Tom Moeller

U.S. import prices in May posted their second monthly decline this year with lower energy prices. The Bureau of Labor Statistics indicated that, overall, import prices fell 0.6% last month but the decline was short of Consensus [...]

U.S. Import Prices Fall With Lower Oil Costs

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<a href="/comment/100614c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614c.png"></a>
<a href="/comment/100614d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614d.png"></a>
 Population growth in the United States has been declining steadily since the early-1990s. Specifically, growth of 1.0% during the last nine years is off from the early-1990s' high of 1.4% and is well below the 1.5%-2.5% growth rates from the mid-1940s to the mid-1960s. Analyzing all of the reasons for the slowdown is beyond the scope of this presentation, yet one thing is clear. The Southern and Western states have seen accelerated growth at the expense of most other sections of the country. 

Suffering the greatest decline has been population growth in the country's extreme Northeast. Maine actually experienced net out-migration last year. Chronically slow population growth also characterizes the Northeast and the Midwestern regions with relatively high housing costs and the falloff in factory sector output as a percent of the economy. Michigan also experienced net outmigration during the last four years.

Net-population advances characterizes states in most other regions of the country. During the last five years the strongest growth rates have been in Wyoming, Texas, North Carolina and Colorado. Relatively low housing costs, an aging population as well as an increased ability to communicate electronically has aided population growth in these states. California, however, has seen population growth decelerate sharply with high unemployment and high home-foreclosures. 
The data used in the above analysis is available in Haver's USPOP database.

<a href="/comment/100614e_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614e.png"></a>
<a href="/comment/100614f_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614f.png"></a>
<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Population
Growth (%)
</th><th scope="col">2009</th>
<th scope="col"2008</th>
<th scope="col"2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">United States</td>
<td>0.9</td>
<td>0.9</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Maine</td>
<td>-0.1</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3</td>
</tr>
<tr class="odd">
<td class="firstcol"> New
Hampshire</td>
<td>0.2</td>
<td>0.3</td>
<td>0.4</td>
<td>0.8</td>
</tr>
<tr>
<td class="firstcol">Vermont</td>
<td>0.1</td>
<td>0.1</td>
<td>0.1</td>
<td>0.2</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">New York</td>
<td>0.4</td>
<td>0.2</td>
<td>0.3</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">New
Jersey</td>
<td>0.5</td>
<td>0.3</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr>
<td class="firstcol">Massachusetts</td>
<td>0.8</td>
<td>0.7</td>
<td>0.5</td>
<td>0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">
Pennsylvania</td>
<td>0.3</td>
<td>0.4</td>
<td>0.4</td>
<td>0.4</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"> Louisiana</td>
<td>1.0</td>
<td>1.7</td>
<td>3.2</td>
<td>-5.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Virginia</td>
<td>1.1</td>
<td>1.0</td>
<td>1.0</td>
<td>1.1</td>
</tr>
<tr>
<td class="firstcol"> North
Carolina</td>
<td>1.5</td>
<td>2.0</td>
<td>2.2</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Georgia</td>
<td>1.4</td>
<td>1.7</td>
<td>2.2</td>
<td>2.6</td>
</tr>
<tr>
<td class="firstcol">Florida</td>
<td>0.7</td>
<td>0.8</td>
<td>1.1</td>
<td>1.1</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"> Michigan</td>
<td>-0.3</td>
<td>-0.5</td>
<td>-0.3</td>
<td>-0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Illinois</td>
<td>0.5</td>
<td>0.5</td>
<td>0.5</td>
<td>0.3</td>
</tr>
<tr>
<td class="firstcol">Indiana</td>
<td>0.5</td>
<td>0.7</td>
<td>0.7</td>
<td>0.8</td>
</tr>
<tr class="odd">
<td class="firstcol"> Minnesota</td>
<td>0.7</td>
<td>0.8</td>
<td>0.8</td>
<td>0.8</td>
</tr>
<tr>
<td class="firstcol">Ohio</td>
<td>0.1</td>
<td>0.1</td>
<td>0.3</td>
<td>0.2</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp; </td>
</tr>
<tr>
<td class="firstcol">Kansas</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Texas</td>
<td>2.0</td>
<td>2.0</td>
<td>2.0</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">Arizona</td>
<td>1.5</td>
<td>2.2</td>
<td>2.8</td>
<td>3.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Colorado</td>
<td>1.8</td>
<td>1.9</td>
<td>1.9</td>
<td>2.0</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Wyoming</td>
<td>2.1</td>
<td>1.8</td>
<td>2.1</td>
<td>1.3</td>
</tr>
<tr class="odd">
<td class="firstcol">
California</td>
<td>1.0</td>
<td>1.0</td>
<td>0.7</td>
<td>0.5</td>
</tr>
<tr>
<td class="firstcol">
Washington</td>
<td>1.5</td>
<td>1.6</td>
<td>1.5</td>
<td>1.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Nevada</td>
<td>1.0</td>
<td>1.9</td>
<td>3.0</td>
<td>3.5</td>
</tr>
</tbody>
</table>

</html>

Population growth in the United States has been declining steadily since the early-1990s. Specifically, growth of 1.0% during the last nine years is off from the early-1990s' high of 1.4% and is well below the 1.5%-2.5% growth rates [...]

Moving Around The United States

Louise Curley

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<a href="/comment/100614b_big.png" name="modal"><img class="large" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614b.png"></a>
Industrial
production in most countries has shown improvement in the first few
months of this year.&nbsp; Today data for the first quarter for
Hong Kong and for April of this year for Japan and the entire Euro Area
were released.&nbsp; The data are shown in the attached
chart.&nbsp; For comparability, the original index for Hong Kong
based on 2008=100 was changed to 2005=100, the base of the other two
series, using the "advanced function" in DLX. In addition since the
data for Hong Kong are for the manufacturing sector only, we have used
data for the manufacturing data for Japan and the Euro Area instead of
their total industrial production figures that includes mining,
quarrying, electricity, gas and water supply and construction.&nbsp;
Of the two countries and the Euro Area,
manufacturing production in Japan was the first to decline and has
experienced the sharpest decline and recovery.&nbsp;&nbsp; In
April, manufacturing production in Japan was 95.9 (2005-100) 34.7%
above the low point of 71.2 in February, 2009.&nbsp; The comparable
figures for the Euro Area are 9.7% and 88.2 in May 2009.&nbsp; The
data for Hong Kong are quarterly, and therefore, somewhat less volatile
than the monthly figures.&nbsp; By the first quarter of this year,
manufacturing production in Hong Kong was 88.1 (2005=100) or 3.3% above
the low of 85.3 reached in the 3rd quarter of 2009.&nbsp;

<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">IP: Manufacturing (SA,
2005=100)
</th><th scope="col">Apr 10</th>
<th scope="col"Mar 10</th>
<th scope="col">Feb 10</th>
<th scope="col">Jan 10</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
</tr>
</thead>
<tr>
<td class="firstcol">Japan</td>
<td>95.9</td>
<td>94.7</td>
<td>93.6</td>
<td>94.2</td>
<td>90.3</td>
<td>88.0</td>
<td>85.8</td>
<td>84.4</td>
<td>82.9</td>
</tr>
<tr>
<td class="firstcol">Euro Area</td>
<td>96.6</td>
<td>96.1</td>
<td>94.3</td>
<td>93.6</td>
<td>91.8</td>
<td>91.5</td>
<td>90.1</td>
<td>90.1</td>
<td>89.1</td>
</tr>
<tr class="grey2">
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Q1 10</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Q4 09</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Q3 09</td>
</tr>
<tr>
<td class="firstcol">Hong Kong</td>
<td>--</td>
<td>--</td>
<td>88.1</td>
<td>--</td>
<td>--</td>
<td>85.4</td>
<td>--</td>
<td>--</td>
<td>85.3</td>
</tr>

</table>

</html>

Industrial production in most countries has shown improvement in the first few months of this year. Today data for the first quarter for Hong Kong and for April of this year for Japan and the entire Euro Area were released. The data [...]

More Industrial Production Data: Japan, Hong Kong And The Euro Area

Robert Brusca

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<a href="/comment/100614a_big.png" name="modal"><img class="large" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614a.png"></a>
Industrial output in the euro-area is still putting out some good
gains. This is despite the fact that the consumer goods sector
continues to lag and to decline. Overall EMU output rose by 0.6% m/m in
April after a gain of 1.8% in March and of 0.8% in February. The
strength is real. In April consumer goods output fell by 0.9% over
three-months, however, consumer goods output is up at just a 1%
annualized rate compared to a 13.5% pace for all of output. 
Capital goods output is growing at a accelerating
pace from 12-months to six months to three months. Intermediate goods
are not quite on such a clear acceleration but growth rates have been
high and steady with strong growth over three-months. Consumer goods
output has accelerated from 12-months to six months and has since been
subdued.
In the quarter to date -just one month into the
new quarter- output is growth sharply over the Q1 base. Output is up at
a 13% pace in Q2 lead by a rise at a 22% pace by intermediate goods and
a 15% pace by capital goods. The quarterly growth rate is held back by
consumer goods where output is shrinking at nearly a 1% annual rate. 
This is a familiar set of facts. We have been
talking about these trends in Europe for some time. The expansion seems
solid enough despite all the concerns. Mount enough concerns and they
can sink the healthiest of economies. But Europe is not there yet. It
still seems to be doing fine. The capital goods and intermediate goods
sectors are driving output ahead, but the lagging consumer goods sector
remains an impediment to getting into that next gear. 
Europe needs to more home grown demand. Europe
needs to get its consumer in gear. But growth is still quite solid and
is not showing any sign of decelerating and certainly none of
declining. With such a sharp drop in the euro in the background I think
investor worries about Europe are entirely in the wrong direction. 


<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<th scope="col" colspan=11>Euro-Area MFG IP</th>
</thead>
<tbody>

<tr class="even">
<td class="firstcol" >Saar
except m/m</td>
<td colspan=3>Mo/Mo</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">Euro-Area
Detail</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Feb 10</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q1</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG</td>
<td>0.6%</td>
<td>1.8%</td>
<td>0.8%</td>
<td>13.5%</td>
<td>19.6%</td>
<td>15.0%</td>
<td>13.8%</td>
<td>9.1%</td>
<td>7.9%</td>
<td>13.1%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-0.9%</td>
<td>1.2%</td>
<td>0.0%</td>
<td>1.0%</td>
<td>9.0%</td>
<td>6.4%</td>
<td>6.1%</td>
<td>2.9%</td>
<td>4.8%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">C-Durables</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.4%</td>
<td>1.9%</td>
<td>11.4%</td>
<td>6.5%</td>
<td>7.0%</td>
<td>1.2%</td>
<td>1.3%</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">C-Non-durables</td>
<td>-1.2%</td>
<td>1.6%</td>
<td>0.1%</td>
<td>1.9%</td>
<td>10.9%</td>
<td>6.3%</td>
<td>6.1%</td>
<td>3.0%</td>
<td>5.5%</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate</td>
<td>2.2%</td>
<td>1.1%</td>
<td>1.2%</td>
<td>19.7%</td>
<td>12.2%</td>
<td>11.9%</td>
<td>9.1%</td>
<td>15.1%</td>
<td>14.3%</td>
<td>22.1%</td>
</tr>
<tr>
<td class="firstcol">Capital</td>
<td>1.0%</td>
<td>1.7%</td>
<td>0.7%</td>
<td>14.7%</td>
<td>6.8%</td>
<td>9.3%</td>
<td>5.9%</td>
<td>8.1%</td>
<td>5.2%</td>
<td>15.5%</td>
</tr>
<tr class="grey3">
<td colspan=11 class="firstcol">Main Euro-Area Countries and UK IP in
MFG</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan=3>Mo/Mo</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG
Only</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Feb 10</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q:4 Date</td>
</tr>
<tr>
<td class="firstcol">Germany:</td>
<td>0.6%</td>
<td>3.9%</td>
<td>0.0%</td>
<td>19.2%</td>
<td>19.3%</td>
<td>9.9%</td>
<td>4.6%</td>
<td>14.1%</td>
<td>10.2%</td>
<td>20.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">France: IPxConstruct'n</td>
<td>-0.3%</td>
<td>1.3%</td>
<td>0.1%</td>
<td>4.5%</td>
<td>10.7%</td>
<td>6.4%</td>
<td>6.9%</td>
<td>7.9%</td>
<td>7.1%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">
Italy</td>
<td>1.2%</td>
<td>0.1%</td>
<td>0.5%</td>
<td>7.2%</td>
<td>9.3%</td>
<td>7.0%</td>
<td>6.3%</td>
<td>8.1%</td>
<td>7.4%</td>
<td>8.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>-1.5%</td>
<td>5.4%</td>
<td>1.6%</td>
<td>24.0%</td>
<td>14.8%</td>
<td>2.4%</td>
<td>4.6%</td>
<td>2.8%</td>
<td>5.0%</td>
<td>16.1%</td>
</tr>
<tr>
<td class="firstcol">UK:
EU member</td>
<td>-0.3%</td>
<td>2.2%</td>
<td>1.6%</td>
<td>14.7%</td>
<td>10.2%</td>
<td>7.4%</td>
<td>8.1%</td>
<td>3.5%</td>
<td>3.7%</td>
<td>10.4%</td>
</tr>
</tbody>
</table>
</html>

Industrial output in the euro-area is still putting out some good gains. This is despite the fact that the consumer goods sector continues to lag and to decline. Overall EMU output rose by 0.6% m/m in April after a gain of 1.8% in [...]

Euro-Area IP On An Upswing, Except For Consumer Goods

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<a href="/comment/100614a_big.png" name="modal"><img class="large" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614a.png"></a>
Industrial output in the euro-area is still putting out some good
gains. This is despite the fact that the consumer goods sector
continues to lag and to decline. Overall EMU output rose by 0.6% m/m in
April after a gain of 1.8% in March and of 0.8% in February. The
strength is real. In April consumer goods output fell by 0.9% over
three-months, however, consumer goods output is up at just a 1%
annualized rate compared to a 13.5% pace for all of output. 
Capital goods output is growing at a accelerating
pace from 12-months to six months to three months. Intermediate goods
are not quite on such a clear acceleration but growth rates have been
high and steady with strong growth over three-months. Consumer goods
output has accelerated from 12-months to six months and has since been
subdued.
In the quarter to date -just one month into the
new quarter- output is growth sharply over the Q1 base. Output is up at
a 13% pace in Q2 lead by a rise at a 22% pace by intermediate goods and
a 15% pace by capital goods. The quarterly growth rate is held back by
consumer goods where output is shrinking at nearly a 1% annual rate. 
This is a familiar set of facts. We have been
talking about these trends in Europe for some time. The expansion seems
solid enough despite all the concerns. Mount enough concerns and they
can sink the healthiest of economies. But Europe is not there yet. It
still seems to be doing fine. The capital goods and intermediate goods
sectors are driving output ahead, but the lagging consumer goods sector
remains an impediment to getting into that next gear. 
Europe needs to more home grown demand. Europe
needs to get its consumer in gear. But growth is still quite solid and
is not showing any sign of decelerating and certainly none of
declining. With such a sharp drop in the euro in the background I think
investor worries about Europe are entirely in the wrong direction. 


<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<th scope="col" colspan=11>Euro-Area MFG IP</th>
</thead>
<tbody>

<tr class="even">
<td class="firstcol" >Saar
except m/m</td>
<td colspan=3>Mo/Mo</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">Euro-Area
Detail</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Feb 10</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q1</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG</td>
<td>0.6%</td>
<td>1.8%</td>
<td>0.8%</td>
<td>13.5%</td>
<td>19.6%</td>
<td>15.0%</td>
<td>13.8%</td>
<td>9.1%</td>
<td>7.9%</td>
<td>13.1%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-0.9%</td>
<td>1.2%</td>
<td>0.0%</td>
<td>1.0%</td>
<td>9.0%</td>
<td>6.4%</td>
<td>6.1%</td>
<td>2.9%</td>
<td>4.8%</td>
<td>-0.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">C-Durables</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.4%</td>
<td>1.9%</td>
<td>11.4%</td>
<td>6.5%</td>
<td>7.0%</td>
<td>1.2%</td>
<td>1.3%</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">C-Non-durables</td>
<td>-1.2%</td>
<td>1.6%</td>
<td>0.1%</td>
<td>1.9%</td>
<td>10.9%</td>
<td>6.3%</td>
<td>6.1%</td>
<td>3.0%</td>
<td>5.5%</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate</td>
<td>2.2%</td>
<td>1.1%</td>
<td>1.2%</td>
<td>19.7%</td>
<td>12.2%</td>
<td>11.9%</td>
<td>9.1%</td>
<td>15.1%</td>
<td>14.3%</td>
<td>22.1%</td>
</tr>
<tr>
<td class="firstcol">Capital</td>
<td>1.0%</td>
<td>1.7%</td>
<td>0.7%</td>
<td>14.7%</td>
<td>6.8%</td>
<td>9.3%</td>
<td>5.9%</td>
<td>8.1%</td>
<td>5.2%</td>
<td>15.5%</td>
</tr>
<tr class="grey3">
<td colspan=11 class="firstcol">Main Euro-Area Countries and UK IP in
MFG</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan=3>Mo/Mo</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">MFG
Only</td>
<td>Apr 10</td>
<td>Mar 10</td>
<td>Feb 10</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q:4 Date</td>
</tr>
<tr>
<td class="firstcol">Germany:</td>
<td>0.6%</td>
<td>3.9%</td>
<td>0.0%</td>
<td>19.2%</td>
<td>19.3%</td>
<td>9.9%</td>
<td>4.6%</td>
<td>14.1%</td>
<td>10.2%</td>
<td>20.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">France: IPxConstruct'n</td>
<td>-0.3%</td>
<td>1.3%</td>
<td>0.1%</td>
<td>4.5%</td>
<td>10.7%</td>
<td>6.4%</td>
<td>6.9%</td>
<td>7.9%</td>
<td>7.1%</td>
<td>3.6%</td>
</tr>
<tr>
<td class="firstcol">
Italy</td>
<td>1.2%</td>
<td>0.1%</td>
<td>0.5%</td>
<td>7.2%</td>
<td>9.3%</td>
<td>7.0%</td>
<td>6.3%</td>
<td>8.1%</td>
<td>7.4%</td>
<td>8.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Spain</td>
<td>-1.5%</td>
<td>5.4%</td>
<td>1.6%</td>
<td>24.0%</td>
<td>14.8%</td>
<td>2.4%</td>
<td>4.6%</td>
<td>2.8%</td>
<td>5.0%</td>
<td>16.1%</td>
</tr>
<tr>
<td class="firstcol">UK:
EU member</td>
<td>-0.3%</td>
<td>2.2%</td>
<td>1.6%</td>
<td>14.7%</td>
<td>10.2%</td>
<td>7.4%</td>
<td>8.1%</td>
<td>3.5%</td>
<td>3.7%</td>
<td>10.4%</td>
</tr>
</tbody>
</table>
More Industrial Production Data: Japan, Hong Kong
And The Euro Area 
by&nbsp;<a href="/comment/Curley.html">Louise Curley</a> June
14, 2010


<a href="/comment/100614b_big.png" name="modal"><img class="large" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614b.png"></a>
Industrial
production in most countries has shown improvement in the first few
months of this year.&nbsp; Today data for the first quarter for
Hong Kong and for April of this year for Japan and the entire Euro Area
were released.&nbsp; The data are shown in the attached
chart.&nbsp; For comparability, the original index for Hong Kong
based on 2008=100 was changed to 2005=100, the base of the other two
series, using the "advanced function" in DLX. In addition since the
data for Hong Kong are for the manufacturing sector only, we have used
data for the manufacturing data for Japan and the Euro Area instead of
their total industrial production figures that includes mining,
quarrying, electricity, gas and water supply and construction.&nbsp;
Of the two countries and the Euro Area,
manufacturing production in Japan was the first to decline and has
experienced the sharpest decline and recovery.&nbsp;&nbsp; In
April, manufacturing production in Japan was 95.9 (2005-100) 34.7%
above the low point of 71.2 in February, 2009.&nbsp; The comparable
figures for the Euro Area are 9.7% and 88.2 in May 2009.&nbsp; The
data for Hong Kong are quarterly, and therefore, somewhat less volatile
than the monthly figures.&nbsp; By the first quarter of this year,
manufacturing production in Hong Kong was 88.1 (2005=100) or 3.3% above
the low of 85.3 reached in the 3rd quarter of 2009.&nbsp;

<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">IP: Manufacturing (SA,
2005=100)
</th><th scope="col">Apr 10</th>
<th scope="col"Mar 10</th>
<th scope="col">Feb 10</th>
<th scope="col">Jan 10</th>
<th scope="col">Dec 09</th>
<th scope="col">Nov 09</th>
<th scope="col">Oct 09</th>
<th scope="col">Sep 09</th>
<th scope="col">Aug 09</th>
</tr>
</thead>
<tr>
<td class="firstcol">Japan</td>
<td>95.9</td>
<td>94.7</td>
<td>93.6</td>
<td>94.2</td>
<td>90.3</td>
<td>88.0</td>
<td>85.8</td>
<td>84.4</td>
<td>82.9</td>
</tr>
<tr>
<td class="firstcol">Euro Area</td>
<td>96.6</td>
<td>96.1</td>
<td>94.3</td>
<td>93.6</td>
<td>91.8</td>
<td>91.5</td>
<td>90.1</td>
<td>90.1</td>
<td>89.1</td>
</tr>
<tr class="grey2">
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Q1 10</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Q4 09</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>Q3 09</td>
</tr>
<tr>
<td class="firstcol">Hong Kong</td>
<td>--</td>
<td>--</td>
<td>88.1</td>
<td>--</td>
<td>--</td>
<td>85.4</td>
<td>--</td>
<td>--</td>
<td>85.3</td>
</tr>

</table>
Moving Around The United
States 
by&nbsp;<a href="/comment/Moeller.html">Tom Moeller</a> June
14, 2010


<a href="/comment/100614c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614c.png"></a>
<a href="/comment/100614d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614d.png"></a>
 Population growth in the United States has been declining steadily since the early-1990s. Specifically, growth of 1.0% during the last nine years is off from the early-1990s' high of 1.4% and is well below the 1.5%-2.5% growth rates from the mid-1940s to the mid-1960s. Analyzing all of the reasons for the slowdown is beyond the scope of this presentation, yet one thing is clear. The Southern and Western states have seen accelerated growth at the expense of most other sections of the country. 

Suffering the greatest decline has been population growth in the country's extreme Northeast. Maine actually experienced net out-migration last year. Chronically slow population growth also characterizes the Northeast and the Midwestern regions with relatively high housing costs and the falloff in factory sector output as a percent of the economy. Michigan also experienced net outmigration during the last four years.

Net-population advances characterizes states in most other regions of the country. During the last five years the strongest growth rates have been in Wyoming, Texas, North Carolina and Colorado. Relatively low housing costs, an aging population as well as an increased ability to communicate electronically has aided population growth in these states. California, however, has seen population growth decelerate sharply with high unemployment and high home-foreclosures. 
The data used in the above analysis is available in Haver's USPOP database.

<a href="/comment/100614e_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614e.png"></a>
<a href="/comment/100614f_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100614f.png"></a>
<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Population
Growth (%)
</th><th scope="col">2009</th>
<th scope="col"2008</th>
<th scope="col"2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">United States</td>
<td>0.9</td>
<td>0.9</td>
<td>1.0</td>
<td>1.0</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Maine</td>
<td>-0.1</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3</td>
</tr>
<tr class="odd">
<td class="firstcol"> New
Hampshire</td>
<td>0.2</td>
<td>0.3</td>
<td>0.4</td>
<td>0.8</td>
</tr>
<tr>
<td class="firstcol">Vermont</td>
<td>0.1</td>
<td>0.1</td>
<td>0.1</td>
<td>0.2</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">New York</td>
<td>0.4</td>
<td>0.2</td>
<td>0.3</td>
<td>0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">New
Jersey</td>
<td>0.5</td>
<td>0.3</td>
<td>0.1</td>
<td>0.0</td>
</tr>
<tr>
<td class="firstcol">Massachusetts</td>
<td>0.8</td>
<td>0.7</td>
<td>0.5</td>
<td>0.2</td>
</tr>
<tr class="odd">
<td class="firstcol">
Pennsylvania</td>
<td>0.3</td>
<td>0.4</td>
<td>0.4</td>
<td>0.4</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"> Louisiana</td>
<td>1.0</td>
<td>1.7</td>
<td>3.2</td>
<td>-5.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Virginia</td>
<td>1.1</td>
<td>1.0</td>
<td>1.0</td>
<td>1.1</td>
</tr>
<tr>
<td class="firstcol"> North
Carolina</td>
<td>1.5</td>
<td>2.0</td>
<td>2.2</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Georgia</td>
<td>1.4</td>
<td>1.7</td>
<td>2.2</td>
<td>2.6</td>
</tr>
<tr>
<td class="firstcol">Florida</td>
<td>0.7</td>
<td>0.8</td>
<td>1.1</td>
<td>1.1</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol"> Michigan</td>
<td>-0.3</td>
<td>-0.5</td>
<td>-0.3</td>
<td>-0.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Illinois</td>
<td>0.5</td>
<td>0.5</td>
<td>0.5</td>
<td>0.3</td>
</tr>
<tr>
<td class="firstcol">Indiana</td>
<td>0.5</td>
<td>0.7</td>
<td>0.7</td>
<td>0.8</td>
</tr>
<tr class="odd">
<td class="firstcol"> Minnesota</td>
<td>0.7</td>
<td>0.8</td>
<td>0.8</td>
<td>0.8</td>
</tr>
<tr>
<td class="firstcol">Ohio</td>
<td>0.1</td>
<td>0.1</td>
<td>0.3</td>
<td>0.2</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp; </td>
</tr>
<tr>
<td class="firstcol">Kansas</td>
<td>0.8</td>
<td>0.8</td>
<td>0.7</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Texas</td>
<td>2.0</td>
<td>2.0</td>
<td>2.0</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">Arizona</td>
<td>1.5</td>
<td>2.2</td>
<td>2.8</td>
<td>3.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Colorado</td>
<td>1.8</td>
<td>1.9</td>
<td>1.9</td>
<td>2.0</td>
</tr>
<tr class="even">
<td colspan=5>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Wyoming</td>
<td>2.1</td>
<td>1.8</td>
<td>2.1</td>
<td>1.3</td>
</tr>
<tr class="odd">
<td class="firstcol">
California</td>
<td>1.0</td>
<td>1.0</td>
<td>0.7</td>
<td>0.5</td>
</tr>
<tr>
<td class="firstcol">
Washington</td>
<td>1.5</td>
<td>1.6</td>
<td>1.5</td>
<td>1.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Nevada</td>
<td>1.0</td>
<td>1.9</td>
<td>3.0</td>
<td>3.5</td>
</tr>
</tbody>
</table>
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<a href="/comment/100611i_big.png" name="modal"><img class="large" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100611i.png"> </a> Business inventories indeed have started to
increase, but the rate of accumulation has been modest. April
inventories posted a 0.4% increase and it was the sixth gain in seven
months. The rise was enough to slow the y/y rate of decumulation to
2.8% from -14.3% last summer, but the value of inventories remained
down 12.5% from the 2008 peak. Moreover, the increases have not kept up
with the improvement in sales and the I/S ratio remained at its
historic low of 1.23.
 Retail inventories have started to rise and the
0.2% April uptick was the fifth modest increase following sharp
declines during 2008 &amp; 2009. Nevertheless, the level of
inventories remained 13.6% below the 2008 peak. Accumulation this year
owes to modest gains in the auto sector. Less autos, accumulation began
only in March and it's been slight. Year-to-year inventories still are
down 1.3% versus the peak decumulation rate of 7.7% last fall. The
slowdown has been led by furniture &amp; general merchandise stores
while the decline in apparel store inventories has finally abated to
-6.7% y/y.

Inventory accumulation in the factory sector compares with sharp
decumulation through most of 2009. It has been accompanied by higher
wholesale inventories, but here the improvement has been raised by
higher oil prices. Less oil, wholesale inventories have been virtually
flat for all of this year (-5.7% y/y).
 The
business sales and inventory data are available in Haver's USECON
database.
<a href="/comment/100611j_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100611j.png"></a>
<a href="/comment/100611k_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100611k.png"></a>

<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Business Inventories(%)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">April y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr></thead><tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.4</td>
<td>0.7</td>
<td>0.6</td>
<td>-2.8</td>
<td>-9.8</td>
<td>0.8</td>
<td>4.0</td>
</tr>
<tr>
<td class="firstcol">Retail</td>
<td>0.2</td>
<td>0.9</td>
<td>0.2</td>
<td>-3.8</td>
<td>-10.4</td>
<td>-3.3</td>
<td>2.5</td>
</tr>
<tr>
<td class="firstcol">
Retail excl. Auto</td>
<td>0.4</td>
<td>1.1</td>
<td>-0.1</td>
<td>-1.3</td>
<td>-4.9</td>
<td>-1.9</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol"> Wholesale</td>
<td>0.4</td>
<td>0.7</td>
<td>0.6</td>
<td>-3.2</td>
<td>-10.5</td>
<td>3.7</td>
<td>6.4</td>
</tr>
<tr>
<td class="firstcol">Manufacturing</td>
<td>0.5</td>
<td>0.5</td>
<td>1.0</td>
<td>-1.6</td>
<td>-8.7</td>
<td>2.2</td>
<td>3.7</td>
</tr>
</tbody>
</table>

</body></html>

Business inventories indeed have started to increase, but the rate of accumulation has been modest. April inventories posted a 0.4% increase and it was the sixth gain in seven months. The rise was enough to slow the y/y rate of [...]

U.S. Business Inventories Again Rise Moderately

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<a href="/comment/100611f_big.png" name="modal"><img class="large" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100611f.png"></a>The University of Michigan
indicated that its mid-June measure of consumer sentiment added to
earlier gains and rose to 75.5, its highest level since January 2008.
Since its low late in 2008 the measure has risen by more than
one-third. During the last ten years there has been an 89% correlation
between the level of sentiment and the y/y change in real consumer
spending.
The index of expected economic conditions led
last month's advance with a 2.8% increase to 70.7. The index was up
43.7% from the 2008 low. The readings for the expected change in
personal finances (-3.3% y/y) and expected five-year business
conditions (1.2% y/y) both improved. Expectations for business
conditions during the next year slipped (+14.5% y/y).
Sentiment about current economic conditions also
improved to the highest level since early-2008 and it was up 44.2% from
the 2008 low. The assessment of current personal finances continued its
steady improvement and buying conditions for large household goods,
including furniture, refrigerators, stoves &amp; televisions, rose
back to its highest level since early-2008&nbsp; (12.4%
y/y).
Expected price inflation during the next year
fell sharply m/m to 3.1% but remained up from the December 2008 reading
of 1.7%.&nbsp;Respondents' view of government policy, which may
eventually influence economic expectations, rose m/m to its highest
level since January but remained&nbsp; down sharply from its high
last May. Sixteen percent of respondents thought that a good job was
being done by government versus 36% who thought a poor job was being
done.

The Reuters/University of Michigan survey data are not seasonally
adjusted. The reading is based on telephone interviews with about 500
households at month-end. These results are based on about 320
interviews. The summary indexes are in Haver's USECON database
with details in the proprietary UMSCA database.


The "Inflation" in Inflation Targeting from
the Federal Reserve Bank of San Francisco is available <a href="http://www.frbsf.org/publications/economics/letter/2010/el2010-17.html">here</a>.
<a href="/comment/100611g_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100611g.png"></a>
<a href="/comment/100611h_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100611h.png"> </a>

<table cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
 <thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF14/@EF1402/@EF1402.HTM" ;="">University of Michigan</a> </th>

<th scope="col">Mid-June</th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">Juney/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr></thead><tbody>
<tr>
<td class="firstcol">Consumer Sentiment </td>
<td>75.5</td>
<td>73.6</td>
<td>72.2</td>
<td>6.6%</td>
<td>66.3</td>
<td>63.8</td>
<td>85.6</td>
</tr>
<tr>
<td class="firstcol">Current Conditions </td>
<td>82.9</td>
<td>81.0</td>
<td>81.0</td>
<td>13.3</td>
<td>69.6</td>
<td>73.7</td>
<td>101.2</td>
</tr>
<tr>
<td class="firstcol">Expectations</td>
<td>70.7</td>
<td>68.8</td>
<td>66.5</td>
<td>2.2</td>
<td>64.1</td>
<td>57.3</td>
<td>75.6</td>
</tr>
</tbody>
</table>

</html>

The University of Michigan indicated that its mid-June measure of consumer sentiment added to earlier gains and rose to 75.5, its highest level since January 2008. Since its low late in 2008 the measure has risen by more than one- [...]

U.S. Consumer Sentiment Gains Upward Momentum

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<a href="/comment/100611e_big.png" name="modal"><img class="large" align="left" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100611e.png"></a>
The German harmonized inflation rate rose by 01% in May, Germany's
domestic headline inflation measure fell by 0.1% with the core up at a
sharp +0.5% offsetting last month's 0.4% drop. 
 Headline inflation in Germany is steadily
increasing with the annualized rate climbing over shortening time spans
at 1.2% over 12-mos, 1.3%over 6-mos and 2.6% over 12-mos. Core
inflation is still tempered at a 1.5% three-month pace in May. But it
is not showing clear acceleration as the 1.5% standing is higher than
both the Yr/Yr and the six-month pace but the six month pace shows
deceleration from 12-months. On balance there are some core pressures
but they are not as steady building as for headline inflation.
 How widespread is inflation's acceleration? Using
the main 11 categories in the table inflation is accelerating over
three-months compared to six months in 63% of the categories. It'
acceleration over six months compared to 12-months is only in only 36%
of the categories. It is accelerating Yr/Yr compared to the pace of one
year ago in 54% of the categories. On balance there is evidence of
inflation and it is most acute over three-months where the measurement
is the least reliable and most volatile. Apart from the 3-month
diagnostic, inflation's acceleration does not seem that sharp or
widespread. 
 One key for the ECB is going to be how to deal
with oil that has been booming and busting and wreaking havoc with
price trends and with inflation more generally. A second key will be to
see how it deals with all the financial distress in the region. There
is not only financial distress but national austerity plans in train.
With all of these negative growth shocks we would expect the ECB to be
a bit more inflation-tolerant than it might be in other times. But that
is still a question for the policymakers. After all, stimulus is being
breathed into the euro-economy by the ever weakening currency. And with
that comes some added inflation threat to counter the downside growth
risks. What will the ECB do? That is what we will be watching to see. I
expect temperance but I am ever wary. 



<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th colspan=8 scope="col">German HICP and CPI details</th>
</tr></thead>

<td>&nbsp;</td>
<td colspan=3>Mo/Mo %</td>
<td colspan=3>Saar %</td>
Yr/Yr

<tr class="even">
<td>&nbsp;</td>
<td>May-10</td>
<td>Apr-10</td>
<td>Mar-10</td>
<td>3-Mo</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>Yr
Ago</td>
</tr>
<tr>
<td class="firstcol">HICP Total</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>0.6%</td>
<td>1.9%</td>
<td>1.1%</td>
<td>1.2%</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">Core</td>
<td>#N/A</td>
<td>-0.5%</td>
<td>0.4%</td>
<td>#N/A</td>
<td>#N/A</td>
<td>#N/A</td>
<td>1.2%</td>
</tr>
<tr class="even">
<td colspan=8 class="firstcol">CPI
</td>
</tr>
<tr>
<td class="firstcol">All</td>
<td>-0.1%</td>
<td>0.2%</td>
<td>0.6%</td>
<td style="color:red;">2.6%</td>
<td>1.3%</td>
<td>1.2%</td>
<td>0.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">
CPIxF&amp;E</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>0.3%</td>
<td style="color:red;">1.5%</td>
<td>0.4%</td>
<td>0.7%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">Food</td>
<td>-0.4%</td>
<td>0.6%</td>
<td>1.1%</td>
<td style="color:red;">5.2%</td>
<td>3.9%</td>
<td style="color:red;">1.1%</td>
<td>-1.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Alcohol</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>1.1%</td>
<td>1.2%</td>
<td style="color:red;">3.1%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">Clothing
&amp; Shoes</td>
<td>0.3%</td>
<td>0.2%</td>
<td>0.4%</td>
<td>3.5%</td>
<td>3.8%</td>
<td>1.2%</td>
<td>1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Rent
&amp;Util</td>
<td>0.0%</td>
<td>0.5%</td>
<td>0.4%</td>
<td style="color:red;">3.3%</td>
<td>2.0%</td>
<td style="color:red;">1.0%</td>
<td>0.4%</td>
</tr>
<tr>
<td class="firstcol">Health
Care</td>
<td>0.1%</td>
<td>-0.2%</td>
<td>0.1%</td>
<td style="color:red;">0.0%</td>
<td>-0.2%</td>
<td>0.2%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Transport</td>
<td>-0.7%</td>
<td>-0.2%</td>
<td>1.1%</td>
<td>0.7%</td>
<td>0.7%</td>
<td style="color:red;">4.1%</td>
<td>-3.9%</td>
</tr>
<tr>
<td class="firstcol">Communication</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.7%</td>
<td style="color:red;">-1.8%</td>
<td>-2.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Rec
&amp;Culture</td>
<td>1.8%</td>
<td>-2.7%</td>
<td>1.0%</td>
<td>0.0%</td>
<td>-0.4%</td>
<td>-0.3%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Education</td>
<td>-0.8%</td>
<td>-1.6%</td>
<td>-0.6%</td>
<td>-11.2%</td>
<td>-5.3%</td>
<td style="color:red;">-1.3%</td>
<td>-5.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Restaurant
&amp; Hotel</td>
<td>0.4%</td>
<td>-1.0%</td>
<td>1.3%</td>
<td style="color:red;">2.6%</td>
<td style="color:red;">1.3%</td>
<td>1.1%</td>
<td>2.6%</td>
</tr>
<tr>
<td class="firstcol">Other</td>
<td>0.2%</td>
<td>0.5%</td>
<td>0.0%</td>
<td style="color:red;">2.6%</td>
<td>-0.7%</td>
<td>0.8%</td>
<td>1.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Diffusion</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td style="color:red;">63.6%</td>
<td>36.4%</td>
<td>54.5%</td>
<td>--&nbsp;</td>
</tr>
<tr class="grey2">
<td class="firstcol">Type:</td>
<td colspan=3>Diffusion:
Current Compared to</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Yr-Ago</td>
<td>--</td>
</tr>



</html>

The German harmonized inflation rate rose by 01% in May, Germany's domestic headline inflation measure fell by 0.1% with the core up at a sharp +0.5% offsetting last month's 0.4% drop. Headline inflation in Germany is steadily [...]

German Inflation Perks Up; Core Rate In Mild Rebound From Lows

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

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

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Andrew Cates

**The Global Monetary Policy Consensus**
The latest Blue Chip Financial Forecasts survey points to a notably more balanced global monetary policy outlook over the coming year. In contrast to the pronounced easing bias that dominated much of the past two years, expectations are now more symmetric, with a similar number of central banks projected to raise rates as to ease policy. Japan is seen delivering further tightening, while Canada is expected to initiate an interest rate hike in coming months. In Australia’s case, this tightening guidance was reinforced this week, with the Reserve Bank lifting its policy rate by 25 basis points. Elsewhere, and in contrast, the euro area, UK and US are expected to move in the opposite direction.

260205Z1.jpg

**US manufacturing activity**
The second chart underscores the recent improvement in US economic momentum, highlighted by an unexpected surge in the January ISM manufacturing PMI. After spending much of the past year hovering below the 50 threshold consistent with stagnation, the index jumped sharply back into expansionary territory, signalling a renewed pickup in industrial activity. This rebound has coincided with a broader run of stronger-than-anticipated US economic data, as reflected in the upswing in the Citigroup Economic Surprise Index. Together, these developments point to a US economy that continues to display notable resilience, complicating expectations of monetary easing in the near term.

260205Z2.jpg

**US Bank Lending Standards and Financial Stress** 
The next chart turns to US financial conditions, highlighting the latest readings from the Senior Loan Officer Opinion Survey. The net proportion of banks tightening lending standards on corporate loans and mortgages is now more modest by historical standards, and well below the extremes seen during past episodes of financial stress. Some easing in credit headwinds has occurred alongside relatively subdued readings on the OFR Financial Stress Index, which continues to hover below its long-run average. Together, these indicators suggest that the US financial system has continued to avoid the kind of acute stress typically associated with sharp slowdowns in credit availability—helping to underpin the recent resilience in economic activity.

260205Z3.jpg

**Semiconductor Sales**
The fourth chart highlights the renewed surge in global semiconductor sales, with momentum strengthening sharply over recent months across the Americas, China and the broader Asia-Pacific region. After the cyclical downturn in 2022–23, sales have rebounded to fresh highs, reflecting a powerful revival in demand for advanced chips and related technologies. This upswing has taken place amid intense investor preoccupation with artificial intelligence, with expectations that AI adoption will drive a sustained wave of capital spending on data centres, cloud infrastructure and high-performance computing. In contrast, semiconductor sales in Europe remain comparatively subdued, reflecting the region’s smaller footprint in high-end chip manufacturing, weaker industrial demand, and the ongoing impact of slower economic growth. While semiconductors are inherently cyclical, markets have increasingly interpreted the current rebound elsewhere as structural rather than purely cyclical—underpinned by the belief that AI represents a transformative and durable source of demand growth.

260205Z4.jpg

**Large-Scale AI Models**
The next chart illustrates the rapid proliferation of large-scale AI models globally, with newly updated data for 2025 pointing to a further sharp acceleration in development activity. The United States continues to lead by a wide margin, while China has also seen a steep rise in model deployment in recent years, underscoring the intensifying technological competition between the two economies. Growth in the UK and other regions has been more modest by comparison, highlighting the increasingly concentrated nature of AI innovation. Taken together with the surge in semiconductor sales, these trends help explain the market’s strong preoccupation with AI as a potential driver of future productivity and investment cycles—although the geographic concentration of activity also raises questions about the uneven distribution of any resulting economic gains.

260205Z5.jpg

**An AI Bubble?** 
The final chart draws on the latest Blue Chip Financial Forecasts special questions, highlighting market participants’ perceptions of the economic gains likely to be delivered by artificial intelligence. While a sizeable share of respondents still believe that financial markets may be overestimating AI’s potential benefits, an increasing proportion now judge current expectations to be broadly accurate, with only a small minority viewing the gains as underestimated. Notably, this represents a softening in scepticism compared with the survey results from last month, when concerns about excessive market optimism were more pronounced. The shift suggests a growing acceptance that AI-related investment and innovation could translate into meaningful economic impacts—though uncertainty remains high around the scale, timing and distribution of these gains.

260205Z6.jpg

Financial markets have experienced renewed gyrations in recent weeks, as shifting geopolitical risks, questions around Federal Reserve independence, renewed talk of US dollar “debasement,” and ongoing enthusiasm surrounding artificial intelligence have combined to drive volatility across asset classes. These cross-currents have also contributed to a degree of rotation away from high-flying technology stocks, as investors reassess valuations and the timing of anticipated AI-driven gains. Against this backdrop, the charts in this week’s COTW highlight several important themes. Policy rate expectations now appear more balanced globally, marking a clear shift away from the one-sided easing bias of the past two years (chart 1), even as resilient US data—underscored by the unexpected jump in the January ISM index and a run of positive economic surprises—continues to complicate the outlook for monetary easing (chart 2). At the same time, US financial conditions remain relatively benign, with limited evidence of widespread credit stress or aggressive tightening in lending standards (chart 3). Meanwhile, the sharp rebound in semiconductor sales and the accelerating rollout of large-scale AI models underscore why investors remain so focused on the AI narrative, even as Europe lags behind due to weaker industrial momentum and a smaller footprint in advanced chip production (charts 4 and 5). Finally, while some scepticism about AI’s ultimate economic impact persists, the latest survey results suggest a moderation in concerns that markets are materially overestimating its gains (chart 6). Taken together, these developments paint a picture of a US economy that remains more resilient than many had anticipated, set against a financial landscape increasingly shaped by powerful—if sometimes competing—narratives around geopolitics, policy, and technological transformation.

Charts of the Week: Balanced Policy, Resilient Data and AI Narratives

260206E.jpg

With the December report, Germany’s production and some of the early European industrial production data reveal a good deal of chaos in terms of the embedded trends. On the month, German industrial production fell by 1.9%, with consumer goods output up by 0.5%, capital goods output falling by 5.3%, and intermediate goods output falling by 1.2%. Among the early reporters in the monetary union—France, Spain, and Portugal—only Spain showed an increase in manufacturing IP in December; however, Spanish industrial production is notoriously volatile.

**Broader IP trends in Germany and elsewhere in Europe**
As for other early industrial production reporters, both Sweden and Norway showed strong-to-solid gains in December and each of them showed two-months of gains in a row. Beyond that, sequential growth rates from 12-months to six-months to three-months show accelerating growth in German consumer goods output against decelerating growth for intermediate goods. Real manufacturing output and real sales show mixed results- no clear trends; however, real manufacturing orders in Germany are off the map strong. 

**German manufacturing/industrial Surveys**
German industrial surveys from the IFO for manufacturing shows persistent weakening as well as for IFO manufacturing expectations, and in the EU Commission industrial index in the last three months. More broadly, Germany shows some modest but ongoing step up all of these based on average levels from 12-months to six-months to three-months for IFO expectations and the EU Commission industrial readings with mixed results for other survey readings.

**IP trends in Europe**
For the early reporting EMU members France, Spain, and Portugal, who report industrial production trends, each show mixed monthly trends against ongoing decelerations for manufacturing output over the broader sequential periods (12-month, to 6-month, to 3-month). However, for other Europe, Sweden and Norway, manufacturing trends are steadily accelerating on this broader timeline.

**A feeling of ‘Deja- What?’**
These combinations of opposed trends mixed with a lack of trends leave us with this sense of confusion about what's going on in manufacturing. For Germany, the extreme strength in orders is reassuring since orders should be forward-looking rather than backward-looking or even contemporaneous. But orders can also be a fickle series and so we'll have to watch it to see if the trends for German orders hold up.

**Current quarter-What’s been happening now**
In addition, current quarter growth for Germany actually looks quite good with industrial production up 3.7% at an annual rate in the current quarter, led by output increases in manufacturing against a decline in the intermediate goods output. Real orders in the quarter are surging at a 44% growth rate, while real sales in manufacturing only had a 0.1% uptick at an annual rate. The industrial indicators for Germany in the quarter show weakness or flatness with the only exception being IFO manufacturing expectations that advanced by a small amount. The three EMU members who report industrial production data show positive growth in the just-completed quarter except for Portugal where industrial production is falling at a 2.9% rate in the fourth quarter. Sweden and Norway, European countries but not monetary union members, show a strong 22% annual rate gain in Sweden against the 3% annual rate decline in Norway.

260206.jpg

**Rankings**
**How growth rates stack up…**
Moving away from short-term trends, the rankings of growth rates of these various metrics using 12-month growth rates on data back to 2006, show below-median growth rates for German industrial production and all three of its major sectors. All of them have rankings below the 50% mark where the median resides. Germany’s manufacturing output growth rate is below its median as is the growth of real sales; and once again real manufacturing orders break out and show a stunning 90th percentile standing, extremely strong compared to other growth rates on this period.

**Indicator rankings are poor**
However, the survey based industrial indicators for Germany, ranked based on their index levels, are all extremely weak and much weaker than German sector or other German metrics. The strongest indicator reading is the 29th percentile standing for IFO manufacturing expectations while the current ZEW index, IFO manufacturing index, and the EU Commission industrial readings, all reside below their 15th percentile. The survey rankings suggest that industrial sentiment is in much worse shape than activity and growth.

**IP elsewhere in Europe**
However, the growth ranking of manufacturing industrial production for the reporting EMU members and other European members are all quite solid, with percentile standings ranging from the 66th up to the 93rd percentile.

**Summing up**
From these data, Germany emerges as the weak economy compared with historic norms based on industrial production growth and indicator readings. However, there's a glimpse of positivity from the growth of real orders, and at the same time, some concern about ongoing sentiment for manufacturing in Germany as distinct from actual performance.

Germany

German IP Reveals Chaotic Trends

Winnie Tapasanun

260205X15.jpg

260205Y15.jpg

**Total job openings** fell 5.6% m/m (-12.9% y/y) to 6.542 million in December after a downwardly revised 7.0% decline to 6.928 million in November (previously -4.1% m/m; 7.146 million), according to the Job Openings and Labor Turnover Survey. December marked the third consecutive m/m fall and the lowest level since September 2020. The job openings rate declined to 3.9% in December, the lowest since April 2020, from 4.2% in November, remaining below a record-high 7.4% in March 2022. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings. Significantly, the drop in job openings also lowered the **ratio of job openings to unemployed individuals** to 0.872 in December—the lowest since March 2021—from 0.890 in November, down from 1.085 in December 2024 and a pre-pandemic 1.211 in February 2020. A reading of 0.872 implies there were about 0.87 open jobs per unemployed person—indicating fewer openings than unemployed workers. December was the fifth time in six months that this ratio remained below 1.0.

**Private sector job openings** fell 6.8% (-12.5% y/y) to 5.804 million in December after a 6.6% fall to 6.227 million in November, registering the third successive m/m decline and the lowest level since September 2020. The private sector job openings rate fell to 4.1% in December, the lowest since April 2020, from 4.4% in November. The December m/m decline in private sector openings reflected drops of 27.7% (-36.9% y/y) in financial activities, 20.2% (-25.5% y/y) in professional & business services, 14.4% (-5.1% y/y) in trade, transportation & utilities, and 5.2% (-12.4% y/y) in private educational & health services. To the upside, private sector openings in the following categories rose m/m in December: other services (21.1%; 11.0% y/y), mining & lodging (17.6%; 0.0% y/y), information (13.5%; -4.7% y/y), manufacturing (8.5%; 0.5% y/y), leisure & hospitality (7.5%; -17.2% y/y), and construction (2.8%; 42.4% y/y). Meanwhile, government job openings rose 5.3% (-15.6% y/y) in December, the first m/m rise in three months, after a 10.6% drop in November.

**Total hiring** rebounded 3.4% (-1.5% y/y) to 5.293 million in December, the first m/m increase since September, following a 4.6% decrease to 5.121 million in November. The hiring rate edged up to 3.3% in December from 3.2% in November, though it remained below pre-pandemic levels. **Private sector hiring** rose 3.1% (-0.4% y/y) to 4.978 million in December, the third m/m rise in four months, after a 4.0% decline to 4.826 million in November. The private sector hiring rate rose to 3.7% in December from 3.5% in November, the same as in October and September. The December m/m increase in private sector hiring was led by a 32.1% jump (42.3% y/y) in information, followed by gains of 24.0% (-4.6% y/y) in financial activities, 23.5% (0.0% y/y) in mining & lodging, 6.5% (-4.8% y/y) in private educational & health services, 4.2% (-4.9% y/y) in trade, transportation & utilities, 3.6% (6.1% y/y) in construction, 3.4% (7.9% y/y) in leisure & hospitality, and 1.8% (-4.3% y/y) in manufacturing. To the downside, private sector hiring in professional & business services (-5.2%; +0.5% y/y) and other services (-4.3%; -16.5% y/y) declined m/m in December. Meanwhile, government hiring rebounded 6.4% (-16.3% y/y) in December, the first m/m rise since September, following a 13.5% drop in November.

**Total separations** rose 2.1% (3.3% y/y) to 5.251 million in December after a 1.5% rise to 5.144 million in November, marking the third m/m increase in four months and the highest level since September. The total separations rate edged up to 3.3% after holding at 3.2% in November and October. Private sector separations rose 1.6% (4.2% y/y) to 4.932 million in December, the highest level since June, while government sector separations jumped 10.4% (-9.1% y/y) to 319,000 following two consecutive m/m declines. **Total quits** (voluntary separations initiated by the employee) increased 0.3% (3.5% y/y) to 3.204 million in December, the third m/m rise in four months and the highest level since June, after a 7.4% rebound in November. The quits rate (a measure of workers’ willingness or ability to leave jobs) held at 2.0% in December and November, slightly below 2.3% in February 2020. Private sector quits eased 0.2% (+4.5% y/y) following an 8.4% November rebound. **Layoffs and discharges** (involuntary separations initiated by the employer) increased 3.6% (5.6% y/y) to 1.762 million in December, up for the third time in four months, after an 8.1% drop in November. The layoffs & discharges rate remained at 1.1% in December and November, marginally below 1.3% in February 2020. Private sector layoffs grew 4.3% (7.8% y/y) following a 7.3% November decrease.

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

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- Job openings down 5.6% (-12.9% y/y) to 6.542 mil., third straight m/m decline.
- Hiring up 3.4% (-1.5% y/y) to 5.293 mil., first m/m increase since September.
- Separations rise to a three-month high; quits reach a six-month high; layoffs rebound.

U.S. JOLTS: Openings Drop to Lowest Level Since Sept. ’20; Hiring Rebounds in December

Sandy Batten

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Initial claims for unemployment insurance jumped 22,000 to 231,000 in the week ended January 31 following an unrevised 209,000 in the prior week. The four-week average rose to 212,250 from 206,250. The Action Economics Forecast Survey looked for 213,000 claims to have been filed. Winter Storm Fern and the accompanying very cold temperatures could have provided a temporary boost. Historically speaking, claims remain at low levels.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—increased by 25,000 to 1.844 million in the week ending January 24, from a downwardly revised 1.819 million in the prior week (previously 1.827 million). The insured unemployment rate remained at 1.2% in the week of January 24, unchanged from the previous eight weeks.

The insured unemployment rate varied greatly across individual states and territories. In the week ending January 17, the highest unemployment rates were in Rhode Island (2.83%), New Jersey (2.77%), Massachusetts (2.67%), Washington (2.54%), and Minnesota (2.45%). The lowest rates were in Florida (0.30%), North Carolina (0.42%), Louisiana (0.43%), Alabama (0.46%), and Arkansas (0.47). Rates in other notable states include Illinois (2.15%), California, (2.08%), New York (2.02%), Pennsylvania (1.91%), and Texas (1.09%). 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.

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- New claims jumped 22,000 to 231,000, the highest level since December 6.
- Continuing claims rose to 1.844 million from 1.819 million.

U.S. Initial Unemployment Claims Surged in Latest Week

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German real orders in December adjusted for inflation rose strongly again, gaining 7.8% month-to-month after rising 5.7% month-to-month in November. Foreign orders were up by 5.6% in December compared to 5.2% in November. Domestic orders surged by 10.7% in December after rising 6.4% in November and 10% in October.

**Real sales**
Real sales were mixed in December with overall sales falling 1.4% month-to-month mostly on weakness in capital goods sales.

**Broad categorical acceleration**
Many flows are accelerating this month. Sequential growth rates show acceleration. Total real orders accelerate from a year ago, to the current year, to six-months, and to three-months. Sales growth rates for consumer goods, consumer nondurables, and intermediate goods all show accelerations in gear. The exceptions are foreign orders that are not as strong over six months compared to their 12-month growth. And on the sales side, consumer durables sales and capital goods sales are weak.

**Quarter-to-quarter**
Quarterly annualized growth is complete for Q4 with this report. Foreign orders are the ‘weak flow’ expanding at a 13.6% annual rate – certainly not a weak growth rate. But domestic real orders are up at an astounding 101.9% annual rate. The net impact on the total real orders growth is to lift it to a pace of 44.1%. 

**Order ranking is very strong**
The table provides two rankings: one based on the level of variables and the other based on its year-on-year growth. The rankings this month for real orders overall, foreign, and domestic orders all reside in their top 80th to 90th percentiles- extremely strong based on level or growth. Sales do not follow suit. This gives us some reason to suspect that there is some lumpiness involved in the manufacturing data as distinct from strength. That will be something to watch. Overall mining and manufacturing sales growth is essentially at its historic median at a rank of 49.8. However, capital goods, intermediate goods and manufacturing sales all have rankings at or above their medians - as high as a 61-percentile standing for capital goods.

**Industrial confidence**
Industrial confidence for Germany, France, Italy and Spain (the EU’s big-four economies) show rankings based on these survey levels that are much lower at the 11th percentile for Germany, the 42nd and 36th percentiles, for France and Italy, respectively. Spain scores better with a 61.8 percentile standing on its industrial confidence measure. 

On balance, there is now an accelerating profile that is broad in sales trends and especially strong order trends. Perhaps Europe, under the pressure to stimulate its miliary capabilities, has a core of demand to help drive output ahead more consistently. This is something to watch in the coming months.

Economy in Brief

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U.S. Import Prices Fall With Lower Oil Costs

Moving Around The United States

More Industrial Production Data: Japan, Hong Kong And The Euro Area

Euro-Area IP On An Upswing, Except For Consumer Goods

Euro-Area IP On An Upswing, Except For Consumer Goods

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U.S. Consumer Sentiment Gains Upward Momentum

German Inflation Perks Up; Core Rate In Mild Rebound From Lows