Robert Brusca

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109a.jpg" width="353">

</body>
</html>

OECD LEIS sink and signal a more impressive slowdown

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109e.jpg" align="left" border="0" height="265" width="353">
The bad news keeps on coming for Europe. Declines in
industrial output are now reflecting the effect of what has been
ongoing weakness in industrial orders. Output is down Yr/Yr in German,
France Spain and the UK and the progression of growth rates shows that
the intensity of the drops is increasing. 
 

Even so Europe has showed a new capacity to surprise. Retail
sales in November rose in Germany and across the e-Zone. Still this
little bit of resilience is a straw in a strong wind that is blowing in
the opposite direction. Unemployment is rising across the e-Zone, the
industrial sector is dropping quickly and the services sector is
declining rapidly. The industrial and service sector weakness is real.
Financial distress is still being corralled. The rebound in retailing
is a last gasp. 
 
 
 
 
 


 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Main
E-zone Countries and UK IP in MFG</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG Only</td>
<td>Nov-08</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>Nov-08</td>
<td>Nov-08</td>
<td>Nov-08</td>
<td>Q-2-Date</td>
</tr>
<tr>
<td class="firstcol">Germany:</td>
<td>-3.5%</td>
<td>-2.1%</td>
<td>-3.7%</td>
<td>-31.4%</td>
<td>-13.6%</td>
<td>-6.9%</td>
<td>-22.5%</td>
</tr>
<tr>
<td class="firstcol">France:IPxConstruct'n</td>
<td>-2.4%</td>
<td>-3.7%</td>
<td>-0.7%</td>
<td>-24.1%</td>
<td>-13.0%</td>
<td>-9.0%</td>
<td>-23.6%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>-11.5%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>-30.9%</td>
<td>-23.9%</td>
<td>-17.2%</td>
<td>-30.4%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>-2.9%</td>
<td>-1.4%</td>
<td>-1.0%</td>
<td>-19.2%</td>
<td>-12.7%</td>
<td>-7.4%</td>
<td>-16.3%</td>
</tr>
<tr class="odd">
<td colspan="6">Mo/Mo are simple percent changes
others are at saars</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body></html>

The bad news keeps on coming for Europe. Declines in industrial output are now reflecting the effect of what has been ongoing weakness in industrial orders. Output is down Yr/Yr in German, France Spain and the UK and the progression [...]

Industrial Output Falls Hard Across Europe

Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109a.jpg" width="353">
It wasn&#39;t bad enough that December nonfarm payrolls were cut 524,000, but downward revisions to prior months left payrolls for the twelve months off 1.9% from one year earlier. That was the weakest performance since the sharp recession of 1982. The latest decline followed cuts of 584,000 and 423,000 during the prior two months resulting in a three-month decline of 1.1%, the worst since the &quot;credit crunch&quot; recession of 1981 according to the Bureau of Labor Statistics. The latest decline exceeded Consensus expectations for a 495,000 drop.
The unemployment rate jumped again, last month to 7.2% which was its highest level since January 1993. The increase exceeded Consensus expectations for a rise to 7.0%. Household sector employment fell 806,000 (-2.0% y/y) for the worst twelve month performance since 1958. The labor force fell 173,000 but it was still up 0.4% y/y. Regardless, the number of potential workers who were not in labor force but wanted a job, i.e. the &quot;discouraged worker,&quot; rose by 17.6% y/y. The number of those who were unemployed last month rose 632,000. The figure was up 3.6 million, or 47.3% December-to-December.
The average duration of unemployment rose to 19.7 weeks after falling during November. The latest was near the highest since the early 1980s. The number of those unemployed for more than 27 weeks surged by 17.4% m/m and it nearly doubled year-to-year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109b.jpg" width="353">
During 4Q, aggregate hours worked, which is employment times the length of the average workweek, fell at a 3.9% annual rate from 3Q. During the last thirty years there has been a 73% correlation between the growth in aggregate hours worked and real GDP growth. The change in worker productivity should result, as it usually does during a recession, in even weaker 4Q GDP growth.
The private service sector has weakened as in no other period during the last 60 years. Over the last three months, 916,000 jobs were shed, or 1.0% of the total. During that period 339,000 jobs were lost from the professional &amp; business services sector and 69,000 were laid off from the financial services sector. Leisure and hospitality jobs were lost by 119,000 and 234,000 were cut from the retail sector. About the only sector to show growth in jobs was health services where jobs rose 112,200 during the last three months. Even jobs in education fell 1,200 during that period.
Factory sector jobs were cut by 149,000 last month which was the largest one-month decline since 2001 and the y/y change of -5.7% was the weakest since 2002. Cutbacks have accelerated recently, however, and the three-month change of -376,000, or -2.8%, was the weakest since 1981.
Construction sector employment continued lower, last month by 101,000. That rivaled the largest one-month drop since 1981. The three-month change amounted to -265,000, or 3.7%.<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109c.jpg" width="353">
Comparing Current Payroll Employment Changes with Past Recessions from the Federal Reserve Bank of Cleveland is available <a href="http://www.clevelandfed.org/research/trends/2008/1108/04ecoact.cfm">here</a>.
In the government sector hiring did continue last month. However, the modest 7,000 rise in payrolls followed declines in two of the prior three months. Payrolls are essentially flat since July. That pulled the y/y gain down to 0.8% from a high this past July of 1.5%. The slowdown is most dramatic in local government hiring. At 0.6%, year-to-year growth is off from a 1.7% rate this summer. It mostly reflects a slowdown in education hiring which has been negative in four of the last five months.
The length of the average workweek fell to 33.3 hours, down from 33.7 hours during the first nine months of this year and it was the shortest workweek on record.
Continuing to suggest declines in employment was the one month diffusion index, which measures the breadth of job gain or loss (50 is the break-even level). It fell to its lowest level of this cycle (25.4%). The three-month index also was at its cycle low at 24.1% and the three-month figure for the factory sector was even weaker at 14.3%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109d.jpg" width="353">
Average hourly earnings rose 0.3% versus an expectation for a 0.2% increase. Earnings the factory sector fell 0.1% (+2.9% y/y) and private services wages rose 0.3% (3.9% y/y).
The U.S. Economic Outlook: The Aftermath of Leverage from Kansas City Fed President Thomas M. Hoenig can be found <a href="http://www.kansascityfed.org/speechbio/hoenigPDF/CentralExch01.07.09.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment: 000s</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>-524</td>
<td>-584</td>
<td>-423</td>
<td>-1.9%</td>
<td>-0.3%</td>
<td>1.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Previous</td>
<td>--</td>
<td>-533</td>
<td>-320</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-149</td>
<td>-104</td>
<td>-123</td>
<td>-5.7%</td>
<td>-3.1%</td>
<td>-1.9%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-101</td>
<td>-85</td>
<td>-79</td>
<td>-8.5%</td>
<td>-5.8%</td>
<td>-1.0%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-273</td>
<td>-402</td>
<td>-222</td>
<td>-1.1%</td>
<td>0.4%</td>
<td>1.6%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.3</td>
<td>33.5</td>
<td>33.5</td>
<td>33.8 (Dec. &#39;07)</td>
<td>33.6</td>
<td>33.8</td>
<td>33.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.4%</td>
<td>0.3%</td>
<td>3.7%</td>
<td>3.6%</td>
<td>4.0%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>7.2%</td>
<td>6.8%</td>
<td>6.6%</td>
<td>4.9% (Dec. &#39;07)</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

It wasn't bad enough that December nonfarm payrolls were cut 524,000, but downward revisions to prior months left payrolls for the twelve months off 1.9% from one year earlier. That was the weakest performance since the sharp [...]

U.S. Payrolls Slashed 524,000; Past Data Lowered; 7.2% Jobless Rate Highest Since 1993

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109a.jpg" align="left" border="0" height="265" width="353">
It wasn't bad enough that December nonfarm payrolls were cut
524,000, but downward revisions to prior months left payrolls for the
twelve months off 1.9% from one year earlier. That was the weakest
performance since the sharp recession of 1982. The latest decline
followed cuts of 584,000 and 423,000 during the prior two months
resulting in a three-month decline of 1.1%, the worst since the "credit
crunch" recession of 1981 according to the Bureau of Labor Statistics.
The latest decline exceeded Consensus expectations for a 495,000 drop.
The unemployment rate jumped again, last
month to 7.2% which was its highest level since January 1993. The
increase exceeded Consensus expectations for a rise to 7.0%. Household
sector employment fell 806,000 (-2.0% y/y) for the worst
twelve month performance since 1958. The
labor force fell 173,000 but it was still up 0.4% y/y. Regardless, the
number of potential workers who were not in labor force but wanted a
job, i.e. the "discouraged worker," rose by 17.6% y/y. The
number of those who were unemployed last month rose 632,000. The figure
was up 3.6 million, or 47.3% December-to-December.
The average duration of unemployment rose to 19.7 weeks after
falling during November. The latest was near the highest since the
early 1980s. The number of those unemployed for more than 27 weeks
surged by 17.4% m/m and it nearly doubled year-to-year.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109b.jpg" align="right" border="0" height="265" width="353">
During 4Q, aggregate hours worked, which is employment times
the length of the average workweek, fell at a 3.9% annual rate from 3Q.
During the last thirty years there has been a 73% correlation between
the growth in aggregate hours worked and real GDP growth. The change in
worker productivity should result, as it usually does during a
recession, in even weaker 4Q GDP growth.
The private service sector has weakened as in no other period
during the last 60 years. Over the last three months, 916,000 jobs were
shed, or 1.0% of the total. During that period 339,000 jobs were lost
from the professional &amp; business services sector and 69,000
were laid off from the financial services sector. Leisure and
hospitality jobs were lost by 119,000 and 234,000 were cut from the
retail sector. About the only sector to show growth in jobs was health
services where jobs rose 112,200 during the last three months. Even
jobs in education fell 1,200 during that period.
Factory sector jobs were cut by 149,000 last month which was
the largest one-month decline since 2001 and the y/y change of -5.7%
was the weakest since 2002. Cutbacks have accelerated recently,
however, and the three-month change of -376,000, or -2.8%, was the
weakest since 1981.
Construction sector employment continued lower, last month by
101,000. That rivaled the largest one-month drop since 1981. The
three-month change amounted to -265,000, or 3.7%.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109c.jpg" align="left" border="0" height="265" width="353">
Comparing Current Payroll Employment Changes with
Past Recessions from the Federal Reserve Bank of Cleveland
is available <a href="http://www.clevelandfed.org/research/trends/2008/1108/04ecoact.cfm">here</a>.
In the government sector hiring did continue last month.
However, the modest 7,000 rise in payrolls followed declines in two of
the prior three months. Payrolls are essentially flat since July. That
pulled the y/y gain down to 0.8% from a high this past July of 1.5%.
The slowdown is most dramatic in local government hiring. At 0.6%,
year-to-year growth is off from a 1.7% rate this summer. It mostly
reflects a slowdown in education hiring which has been negative in four
of the last five months.
The length of the average workweek fell to 33.3 hours, down
from 33.7 hours during the first nine months of this year and it was
the shortest workweek on record.
Continuing to suggest declines in employment was the one month
diffusion index, which measures the breadth of job
gain or loss (50 is the break-even level). It fell to its lowest level
of this cycle (25.4%). The three-month index also was at its cycle low
at 24.1% and the three-month figure for the factory sector was even
weaker at 14.3%.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109d.jpg" align="right" border="0" height="265" width="353">
Average hourly earnings rose 0.3% versus an
expectation for a 0.2% increase. Earnings the factory sector fell 0.1%
(+2.9% y/y) and private services wages rose 0.3% (3.9% y/y).
The U.S. Economic Outlook: The Aftermath of Leverage
from Kansas City Fed President Thomas M. Hoenig can be found <a href="http://www.kansascityfed.org/speechbio/hoenigPDF/CentralExch01.07.09.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment:
000s</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>-524</td>
<td>-584</td>
<td>-423</td>
<td>-1.9%</td>
<td>-0.3%</td>
<td>1.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>-533</td>
<td>-320</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-149</td>
<td>-104</td>
<td>-123</td>
<td>-5.7%</td>
<td>-3.1%</td>
<td>-1.9%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-101</td>
<td>-85</td>
<td>-79</td>
<td>-8.5%</td>
<td>-5.8%</td>
<td>-1.0%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-273</td>
<td>-402</td>
<td>-222</td>
<td>-1.1%</td>
<td>0.4%</td>
<td>1.6%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.3</td>
<td>33.5</td>
<td>33.5</td>
<td>33.8 (Dec. '07)</td>
<td>33.6</td>
<td>33.8</td>
<td>33.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.3%</td>
<td>0.4%</td>
<td>0.3%</td>
<td>3.7%</td>
<td>3.6%</td>
<td>4.0%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>7.2%</td>
<td>6.8%</td>
<td>6.6%</td>
<td>4.9% (Dec. '07)</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
 Industrial Output Falls HardAcross Europe 
by <a href="/comment/Brusca.html">Robert
Brusca</a> January 9, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090109e.jpg" align="left" border="0" height="265" width="353">
The bad news keeps on coming for Europe. Declines in
industrial output are now reflecting the effect of what has been
ongoing weakness in industrial orders. Output is down Yr/Yr in German,
France Spain and the UK and the progression of growth rates shows that
the intensity of the drops is increasing. 
 

Even so Europe has showed a new capacity to surprise. Retail
sales in November rose in Germany and across the e-Zone. Still this
little bit of resilience is a straw in a strong wind that is blowing in
the opposite direction. Unemployment is rising across the e-Zone, the
industrial sector is dropping quickly and the services sector is
declining rapidly. The industrial and service sector weakness is real.
Financial distress is still being corralled. The rebound in retailing
is a last gasp. 
 
 
 
 
 


 

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">Main
E-zone Countries and UK IP in MFG</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>3-Mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG Only</td>
<td>Nov-08</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>Nov-08</td>
<td>Nov-08</td>
<td>Nov-08</td>
<td>Q-2-Date</td>
</tr>
<tr>
<td class="firstcol">Germany:</td>
<td>-3.5%</td>
<td>-2.1%</td>
<td>-3.7%</td>
<td>-31.4%</td>
<td>-13.6%</td>
<td>-6.9%</td>
<td>-22.5%</td>
</tr>
<tr>
<td class="firstcol">France:IPxConstruct'n</td>
<td>-2.4%</td>
<td>-3.7%</td>
<td>-0.7%</td>
<td>-24.1%</td>
<td>-13.0%</td>
<td>-9.0%</td>
<td>-23.6%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>-11.5%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>-30.9%</td>
<td>-23.9%</td>
<td>-17.2%</td>
<td>-30.4%</td>
</tr>
<tr>
<td class="firstcol">UK</td>
<td>-2.9%</td>
<td>-1.4%</td>
<td>-1.0%</td>
<td>-19.2%</td>
<td>-12.7%</td>
<td>-7.4%</td>
<td>-16.3%</td>
</tr>
<tr class="odd">
<td colspan="6">Mo/Mo are simple percent changes
others are at saars</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</tbody>
</table>
</body></html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090108d.jpg" align="left" border="0" height="265" width="353">
The table above summaries the overall EU and sector sentiment
gauges. In the bottom panel the EMU and country indices are presented.
The blue percentile panel presents the raw readings as a percentage in
their all range of values. Overall EU and EMU sentiment are on all time
lows: the zero percentile. Most large EU countries are on their worst
ever reading as well &#8211; or close to it (France). 
 

The percentage drops in the sentiment reading across countries
are still huge; for EMU as a single entity the drop is 10% in December. 
 

In addition all major sectors are their lows (since 1990) for
the EU. We plot the MFG sector and service sector indices above. Their
paths tell a clear story of how weak things are and that the path lower
still appears to have further downside. There is no deceleration in the
drop or any sense of a bounce. 
 
 
 
 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="12" scope="col">EU
Sectors and Country level Overall Sentiment</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">EU</td>
<td>Dec 
08</td>
<td>Nov 
08</td>
<td>Oct 
08</td>
<td>Sep 
08</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
<td>R-SQ 
w/Overall</td>
</tr>
<tr class="odd">
<td style="font-style: italic;" class="firstcol">Overall</td>
<td style="font-style: italic;">63.5</td>
<td style="font-style: italic;">70.5</td>
<td style="font-style: italic;">77.2</td>
<td style="font-style: italic;">84.9</td>
<td style="font-style: italic;">0.0</td>
<td style="font-style: italic;">220</td>
<td style="font-style: italic;">116</td>
<td style="font-style: italic;">64</td>
<td style="font-style: italic;">53</td>
<td style="font-style: italic;">99</td>
<td style="font-style: italic;">1.00</td>
</tr>
<tr class="odd">
<td class="firstcol">Industrial</td>
<td>-32</td>
<td>-25</td>
<td>-19</td>
<td>-13</td>
<td>0.0</td>
<td>220</td>
<td>7</td>
<td>-32</td>
<td>39</td>
<td>-7</td>
<td>0.87</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Confid</td>
<td>-28</td>
<td>-24</td>
<td>-23</td>
<td>-19</td>
<td>0.0</td>
<td>220</td>
<td>2</td>
<td>-28</td>
<td>30</td>
<td>-11</td>
<td>0.84</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail</td>
<td>-24</td>
<td>-18</td>
<td>-16</td>
<td>-13</td>
<td>0.0</td>
<td>220</td>
<td>6</td>
<td>-24</td>
<td>30</td>
<td>-6</td>
<td>0.55</td>
</tr>
<tr class="odd">
<td class="firstcol">Construction</td>
<td>-32</td>
<td>-29</td>
<td>-25</td>
<td>-20</td>
<td>22.2</td>
<td>185</td>
<td>3</td>
<td>-42</td>
<td>45</td>
<td>-17</td>
<td>0.41</td>
</tr>
<tr class="odd">
<td class="firstcol">Services</td>
<td>-23</td>
<td>-18</td>
<td>-10</td>
<td>-4</td>
<td>0.0</td>
<td>145</td>
<td>32</td>
<td>-23</td>
<td>55</td>
<td>16</td>
<td>0.84</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>% m/m</td>
<td>&nbsp;</td>
<td>Dec 
08</td>
<td colspan="2">Based on Level</td>
<td colspan="4">Level</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">EMU</td>
<td>-10.4%</td>
<td>-6.4%</td>
<td>-8.6%</td>
<td>67.1</td>
<td>0.0</td>
<td>220</td>
<td>117</td>
<td>67</td>
<td>50</td>
<td>99</td>
<td>0.95</td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>-6.4%</td>
<td>-7.1%</td>
<td>-5.1%</td>
<td>77.0</td>
<td>0.0</td>
<td>220</td>
<td>121</td>
<td>77</td>
<td>44</td>
<td>99</td>
<td>0.64</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>-9.8%</td>
<td>-1.6%</td>
<td>-8.6%</td>
<td>75.4</td>
<td>7.9</td>
<td>218</td>
<td>119</td>
<td>72</td>
<td>47</td>
<td>99</td>
<td>0.79</td>
</tr>
<tr class="odd">
<td class="firstcol">Italy</td>
<td>-12.2%</td>
<td>-1.5%</td>
<td>-6.9%</td>
<td>71.0</td>
<td>0.0</td>
<td>220</td>
<td>121</td>
<td>71</td>
<td>50</td>
<td>99</td>
<td>0.79</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>-10.0%</td>
<td>-4.2%</td>
<td>-5.0%</td>
<td>57.0</td>
<td>0.0</td>
<td>220</td>
<td>118</td>
<td>57</td>
<td>61</td>
<td>99</td>
<td>0.65</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo: UK</td>
<td>-1.0%</td>
<td>-12.5%</td>
<td>-7.5%</td>
<td>61.0</td>
<td>0.0</td>
<td>220</td>
<td>118</td>
<td>61</td>
<td>57</td>
<td>99</td>
<td>0.48</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol">Since
1990
except Services (Oct 1996)
247</td>
<td>-Count</td>
<td>Services:</td>
<td>145</td>
<td>-Count</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td colspan="12" class="firstcol">Sentiment
is an index, sector
readings are net balance diffusion measures</td>
</tr>
</tbody>
</table>
</body></html>

The table above summaries the overall EU and sector sentiment gauges. In the bottom panel the EMU and country indices are presented. The blue percentile panel presents the raw readings as a percentage in their all range of values. [...]

EMU is on an All-time Low for Sentiment Manufacturing and Services Plunge

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090108c.jpg" align="left" border="0" height="265" width="353">
German orders are plunging dropping by 6% in November, 6.3% in
October and by 8.3% in October. That is quite a string of losing
numbers. Order are falling at about a 50% annual rate in the fourth
quarter an that is true of orders both domestic and foreign sourced as
well. 
 

Sales have been weak in Germany in the quarter as well as
consumer durables sales are dropping at a 23% annual rate. Car sales
are weak globally. But even capital goods sales are dropping at a 15%
annual rate in Q4 and sales of intermediate goods are down at a 23%
annual rate, all in real terms. 
 

German orders are now so weak that the are off by 24% Yr/Yr.
It&#8217;s real pain. 
 
 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col">German
Orders and Sales By Sector and Origin
</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Nov-08</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>3-MO</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>YrAgo</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-6.0%</td>
<td>-6.3%</td>
<td>-8.3%</td>
<td>-57.6%</td>
<td>-34.9%</td>
<td>-24.0%</td>
<td>13.0%</td>
<td>-49.7%</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders</td>
<td>-4.4%</td>
<td>-6.3%</td>
<td>-11.6%</td>
<td>-60.8%</td>
<td>-37.4%</td>
<td>-26.9%</td>
<td>17.4%</td>
<td>-53.0%</td>
</tr>
<tr>
<td class="firstcol">Domestic Orders</td>
<td>-7.6%</td>
<td>-6.4%</td>
<td>-4.7%</td>
<td>-53.8%</td>
<td>-32.1%</td>
<td>-20.7%</td>
<td>8.4%</td>
<td>-45.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Real Sector Sales</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>-4.5%</td>
<td>-0.1%</td>
<td>-4.3%</td>
<td>-30.4%</td>
<td>-16.6%</td>
<td>-7.0%</td>
<td>4.3%</td>
<td>-16.8%</td>
</tr>
<tr>
<td class="firstcol">Consumer&nbsp;</td>
<td>-2.2%</td>
<td>-0.1%</td>
<td>-1.2%</td>
<td>-13.0%</td>
<td>-6.7%</td>
<td>-5.3%</td>
<td>1.2%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-4.5%</td>
<td>-1.1%</td>
<td>-6.2%</td>
<td>-38.1%</td>
<td>-21.3%</td>
<td>-9.7%</td>
<td>-0.5%</td>
<td>-22.9%</td>
</tr>
<tr>
<td class="firstcol">Consumer Nondurables</td>
<td>-1.7%</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>-7.1%</td>
<td>-3.6%</td>
<td>-4.5%</td>
<td>1.5%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-5.2%</td>
<td>1.0%</td>
<td>-5.4%</td>
<td>-32.6%</td>
<td>-17.9%</td>
<td>-6.6%</td>
<td>5.8%</td>
<td>-15.5%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-5.0%</td>
<td>-1.3%</td>
<td>-4.5%</td>
<td>-35.8%</td>
<td>-19.9%</td>
<td>-8.7%</td>
<td>4.5%</td>
<td>-23.6%</td>
</tr>
<tr>
<td class="firstcol">All MFG-Sales</td>
<td>-4.2%</td>
<td>0.0%</td>
<td>-4.2%</td>
<td>-29.1%</td>
<td>-15.8%</td>
<td>-6.6%</td>
<td>3.7%</td>
<td>-15.8%</td>
</tr>
</tbody>
</table>
Germany Posts Terrible
Orders&nbsp; 
by <a href="/comment/Brusca.html">Robert
Brusca</a> January 8, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090108c.jpg" align="left" border="0" height="265" width="353">
German orders are plunging dropping by 6% in November, 6.3% in
October and by 8.3% in October. That is quite a string of losing
numbers. Order are falling at about a 50% annual rate in the fourth
quarter an that is true of orders both domestic and foreign sourced as
well. 
 

Sales have been weak in Germany in the quarter as well as
consumer durables sales are dropping at a 23% annual rate. Car sales
are weak globally. But even capital goods sales are dropping at a 15%
annual rate in Q4 and sales of intermediate goods are down at a 23%
annual rate, all in real terms. 
 

German orders are now so weak that the are off by 24% Yr/Yr.
It&#8217;s real pain. 
 
 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col">German
Orders and Sales By Sector and Origin
</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Nov-08</td>
<td>Oct-08</td>
<td>Sep-08</td>
<td>3-MO</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>YrAgo</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-6.0%</td>
<td>-6.3%</td>
<td>-8.3%</td>
<td>-57.6%</td>
<td>-34.9%</td>
<td>-24.0%</td>
<td>13.0%</td>
<td>-49.7%</td>
</tr>
<tr>
<td class="firstcol">Foreign Orders</td>
<td>-4.4%</td>
<td>-6.3%</td>
<td>-11.6%</td>
<td>-60.8%</td>
<td>-37.4%</td>
<td>-26.9%</td>
<td>17.4%</td>
<td>-53.0%</td>
</tr>
<tr>
<td class="firstcol">Domestic Orders</td>
<td>-7.6%</td>
<td>-6.4%</td>
<td>-4.7%</td>
<td>-53.8%</td>
<td>-32.1%</td>
<td>-20.7%</td>
<td>8.4%</td>
<td>-45.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Real Sector Sales</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>-4.5%</td>
<td>-0.1%</td>
<td>-4.3%</td>
<td>-30.4%</td>
<td>-16.6%</td>
<td>-7.0%</td>
<td>4.3%</td>
<td>-16.8%</td>
</tr>
<tr>
<td class="firstcol">Consumer&nbsp;</td>
<td>-2.2%</td>
<td>-0.1%</td>
<td>-1.2%</td>
<td>-13.0%</td>
<td>-6.7%</td>
<td>-5.3%</td>
<td>1.2%</td>
<td>-6.1%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-4.5%</td>
<td>-1.1%</td>
<td>-6.2%</td>
<td>-38.1%</td>
<td>-21.3%</td>
<td>-9.7%</td>
<td>-0.5%</td>
<td>-22.9%</td>
</tr>
<tr>
<td class="firstcol">Consumer Nondurables</td>
<td>-1.7%</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>-7.1%</td>
<td>-3.6%</td>
<td>-4.5%</td>
<td>1.5%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-5.2%</td>
<td>1.0%</td>
<td>-5.4%</td>
<td>-32.6%</td>
<td>-17.9%</td>
<td>-6.6%</td>
<td>5.8%</td>
<td>-15.5%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-5.0%</td>
<td>-1.3%</td>
<td>-4.5%</td>
<td>-35.8%</td>
<td>-19.9%</td>
<td>-8.7%</td>
<td>4.5%</td>
<td>-23.6%</td>
</tr>
<tr>
<td class="firstcol">All MFG-Sales</td>
<td>-4.2%</td>
<td>0.0%</td>
<td>-4.2%</td>
<td>-29.1%</td>
<td>-15.8%</td>
<td>-6.6%</td>
<td>3.7%</td>
<td>-15.8%</td>
</tr>
</tbody>
</table>
</body></html>

German orders are plunging dropping by 6% in November, 6.3% in October and by 8.3% in October. That is quite a string of losing numbers. Order are falling at about a 50% annual rate in the fourth quarter an that is true of orders both [...]

Germany Posts Terrible Orders

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090108e.jpg" width="353">
U.S. consumer credit usage dropped during November for the third month in the last four. The Federal Reserve reported that consumer credit outstanding fell $8.0 billion m/m after a $2.8B October decline that was slightly shallower than reported initially. On a percentage basis, credit outstanding over the last three months fell at a 0.6% annual rate which was the largest decline since 1992.
Annualized, credit growth averaged 8% during the fifteen years ended 2007. Over an even longer period that increase does not loom particularly large. However, against an average 5% growth in disposable income during those years, it precipitated a rise in the ratio to disposable income to 24% from a longer term norm of 17%. The credit cards are now being put away, certainly with the weakness in the labor market.
Non-revolving credit, which accounts for nearly two-thirds of total consumer credit, dropped sharply for the third month in the last four. The whopping $5.2B m/m drop was near the largest on record and it reduced annualized growth during the last three months to -0.9%, the weakest since 1992. That followed a 4.4% rise last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090108f.jpg" width="353">
Revolving credit outstanding fell $2.8B during November. This dropped the three-month growth in credit card usage to -0.1%. That was down from the 7.4% growth last year and it was the weakest since the recession year of 2001.
These figures are the major input to the Fed&#39;s quarterly Flow of Funds accounts for the household sector. For 4Q08 the data will be released later this month. 
These data are available in Haver&#39;s USECON database.
The Budget and Economic Outlook: Fiscal Years 2009 to 2019 from the Congressional Budget Office can be found <a href="http://www.cbo.gov/ftpdocs/99xx/doc9958/01-08-Outlook_Testimony.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Consumer Credit (m/m Chg, SAAR)</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-8.0B</td>
<td>&nbsp;$-2.8B</td>
<td>2.3%</td>
<td>5.5%</td>
<td>4.5%</td>
<td>4.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-2.8B</td>
<td>$0.0B</td>
<td>4.0%</td>
<td>7.4%</td>
<td>6.1%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-5.2B</td>
<td>$-2.8B</td>
<td>1.2%</td>
<td>4.4%</td>
<td>3.6%</td>
<td>4.9%</td>
</tr>
</tbody>
</table>
</body>
</html>

U.S. consumer credit usage dropped during November for the third month in the last four. The Federal Reserve reported that consumer credit outstanding fell $8.0 billion m/m after a $2.8B October decline that was slightly shallower [...]

Credit Cards Pocketed; The Frugal U.S. Consumer

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090108a.jpg" width="353">
Last week, initial claims for unemployment insurance fell again. The 24,000 week-to-week decline to 467,000 followed a revised decline of 98,000 during Christmas week. The latter decline was widely attributed to an aberrant seasonal factor, although a problem near this magnitude has not been observed since 2001. Consensus expectations had been for a snapback last week to 540,000. The latest weekly figure may also have been influenced by the difficulty of seasonal adjustment, due to New Year&#39;s.
The latest figure was the lowest since the week ending October 11, when initial claims were at 463,000. The four-week moving average of initial claims fell from the cycle&#39;s high to 525,750 (53.4% y/y).
The Labor Department indicated that the largest increases in initial claims for the week ending Dec. 27 were in Wisconsin (+16,081), Michigan (+10,524), Kansas (+10,485), Massachusetts (+10,265), and New Jersey (+7,330), while the largest decreases were in Texas (-13,232), California (-9,702), Florida (-8,566), Virginia (-5,943), and South Carolina (-4,678).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090108b.jpg" width="353">
Continuing claims for unemployment insurance during the week of December 27 surged 101,000 following the 138,000 jump during the prior week. The latest was the highest level since 1982. The four-week average of continuing claims rose 45,000 to 4,470,000. Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.
The insured rate of unemployment remained for the second week at this cycle&#39;s high of 3.4%. The highest insured unemployment rates in the week ending December 20 were in Oregon (6.1 percent), Idaho (5.3), Michigan (5.2), Nevada (5.1), Puerto Rico (5.0), Pennsylvania (4.7), Wisconsin (4.7), South Carolina (4.4), Arkansas (4.3), Indiana (4.2), New Jersey (4.2), and Washington (4.2).
Financial Crisis Casts Shadow Over Commercial Real Estate from the Federal Reserve Bank of Dallas is available <a href="http://dallasfed.org/research/eclett/2008/el0812.pdf"> here</a>.
Agricultural Markets and Food Price Inflation&#151;A conference summary from the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/publications/fedletter/cfljanuary2009_258a.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">01/03/09</th>
<th scope="col">12/27/08</th>
<th scope="col">12/20/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>467</td>
<td>491</td>
<td>589</td>
<td>41.5%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,611</td>
<td>4,510</td>
<td>65.6%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
</tbody>
</table>
</body>
</html>

Last week, initial claims for unemployment insurance fell again. The 24,000 week-to-week decline to 467,000 followed a revised decline of 98,000 during Christmas week. The latter decline was widely attributed to an aberrant seasonal [...]

U.S. Weekly Claims For Jobless Insurance Fell Further

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

Global freight costs are on the rise while supply chain pressures are contained

Accelerating positive economic surprises in the G10 are boosting the global economy

Considerably more monetary ease expected from US and UK as Japan tightens

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

US productivity growth has been significantly faster than in other major economies

Consumers' short-term US inflation expectations still elevated while longer-term expectations of financial markets are steady

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

Job openings less than the number unemployed in July for first time since 2021

Reaccelerating goods price inflation along with sticky services inflation clouds the outlook

Falling oil prices aren't pulling down inflation expectations, pointing to a boost from increased tariffs

Equity market exuberance outpacing macroeconomic data

Apart from Japan, Blue Chip forecasters expect further sizable monetary easing

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

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

Service Health

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

Andrew Cates

**US trade with Europe** 
Geopolitical tensions surrounding Greenland have abruptly sharpened investor sensitivity to US trade and foreign-policy risk. What might once have been dismissed as rhetorical brinkmanship has taken on greater macro-financial relevance as Donald Trump has coupled renewed interest in Greenland’s strategic importance with explicit threats of higher tariffs on European imports. The first chart below highlights that the US is materially more exposed to EU goods than the EU is to US trade, making any escalation asymmetrically more costly for the US economy. Beyond the direct inflationary impact of higher tariffs, the more immediate risk lies in confidence effects and capital flows: early signs of capital reallocation away from US assets over the past 24 hours suggest that markets could be beginning to price a broader erosion of policy predictability. In this environment, tariffs risk functioning less as a targeted trade tool and more as a systemic confidence shock—tightening financial conditions, unsettling the dollar’s safe-haven status and increasing downside risks to US growth via weaker investment and higher risk premia.

260122Z1.jpg

**Japan’s JGB yields**
That said, recent capital outflows from US assets may owe as much to developments in Japan as to geopolitical and trade-related shocks. While tariff threats and policy unpredictability have clearly unsettled sentiment, an underappreciated driver of the sell-off in US Treasuries has been the sharp repricing in the Japanese government bond market. Renewed domestic political uncertainty and intensifying concerns over Japan’s debt dynamics have triggered a rapid rise in JGB yields, prompting portfolio rebalancing by Japanese investors and reducing the relative appeal of US duration. Given Japan’s role as one of the largest foreign holders of US Treasuries, yield gyrations at home can translate quickly into capital repatriation, hedging adjustments and reduced demand for US bonds. In this sense, recent moves in US yields may reflect less a direct reaction to geopolitical risk and more a globally transmitted capital-flow shock—originating in Japan but felt most acutely in US financial markets.

260122Z2.jpg

**Inflation expectations and oil prices**
Capital-flow dynamics may have also begun to spill over into how markets are pricing US inflation risk and monetary credibility. Historically, medium-term US inflation expectations have remained closely anchored to global energy prices, as illustrated by the strong co-movement between the 5-year forward inflation rate and Brent crude prices. More recently, however, that relationship has begun to fray: inflation expectations have proven notably resilient even as oil prices have softened, suggesting that markets are increasingly pricing political and policy risk rather than cost-push fundamentals alone. Renewed tariff threats under President Trump, combined with heightened geopolitical tensions involving Greenland and transatlantic relations, risk reinforcing concerns that future inflation outcomes could be shaped as much by political intervention as by macroeconomic conditions. Any perception that the Federal Reserve may face constraints on its operational independence would compound this shift—loosening inflation anchors, raising term premia and increasing the sensitivity of capital flows to US policy credibility.

260122Z3.jpg

**UK inflation** 
UK inflation data released this week show a small upside surprise in headline CPI at year-end. Headline CPI inflation specifically rose from 3.2% y/y in November to 3.4% in December, a little more than expected. The chart below shows that the pickup was driven by persistent underlying pressures—most notably in services. While a negative drag from energy prices has largely faded, services inflation continues to account for a disproportionate share of overall price growth, probably reflecting ongoing wage pressures and limited slack in parts of the domestic economy.

260122Z4.jpg

**Wage growth in the US and Europe** 
Labour-market data from the Indeed Hiring Lab reinforce the picture of persistent services-side pressure in the UK inflation mix. As the chart shows, UK posted wage growth remains elevated relative to both the euro area and the US, even though momentum has eased from its 2023 peak. At around the mid-5% range on a three-month moving average basis, UK wage growth is still running at a pace that is difficult to reconcile with a rapid return of services inflation to target. By contrast, posted wage growth in the euro area has slowed more decisively, while the US has seen a sharper deceleration from earlier extremes.

260122Z5.jpg

**China’s property market**
Finally, the Q4 GDP figures released in China this week sit uneasily alongside continued weakness in its domestic property sector, which remains a key drag on both investment and consumption. While Q4 growth of 4.5% y/y brought full-year GDP broadly in line with the authorities’ 5% target, the chart highlights how property-market adjustment is still running deep beneath the surface. Prices of existing homes across China’s 70 cities remain in year-on-year decline, while real estate investment continues to contract sharply, underscoring the scale and persistence of the sector’s retrenchment. This helps explain why fixed asset investment has softened further and why household demand remains subdued, despite more resilient industrial output.

260122Z6.jpg

This week’s data and market moves have been framed by an abrupt escalation in geopolitical tensions surrounding Greenland, which has served as a catalyst for broader financial unease rather than a standalone shock. The episode has sharpened investor focus on US policy predictability, amplifying concerns already evident in the charts on EU–US trade exposure, where tariff threats risk feeding directly into confidence effects and capital flows. At the same time, recent turbulence in Japanese government bonds appears to have been an underappreciated driver of the sell-off in US Treasuries, highlighting how global capital reallocation—rather than geopolitics alone—has contributed to higher US yields. These forces intersect with growing questions around the durability of US monetary credibility, as inflation expectations have shown signs of decoupling from traditional oil-price anchors, raising the sensitivity of markets to any perceived constraints on the Federal Reserve. Beyond the US, UK data delivered a modest upside surprise in headline inflation, with persistent services and wage pressures reinforcing a cautious policy backdrop for the Bank of England. In China, meanwhile, Q4 GDP growth of 4.5% y/y kept full-year expansion aligned with the government’s target, but continued weakness in the property sector remains a significant drag on investment and household confidence. Taken together, the week’s developments point to a global outlook increasingly shaped by geopolitical risk, capital-flow dynamics and domestic  structural constraints, rather than by straightforward cyclical momentum alone.

Charts of the Week: Seeing Green

260123E.jpg

The S&P PMIs for January show flash readings that indicate broadly stronger conditions across the early reporters in this table. Exceptions are the European Monetary Union as a whole with its composite reading weaker and France with its composite reading weaker, but Germany, the United Kingdom, Japan, Australia, India, and the United States all have composite readings that are stronger month-to-month in January. With these eight countries, there are 24 readings in each period, three for each country: a composite, one for manufacturing, and one for services. Among these 24 readings, only five of them were weaker month-to-month in January. Of course, this follows a December when only 6 of the readings were stronger month-to-month.

The sequential readings, that we calculate only off hard data (which means that calculations are done from December backward) are still mixed. Substantially weaker conditions period-to-period are reported comparing three-months to six-months. Over three months, only nine of the 24 readings are stronger whereas over six months only one of the 24 readings is weaker when compared to the 12-month average. Over 12 months, the average is stronger than it was one-year ago in 15 of the 24 readings. 

Only the United States and France have service sectors that are below their medians over this period back to 2022. Only France and India have composite readings that are below their respective medians over this period. But by comparison, there are very strong composite readings as well. There is a 91-percentile standing on the composite in Australia, an 87-percentile standing in Japan and the United Kingdom. The German composite has a 79-percentile standing.

The recent data have been running sporadically hot and cold, making it difficult to make sense out of what's happening. But broadly, it's clear that the PMIs in the European Monetary Union have been working their way higher and this is the general theme.

For the 8 reporters in the table back to January 2022, all of them except India show weaker manufacturing readings in January 2026 than what they showed in January 2022. But January 2022 was, of course, part of the COVID recovery move. Manufacturing in the European Monetary Union slipped from its high point over this period to its low point around mid-2023.

260123.jpg

Looking at point-to-point changes over the last three months, we find 3-sector cumulative drops in the United States, the European Monetary Union, and Germany. India has two sectors weakening with a decline in its composite as well as its manufacturing reading. Meanwhile, all the rest of the readings in the table over these three months show improved results. On a broad basis, we have to conclude there's more strength than weakness. However, since the weakness is concentrated and widespread and the largest economic units: the United States, the European Monetary Union, and the German economy, it's better to refer to the last three months as generating mixed economic statistics.

Looking forward, conditions are still hard to sort out. There's this obvious recovery in January after an equally obvious weak spot in December. The two of them cancel one another out in some sense. The average composite reading for all countries in the table shows some improvement in the manufacturing sector but waffling on the services sector. We get the same sort of readings looking at sequential averages; they do more of waffling than any kind of clear trend. On balance, the S&P readings don't give us a lot to go on this month. The survey is a bounce-back after a weak December and that's good news. But that doesn't give us a good handle on the trend yet.

S&P Flash PMIs Rebound But Emit No Clear Signal

Sandy Batten

260122N8.jpg

260122C8.jpg

Real GDP increased 4.4% q/q saar in the third quarter of 2025 in the final estimate, up marginally from 4.3% in the first release. The Action Economics Forecast Survey expected no revision. Growth from a year ago was unrevised at 2.3% y/y. Growth of corporate profits was revised up to 4.5% q/q not annualized from 4.2% in the previous report.

The revision to GDP mostly reflected slightly stronger nonresidential fixed investment, a larger increase in exports and a smaller decrease in inventory investment. Nonresidential fixed investment increased a revised 3.2% q/q saar versus a 2.8% gain in the previous release. This reflected a smaller decline in structures, a smaller increase in equipment and a larger increase in intellectual property products than previously estimated. Residential investment was revised weaker with a 7.1% quarterly decline versus -5.1% in the previous estimate.

Upon revision, exports rose 9.6% q/q in Q3 versus 8.8% in the first estimate. Consequently, the trade deficit narrowed a little more than in the first estimate, resulting in net exports adding 1.62%-points to overall growth, 0.03%-point more previously estimated. The decline in inventory investment in Q3 was smaller than previously estimated, reducing the drag from inventories by 0.1%-point versus the previous estimate. The decline in inventories subtracted 0.12%-point in Q3 on top of a 3.44%-point subtraction in Q2.

Domestic demand growth remained solid in Q3 but was revised down 0.1%-point. Final sales to domestic purchasers grew a revised 2.8% q/q saar in Q3 versus 2.9% in the first estimate. Final sales to private domestic purchasers increased 2.9% q/q, down slightly from 3.0% previously.

260122O8.jpg

260122P8.jpg

The primary driver of overall growth continued to be personal consumption expenditures. They increased an unrevised 3.5% q/q saar in Q3, adding 2.34%-points to total GDP growth. This reflected a 3.0% increase in spending on goods versus 3.1% previously and a 3.6% gain in spending on services versus 3.7% previously. The rise in government spending was unrevised at 2.2% q/q. However, spending by the federal government was revised slightly slower to 2.7% from 2.9% while spending by state and local governments was revised up slightly to 2.0% from 1.8%.

Key measures of inflation were unrevised. Inflation as measured by the GDP price index remained at 3.8% q/q saar in Q3, but this was up markedly from 2.1% in Q2. Similarly, PCE inflation in Q3 was unrevised at 2.8% versus 2.1% in Q2. Core PCE inflation was also unrevised at 2.9% in Q3.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

260122Q8.jpg

260122S8.jpg

- Real GDP grew 4.4% q/q saar in Q3 2025, up slightly from 4.3% previously reported.
- The modest upward revision was due mostly to slightly stronger nonresidential fixed investment, a larger increase in exports and a smaller decrease in inventories.
- Growth of domestic demand remained solid in Q3 but was revised down 0.1%-point.
- GDP and PCE inflation were unrevised at 3.8% and 2.8%, respectively. Both are meaningful accelerations from Q2.

U.S. Q3 GDP Growth Revised Slightly Faster

Kathleen Stephansen, CBE

260122A2.jpg

260122B2.jpg

Initial claims for unemployment insurance edged up 1,000 to 200,000 in the week ending January 17, from 199,000 in the week ending January 10, revised from 198,000. The four-week moving average of initial claims was 201,500 in the January 17 week, down 3,750 from 205,250 in the January 10 week, revised from 205,000, and reaching the lowest level for this average since January 13, 2024, when it was 200,000.

Federal government employees initially filed 1010 (NSA) jobless insurance claims in the week ended January 10, after filing 646 (NSA) claims in the week ended January 3.

The total number of unemployment insurance beneficiaries – also known as “continuing claims” –decreased by 26,000 to 1.849 million in the week ended January 10 from 1.875 million in the week ending January 3, revised from 1.884 million. The four-week moving average was 1.871 million in the latest week, down from 1.887 million in the January 3 week, revised from 1.889 million. The insured unemployment rate remained at 1.2% in the week of January 10, unchanged from previous 6 weeks.

Federal government employees’ continuing benefits claims were 12,977 (NSA) in the week ending January 3, from 12,803 (NSA) in the week of December 27.

The insured unemployment rate varied greatly across individual states and territories. In the week ending January 3, the highest unemployment rates were in Rhode Island (3.27%), New Jersey (3.17%), Washington (2.85%), Minnesota (2.75%), Massachusetts (2.74%), Oregon (2.37%), Connecticut (2.31%), Montana (2.26%), California (2.21%), and Alaska (2.06%). The lowest rates were in Florida (0.29%), North Carolina (0.40%), and Louisiana (0.43%). Rates in other notable states include New York (2.28%), Pennsylvania (2.23%), Illinois (2.21%), and Texas (1.14%). These state data 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.

260122C2.jpg

260122D2.jpg

U.S. Initial Claims for Unemployment Insurance Edged Up in Latest Week

260122E.jpg

The National Bank of Belgium index for January 2026 rose to +4 from -1 in December, stronger than its November 2025 reading of +2. The survey value is exceptionally strong, lying in the top 6% of all observations back to 1991, even as the survey contains significant variations that range from strong to quite weak across its various components. What is most notable is that the index itself is extremely high-ranking; the current situation appraisal is also quite high-ranking; and, that the forecast for unemployment embedded in this survey is at a 35-year low. Considering current circumstances, against the events of the last 35 years, that's a rather remarkable finding especially considering the world situation.

**The times, they are a changin’ was Dylan 50 years early?** 
These have been remarkable times in a number of different ways with a clear transition from the circumstances of the post-war period under way. The solidarity of the NATO alliance is clearly in a situation in flux, revealed since Russia invaded Ukraine. Prior to that, the Europeans had resisted putting more money into the NATO pot as the United States had been frantically asking them while it funded most of the security umbrella. Now, in the wake of these new events, and with the changes to the global stage wrought by climate shifting, the U.S. finds Greenland to be a more important piece on the geopolitical chess board and wants to have more say there in order to protect its own flank as Arctic ice packs recede. This is after a period when NATO basically failed to engage in the front-line protections of its own doorstep that the U.S. had thought were necessary. Not surprisingly, the U.S. found that whole episode unsatisfactory and is now reluctant to give up control to NATO of what it regards as the protection of its own back door for the area around Greenland. But at last, Europe and the U.S. appear to have a deal or the makings of one, so, stay tuned. Maybe all civility is not lost.

**Geopolitical shifts meld with economic issues to change the landscape**
Geopolitical shifts are part of the problem because geopolitics and economics help shape one another. And there has been a great deal of economic turmoil as well. The U.S., after reassessing the Post War order, is bringing back to life tariffs, in order to try to get economic leverage after running 33 consecutive years of current account deficits under what people want to call a free trade system. The U.S. finds itself with a still very overvalued dollar and in a situation where its current account deficits are poised to continue to run high and perhaps get higher. Economists say tariffs are not the solution, but maybe they ARE the wake-up call that will lead to a solution? Europeans have also shifted to embracing a larger and larger government sector and ever larger fiscal deficits and more fiscal debt while absorbing migrants. This is constraining its ability to have any kind of a flexible macroeconomic policy and is a severe problem already for the U.K. and France. And these changes are wreaking havoc with what has been a very solid post-war Atlantic alliance.

**Views change**
But the changes that the U.S. has pushed on to the system from its geopolitical adventurism to its use of tariffs and other strong rhetorical comments have led economists to focus on the elevation of uncertainty in the economic system. Elevating uncertainty has an adverse impact on the economy and on growth. I mentioned this with the obvious caveat that this warning by economists seems to have been completely wrong. U.S. growth has turned out to be quite resilient and even strong. It is not the only adamant position that has proved to be wrong and malleable. Despite the reality of climate change, the view that once took carbon as the main and unequivocal climate change agent, itself is shifting. Opposition to carbon has dwindled, more as the U.S. is embracing nuclear power. Artificial intelligence is becoming a strong bet for stronger growth in the future, and this explains why there have been so many shifting views on energy since artificial intelligence requires massive amounts of energy and would make it impossible to make progress on carbon and to push ahead with the AI agenda at the same time. So, instead of delaying AI, the view on carbon had to go. So much for ‘science.’

**Why are Belgians so satisfied?**
The finding that in Belgium consumer confidence has risen sharply in this environment and fears of unemployment are the lowest they've been in 35 years is another shocking development in this pantheon of incredible and shocking changes. As the above discussion points out, a lot is changing and NATO is at odds with the U.S., its lynchpin. Yet, there is no clear increase in uncertainty in Belgium, while they maybe more in Brussels.

**The Belgian Survey: strong despite waffles**
Belgians do not read the economic situation over the next 12 months as that strong at a reading of -29 on the survey; it has weakened over the last few months, and the economic situation assessment is only at its 8.3 percentile, an extremely weak standing. Price trends are the opposite; they have eased somewhat in the recent months, but over the next 12 months the assessment still has a top 14-percentile evaluation. It is in this context that the unemployment forecast, which is the lowest in 35 years, emerges as surprising. The environment to make major household purchases over the next 12 months is only a mid-range at a 45.7 percentile standing. And people rate their financial situation over the next 12 months slightly better than at the end of last year but at only a 34.2 percentile standing. However, the appraisal of the current situation moved up sharply in January and has a 97.7 percentile standing, which is extremely strong.

260122.jpg

**Low unemployment fear spurs confidence**
The reason for consumer confidence to be strong is clear when you see how low concerns are about unemployment. But it's hard to understand why concerns about unemployment are so low with the rest of the economic metrics so varied in the survey. This is especially true with Belgium nestled in the heart of Europe and all of these concerns between the U.S. and NATO swirling around as well as a still very hot war occurring on Europe's border between Ukraine and Russia. Meanwhile, the U.S. position about this war continues to seem to back Ukraine a lot less than it should.

**Belgium is a good bellwether**
The Belgian survey is not the most important bit of economic activity. Belgium is not an extremely important country in Europe, although it's in the heart of the European Union, a member of the European Monetary Union, linked closely to Germany, and to other key European economies through trade, so that its performance likely is a good reflection of what's going on in Europe. It is not a European border country. It is in the heartland of Europe. That may explain a little bit why Belgians are not perhaps as nervous as Poles, are or Finns or the small Baltic countries, and others, with potentially more border proximity and vulnerability to the Russia-Ukraine conflict.

**Belgian optimism flies in out of the blue**
This is an observation. I think it's the kind of observation in this world economy that we find striking and unusual and will bear some further watching and some watching of other similar readings in Europe to see if there's evidence that there's some kind of new resilience that we might have missed. Economists seem hung-up broken-record style on uncertainty. Certainly, there's something here that economists have missed who have only seen these new actions by the U.S. as creating more uncertainty since we do not know what the new Greenland deal is. And uncertainty should create more adversity for growth except that it hasn't worked out that way. And it's a reminder that separating economics from geopolitics may take more than a crowbar. And also that uncertainty comes in many shapes and sizes while some may argue that there still is not a Greenland deal, what we see is a lowering of the temperature, a calming of the rhetoric and a sense that the parties have a horse trade they think they can do to resolve their differences. And while there is still uncertainty, there is also clear progress and a clear reduction in risk. Still, the times are changing.

Economy in Brief: 2009

Jump to:

OECD LEIS sink and signal a more impressive slowdown

Industrial Output Falls Hard Across Europe

U.S. Payrolls Slashed 524,000; Past Data Lowered; 7.2% Jobless Rate Highest Since 1993

U.S. Payrolls Slashed 524,000; Past Data Lowered; 7.2% Jobless Rate Highest Since 1993

EMU is on an All-time Low for Sentiment Manufacturing and Services Plunge

Germany Posts Terrible Orders

Credit Cards Pocketed; The Frugal U.S. Consumer

U.S. Weekly Claims For Jobless Insurance Fell Further