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Economy in Brief
PMIs Stabilize or Creep Higher After Drop-Off
In the EMU, both the services and manufacturing sectors took a substantial step down one month ago...
FIBER: Industrial Commodity Prices Strengthen Selectively
The FIBER Industrial Materials Price Index increased 0.4% during the last four weeks...
German PPI Accelerates
The German year-on-year PPI has generally been decelerating since early 2017...
U.S. Leading Economic Indicators Signal Continued Expansion
The Conference Board's Composite Index of Leading Economic Indicators increased 0.3% during March...
Philadelphia Fed Factory Conditions Improve; Prices Jump
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rose to 23.2 during April...
by Robert Brusca June 9, 2009
German orders are FLAT in April: what’s so good about that?
German orders have been decimated over the past year with only two
month-to-month gains in the past twelve months against a slew of huge
month-to-month declines. This month’s flat performance, however, leaves
German orders RISING early in 2009-Q2. Surprise! While February brought
a huge decline of 3.1% in orders, March took order back up by an
outsized 3.7%. The FLAT performance in April extends the March level
into 2009-Q2 imposing on Q2 a gain above the average level of orders in
2009-Q1. Optimism is born!
German orders are still decimated being off by 33% Yr/Yr.
Foreign order are of by 35% Yr/Yr while domestic orders are off by 29%
Yr/Yr. Foreign orders are building upward momentum again being up at an
8% pace over six months and up at an annual rate pace of 17% over three
months. Really!
Suddenly the bottom is not falling out any more...and there is
forward momentum to boot- at last somewhere. And for Germany foreign
orders are a very important ‘somewhere.’
The OECD LEIs also are giving some hint of support as they are
showing some resiliency for some OECD members. The OECD’s cyclically
adjusted leading indicator for the U.S. rose to 90.9 in April from 90.7
in March, while for Japan the index rose by the thinnest of margins to
89.5 from 89.4 in March; the leading indicator for Germany also ticked
up a to 90.3 from March's 90.2. Among the large developing economies,
China once again showed the clearest signs of revival, with its leading
indicator rising to 94.3 from 93.4. The leading indicator for India
rose in April to 93.9 from 93.5 in the previous month. Indicators for
Brazil and Russia continued to fall, which is interesting since each of
these countries is also experiencing sharp surges in their respective
equity markets. "Major non-OECD economies still face deteriorating
conditions, with the exception of China and India, where tentative
signs of a trough have also emerged," the OECD said. Still there are
lots of hints of good news in the countries that are most likely to be
leading the global business cycle. And there are even some good market
trends in countries with poor economic trends as the Brazil and Russian
stock markets show.
On balance combined with the good order results from Germany,
and stronger ‘shoots’ being seen in the US, the ‘global tea leaves’
increasingly point to some sort of global resurgence. That is not too
surprising given the floor under oil and its new rising trend.
(Although we should by now have learned to be at least somewhat
skeptical of what oil’s signal is really worth.) Still, along with
sharply improved global equity market trends that feature rising ‘high
beta’ stocks, firmer commodity price trends, and improved economic
reports, we have bond yields on the rise. For every silver lining there
is also a cloud. In the US at least attention has begun to be directed
to the prospect that rates might switch to an increasing trend even
before year end. To many this is a shock.
To be sure rising treasury rates that might boost US mortgage
rates raise questions about the sustainability of the incipient US
expansion as well. But these are the issues visited in each and every
economy that switches from recession to recovery. Beware that the
agenda in markets is changing and the US is usually a bellwether Look
for shifts in the policy discussion overseas as well once chatter over
the European elections dies down.
Things change. Sometimes they change for the better…as they
are now. And changes have consequences.
German Orders and Sales By Sector and Origin | ||||||||
---|---|---|---|---|---|---|---|---|
Real and SA | % M/M | % SAAR | ||||||
Apr-09 | Mar-09 | Feb-09 | 3-MO | 6-Mo | 12-Mo | Year Ago | QTR-2-Date | |
Total Orders | 0.0% | 3.7% | -3.1% | 2.0% | 1.0% | -33.2% | 4.7% | 8.6% |
Foreign | -0.5% | 5.6% | -0.9% | 17.3% | 8.3% | -36.4% | 5.4% | 18.1% |
Domestic | 0.6% | 1.9% | -5.5% | -12.1% | -6.2% | -29.2% | 3.9% | -0.5% |
Real Sector Sales | ||||||||
MFG/Mining | -1.8% | 1.6% | -4.7% | -18.4% | -9.7% | -22.9% | 4.2% | -13.4% |
Consumer | 4.4% | -0.3% | -3.3% | 2.5% | 1.2% | -6.1% | -2.0% | 19.4% |
Consumer Durables | 0.2% | -1.4% | -7.8% | -30.9% | -16.9% | -23.1% | 3.7% | -18.9% |
Consumer Nondurables | 5.0% | -0.1% | -2.6% | 8.9% | 4.4% | -2.9% | -2.9% | 26.3% |
Capital Goods | -7.1% | 5.1% | -5.2% | -26.5% | -14.3% | -30.3% | 9.1% | -29.6% |
Intermediate Goods | 1.3% | -1.1% | -3.3% | -11.9% | -6.1% | -23.1% | 3.0% | -3.3% |
All MFG-Sales | -1.8% | 1.6% | -4.8% | -18.5% | -9.7% | -23.1% | 4.4% | -13.4% |