.4% y/y) including adjustments
for inventory valuation and depreciation. The rise followed 2.1% growth in the
second quarter. Profits without inventory &amp; depreciation allowances rose
0.7% (5.9% y/y) following a 3.3% Q2 increase. Domestic nonfinancial sector
earnings grew 5.1% (15.8% y/y) but financial sector earnings eased 1.7% (-9.0%
y/y). Foreign sector profits increased 3.7% (8.7% y/y).

Growth in domestic final sales of 3.1% (3.3% y/y) was
unrevised. Personal consumption expenditures was lessened to 3.6% (3.0% y/y)
from 4.0%. Spending of durable goods was reduced to 3.9% (5.6% y/y) from 6.9% as
motor vehicle purchases fell 1.5% (+1.6% y/y) instead of rising modestly.
Recreational vehicle purchases growth was reduced to 9.1% (9.4% y/y) and
spending growth on home furnishings of 6.8% (6.5% y/y) was revised slightly
lower. Nondurable goods purchases surged 5.3% (3.3% y/y) which was
little-revised. Clothing purchases strengthened 11.2% (5.3% y/y), the quickest
growth since Q4'05, and food &amp; beverages expenditures rose an improved 3.8%
(3.7% y/y). Gasoline &amp; fuel oil buying declined 1.2% (-0.4% y/y). Spending
on services improved a little-revised 3.1% (2.4% y/y). It remained the quickest
growth since early 2015. Outlays at restaurants surged 7.0% (4.2% y/y) which
followed an 8.1% Q2 rise. Together these growth rates are the strongest in 25
years. Health care outlays increased 4.2% (2.5% y/y) and financial services
insurance rose 1.0% (0.4% y/y). Housing &amp; utilities outlays gained 1.1%
(1.5% y/y) but recreation spending eased 0.2% (+0.9% y/y).

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Government sector spending also was reduced to 2.6% (2.3 y/y)
from 3.3%. Federal government outlays grew a steady 3.5% both q/q and y/y.
National defense spending strengthened 4.9% and the 4.2% y/y increase was the
strongest since 2009. Outlays by state &amp; local governments grew a
strengthened 2.0% (1.5% y/y).

Countering the downward revisions was strengthened 2.5%
growth (6.8% y/y) in business fixed investment, initially estimated at 0.8%.
Structures investment is shown to have eased a lessened 1.7% (+6.8% y/y).
Industrial equipment spending advanced 9.8% (4.6% y/y), while information
processing equipment investment grew a strengthened 7.4% (9.7% y/y).
Transportation equipment expenditures declined 3.9% (+5.2% y/y). Investment in
intellectual products was lessened to 4.3% (7.3% y/y).

The fall in residential investment was lessened to 2.6%
(+0.8% y/y) from -4.0%. It remained the third straight quarter of decline.

The chain type GDP prices index was unrevised at an expected
1.7% (2.3% y/y), following a 3.0% increase. The 1.5% rise in the PCE price index
was the weakest in a year, but the business fixed investment price index
remained firm at 1.5% (1.2% y/y), the quickest growth in roughly four years. The
residential investment price index increased 3.6% (5.7% y/y), roughly half the
growth during the prior two quarters.

The GDP figures can be found in Haver's USECON and USNA
database. USNA contains virtually all of the Bureau of Economic Analysis' detail
in the national accounts. Both databases include tables of the newly published
not seasonally adjusted data. The Action Economics consensus estimates can be
found in AS1REPNA.

The Federal Reserve's Framework for Monitoring Financial Stability is the title of today's speech by Fed Chair Jerome H. Powell.
It can be found <a href="https://www.federalreserve.gov/newsevents/speech/powell20181128a.htm">here</a>.

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 
 <tr>
 <th class="firstcol" scope="col" ><a href="http://www.haverselect.com/dlx/USECON/@E7/@E701/@E701.HTM" ;>Chained
 2012 $ (%, AR</a>)</th>
 <th scope="col" >Q3'18 (Second Estimate)</th>
 <th scope="col" >Q3'18 (Advance Estimate)</th>
 <th scope="col" >Q2'18</th>
 <th scope="col" >Q1'18</th>
 <th scope="col" >Q3'18 Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 <tbody>
 <tr>
 <td class="firstcol" >Gross Domestic Product</td>
 <td >3.5</td>
 <td >3.5</td>
 <td >4.2</td>
 <td >2.2</td>
 <td >3.0</td>
 <td >2.2</td>
 <td >1.6</td>
 <td >2.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Inventory Effect</td>
 <td >2.3</td>
 <td >2.1</td>
 <td >-1.2</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >0.0</td>
 <td >-0.5</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Final Sales</td>
 <td >1.2</td>
 <td >1.4</td>
 <td >5.4</td>
 <td >1.9</td>
 <td >2.9</td>
 <td >2.2</td>
 <td >2.1</td>
 <td >2.6</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Foreign Trade Effect</td>
 <td >-1.9</td>
 <td >-1.8</td>
 <td >1.2</td>
 <td >0.0</td>
 <td >-0.4</td>
 <td >-0.3</td>
 <td >-0.3</td>
 <td >-0.8</td>
 </tr>
 <tr>
 <td class="firstcol" >Domestic Final Sales</td>
 <td >3.1</td>
 <td >3.1</td>
 <td >4.0</td>
 <td >1.9</td>
 <td >3.3</td>
 <td >2.5</td>
 <td >2.3</td>
 <td >3.3</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="9" >Demand Components</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Personal Consumption Expenditure</td>
 <td >3.6</td>
 <td >4.0</td>
 <td >3.8</td>
 <td >0.5</td>
 <td >3.0</td>
 <td >2.5</td>
 <td >2.7</td>
 <td >3.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Nonresidential Business Fixed
 Investment</td>
 <td >2.5</td>
 <td >0.8</td>
 <td >8.7</td>
 <td >11.5</td>
 <td >6.8</td>
 <td >5.3</td>
 <td >0.5</td>
 <td >1.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Residential Investment</td>
 <td >-2.6</td>
 <td >-4.0</td>
 <td >-1.4</td>
 <td >-3.4</td>
 <td >0.8</td>
 <td >3.3</td>
 <td >6.5</td>
 <td >10.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Government Spending</td>
 <td >2.6</td>
 <td >3.3</td>
 <td >2.5</td>
 <td >1.5</td>
 <td >2.3</td>
 <td >-0.1</td>
 <td >1.4</td>
 <td >1.9</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="9" >Chain-Type Price Index</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp; GDP</td>
 <td >1.7</td>
 <td >1.7</td>
 <td >3.0</td>
 <td >2.0</td>
 <td >2.3</td>
 <td >1.9</td>
 <td >1.1</td>
 <td >1.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Personal Consumption
 Expenditures</td>
 <td >1.5</td>
 <td >1.6</td>
 <td >2.0</td>
 <td >2.5</td>
 <td >2.2</td>
 <td >1.8</td>
 <td >1.1</td>
 <td >0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Nonresidential
 Investment</td>
 <td >1.5</td>
 <td >1.5</td>
 <td >2.0</td>
 <td >0.7</td>
 <td >1.2</td>
 <td >0.7</td>
 <td >-0.8</td>
 <td >0.5</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;&nbsp;&nbsp; Residential Investment</td>
 <td >3.6</td>
 <td >4.0</td>
 <td >7.3</td>
 <td >8.8</td>
 <td >5.7</td>
 <td >4.5</td>
 <td >3.6</td>
 <td >2.7</td>
 </tr>
 </tbody>
 
 
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Real gross domestic product increased 3.5% (AR, 3.0% y/y) during Q3'18, unrevised from the advance estimate. It followed a 4.2% rise during the second quarter. A 3.6% advance had been expected in the Action Economics Forecast Survey. [...]

U.S. GDP Growth Is Unrevised; Profits Growth Improves

Robert Brusca

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	 And the Tortured Path that Lies Ahead
 
 
 
 

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Globally, money supplies are decelerating to some extent with nominal M2 growth in the EMU a minor exception. All money growth rates decelerate from three-years to two-years to one-year. Only the U.K. and EMU have stronger growth over three months for money supply than over 12 months, although for neither does that seem very significant. For real money balances, all growth rates decelerate from three-years to two-years to one-year. Again the U.K. and EMU are exceptions for shorter growth rates as the only places where three-month real balance growth is faster than 12-month growth.

EMU Credit Growth 
In the EMU, credit growth has been essentially stable with some technical claim to minor accelerations or short and longer terms horizons. But there is nothing stirring beyond ‘an acceleration’ of several tenths of a percentage point on annualized rates of growth. There is technical acceleration but nothing fundamental that you can build growth on.

The Oil Pulse 
The impulse from rising oil prices is now turning to a negative one as oil prices decelerate from 12-months to six-months to three-months as growth rates drop from 34.7% to -1.3% and more of that is in train.


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Nominal Global Money Growth 
Nominal global money supply growth shows a growth rates of 1.8% over 12 months in the U.K. compared to 2.7% in Japan, 3.7% in the U.S., and 4.4% in the EMU. But as noted above, money growth rates have generally been slipping and generally are decelerating from 12-months to three-months. Three-month growth rates range from 5.1% in the EMU, to 3.5% in the U.S., to 3.2% in the U.K. and to 2.7% in Japan.

More on EMU Credit 
In the EMU, credit to residents creeps higher from a pace of 1.6% over 12 months to 1.7% over six months to 1.9% over three months. However, discounted for inflation and recalibrated as growth rates in real money balances and these rates of growth show net declines in credit over 12 months and six months with flat performance over three months. Private credit is only slightly better off, showing an annualized net gain over the recent three months at a 0.5% pace.


<img border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/181128.png" width="660" height="320">


Policy Moves and Economic Trends 
Money and credit stimulus clearly does not amount to much. But globally, growth has been slipping and trade flows have been slowing. The OECD has issued a warning and its collection of leading indicators has been reinforcing the outlook for weaker conditions. In the U.S., the President is complaining about the rapidity of Fed rate increases. In Europe, Mario Draghi has repeated that the policy of QE will come to an end at yearend.

In the U.S. as the Fed stays on its rate hike path, rates are getting higher as the effect of fiscal stimulus is wearing off. Interest sensitive sectors already are showing the strain much to the Fed’s surprise. To compensate, there is less of a drain on consumers and businesses from oil prices. But since the U.S. is also an oil producer, that may have a way of coming out in the wash as the benefit to consumers is a transfer from producers whose importance has grown in the U.S. and whose investment plans could well be curtailed if oil prices fall by enough.

U.S. Policy: As the Global Keystone...or Headstone? 
U.S. policy is at the center of the global policy storm as the Trump pressures over trade have dominated trade talk and are largely responsible for trade flow slowing. The Trump rhetoric continues to ratchet higher. Meanwhile, it is wholly speculative whether or not the U.S. and China will cut a trade deal on the sidelines of the summit being held in Argentina. While global conditions that feature plunging oil prices and weakening stock prices would seem to send a clear message about growth prospects and the state of global demand, central bankers are not making cyclical policy. They are making structural policy. The ECB is going ahead with its plans to terminate QE. And in the U.S., there is no sign that that the central bank has chosen a more moderate rate profile in view of unfolding economic events. All eyes are on the Fed and all are curious as to whether the Fed will hike rates in December and about what its rate guidance will look like at its next meeting.

Brexit...Godot 
Europe and the U.K. await the vote by the U.K. parliament on the pending Brexit plan. Anything goes there and we know that we cannot be reliably guided by opinion polls. So we wait and wait…

Firmness in Pursuit of Fairness – The end of Sugar-Daddy 
Globally, growth ramps down as the U.S. has been demanding more fairness in trade. The rest of the world mostly opposes changes apparently as though the U.S. is expected to remain sugar-daddy to the world. We see plenty of examples of the old post-war alliances dealing with policy rifts. That is to be expected as wartime relationships shift and as national identities are reestablished. And while Germany has been reunited, it has not been reestablished as a military power. Still, it is dominating Europe as an economic power and one whose ‘growth’ model has been oppressive for fellow EMU members. Germany continues to impose its will on Europe while everyone else is screaming about ‘America First’ policies. It is curious how in the Post War period the U.S. could be so generous. But as this process of repair from the war has evolved, everyone thinks it is business as usual to run their own selfish policies but see the U.S. as tyrannical when it begins to put its own interests first or simply to demand equal treatment or that allies pay their own way especially for defense services provided. We are 70 years on…except for the Koreas, of course. When do you stop nursing the baby?

Free Trade or License to Exploit? 
Under free trade, the global economy could have become a perpetual motion machine. But when that machine is jimmied and when countries put up selective barriers or control their exchange rate to determine an outcome and when some countries turn into perpetual surplus countries and others transform into deficit countries, the sustainability of that configuration has been destroyed. RIP Free Trade. Currencies must move and must be able to rebalance current accounts. Trade is a crucial feature of this system and it cannot be hijacked by national objectives. China and other Asian countries have done this to expedite and assure development. At first it was a post-war strategy, but it has become codified and many believe that running a trade surplus is now their right! But it’s wrong. That in fact is a free-trade killer. No country can run deficits forever as part of trade system.

Too Much Too Fast 
The shift of resources from West to East (from deficit to surplus countries) has been too fast and has threatened the economic prosperity and social stability in the West. Too much wealth has been transferred and too many jobs have been lost in too short a period of time. That is largely because China, a massive country, has waited so long to develop then has sought to catch up in a virtual instant. Can China deal with slower growth? Can it deal with more balanced growth? Its ‘Belt and Road’ project is not geared for that. It is a program of old-fashioned trade dominance. China like Germany seems to seek economic dominance more than fairness.

New Watchword: FAIRNESS 
I would say that the U.S. push for trade fairness has come just in time if not too late. But as always, time will tell. I think it is time to rethink who are the bad guys in this international trading system and to put all players on fair and equal footing. Unfortunately, it may be too late to do that with China because of its socioeconomic policies that now preclude a market-determined exchange rate, Chinese political repression and information control have left it with a more affluent population willing and eager to get financial assets - if not themselves- out of the country. And China is so large that such migrations of money or people would burden the economic system and dominate the exchange market. Capital controls in China are probably here to stay and that will be the ultimate roadblock to true free trade. So make no mistake about it. We blew it. We had a chance for free trade, but instead countries co-opted it and used trade to fulfill nationalistic objectives. And now free trade will no longer be an option. We are headed into a new realm of bargained trade. Get ready, ‘cause here it comes… and it is not just Donald Trump. It is the new reality.
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Globally, money supplies are decelerating to some extent with nominal M2 growth in the EMU a minor exception. All money growth rates decelerate from three-years to two-years to one-year. Only the U.K. and EMU have stronger growth over [...]

Little Changed in Paths of EMU Money or Credit

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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Little Changed in Paths of EMU Money or Credit