Louise Curley

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525k.jpg" height="265" width="314"> <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525l.jpg" height="265" width="314"></p>
<p>Just how the
European consumers and producers are reacting to the on going financial
problems of the Euro Area can be inferred, to some degree, from
measures of confidence. Two of these were published today--Consumer
Confidence in Italy and Producer Confidence in the Netherlands.</p>
<p> In
Italy, the ISAE (Instituto di Studi e Analisi Economica) index
(1980=100) of consumer confidence fell in May to 105.4 from 107.9 in
April.&nbsp; The index is now down 7.2% from the recent peak of
113.6 in December, 2009.&nbsp; The overall indicator is based on
the consumers' appraisals of the general economic situation, one's
personal economic situation, the current situation and the future
situation.&nbsp; Clearly confidence of the Italian consumers has
been shaken by current events.&nbsp; The index for the general
economic situation was reduced by 5.8% in May and the index for the
future situation by 3.8%.&nbsp; The appraisal of the future
situation is now close to the all time low reached in December
2008.&nbsp; The indexes for one's personal economic situation and
the current situation were reduced by only 0.3% and 0.5% respectively.
The four underlying appraisals are shown in the first chart.</p>
<p>In
contrast to the Italian consumer, the Dutch producer has become less
pessimistic in May than he was in April as can be seen in the second
chart.&nbsp; The measure of producer confidence published by the
Central Bureau of Statistics in the Netherlands is in the form of a
percent balance between optimists and pessimists.&nbsp; Producer
confidence in the Netherlands has not been strong.&nbsp; Ever since
August 2008, the pessimists have outweighed the optimists.&nbsp; A
peak excess of pessimists, 23.5%, was reached in February,
2009.&nbsp; Since then there has been a fairly steady decline in
the pessimists but it was only in May of this year that there was an
excess, though a small one, 0.4%, of optimists over pessimists. One
factor that may account for some of the difference in the reactions of
consumers and producers to the current financial turmoil is the
declinein the euro.&nbsp; A lower euro is good for exports and
hence for producers, while a lower euro makes imports more expensive
and hence is bad for consumers.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col"><b>May 10&nbsp;</b></th>
<th scope="col"><b>Apr 10&nbsp;</b></th>
<th scope="col"><b>Mar 10</b></th>
<th scope="col"><b>Feb 10</b></th>
<th scope="col"><b>Jan 10</b></th>
<th scope="col"><b>Dec 09</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Italy: Consumer
Confidence (1980=100)</td>
<td>105.4</td>
<td>107.9</td>
<td>106.3</td>
<td>107.6</td>
<td>111.6</td>
<td>113.6</td>
<td>112.7</td>
<td>111.7</td>
</tr>
<tr>
<td class="firstcol">Neth: Producer
Confidence (% Balance)</td>
<td>0.4</td>
<td>-1.4</td>
<td>-3.5</td>
<td>-5.0</td>
<td>-6.5</td>
<td>-8.1</td>
<td>-5.0</td>
<td>-7.2</td>
</tr>
</tbody>
</table>
</span>
</body></html>

Just how the European consumers and producers are reacting to the on going financial problems of the Euro Area can be inferred, to some degree, from measures of confidence. Two of these were published today--Consumer Confidence in [...]

Italian Consumers More Pessimistic But Dutch Producers A Little Less Pessimistic

Robert Brusca

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<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525m.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>EMU order surged in March climbing at a 5.2% month to month
after rising by 1.9% M-o-M in February. The three months growth rate is
at 24.5% up from 17.3% over six months and 19.2% over 12-months. Orders
strength is being lead by &#8216;foreign orders&#8217; as that series is up a 33%
annualized rate over three months compared to a 9.5% pace for domestic
orders. But IN March domestic orders pulled ahead rising by 9.4% in the
month compared to again of 6.2% for foreign orders.</p>
<p>German and French orders were up very strongly in March as
Italian orders rose but not as briskly. German orders are building to a
hectic pace rising at a three-month pace of just under 60% at an annual
rate while in France the three-month pace is -22%. Italian orders are
off at a three month annualized rate of -8.7%.</p>
<p>Manufacturing in the zone is seeing all sorts of divergences
across countries right now. It is curious that concerns about Europe
are sweeping across the continent as some excellent economic activity
statistics are being posted. As of March the evidence is that the
Euro-economy was still building a head of steam although there are
differences across EMU member countries to be sure. Once again we get
evidence that as financial sector worries have mounted the euro-economy
is being underpinned by an event stronger economic recovery than had
been appreciated.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col"><b>Euro-Area-16
and UK Industrial Orders</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Saar except m/m</td>
<td style="font-weight: bold;" colspan="3">Mo/Mo</td>
<td style="font-weight: bold;">Mar-10</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">Mar-10</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">Mar-10</td>
<td style="font-weight: bold;">Feb-10</td>
</tr>
<tr class="grey3">
<td style="font-weight: bold;" class="firstcol">Euro-Area Overview</td>
<td style="font-weight: bold;">Mar<br>10</td>
<td style="font-weight: bold;">Feb<br>10</td>
<td style="font-weight: bold;">Jan<br>10</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">6mo</td>
<td style="font-weight: bold;">6mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">12mo</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>5.2%</td>
<td>1.9%</td>
<td>-1.5%</td>
<td>24.5%</td>
<td>7.0%</td>
<td>17.3%</td>
<td>10.2%</td>
<td>19.2%</td>
<td>12.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;E-16
Domestic MFG orders</td>
<td>9.4%</td>
<td>1.7%</td>
<td>-8.1%</td>
<td>9.5%</td>
<td>-5.2%</td>
<td>5.4%</td>
<td>2.2%</td>
<td>11.7%</td>
<td>1.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;E-16
Foreign MFG orders</td>
<td>6.2%</td>
<td>6.8%</td>
<td>-5.1%</td>
<td>33.9%</td>
<td>20.3%</td>
<td>25.7%</td>
<td>29.1%</td>
<td>26.5%</td>
<td>20.9%</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Countries:</td>
<td style="font-weight: bold;">Mar<br>10</td>
<td style="font-weight: bold;">Feb<br>10</td>
<td style="font-weight: bold;">Jan<br>10</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">6mo</td>
<td style="font-weight: bold;">6mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">12mo</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Germany
(MFG):</td>
<td>5.7%</td>
<td>0.5%</td>
<td>5.5%</td>
<td>57.7%</td>
<td>17.5%</td>
<td>23.4%</td>
<td>16.1%</td>
<td>27.0%</td>
<td>24.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;France(Ind):</td>
<td>6.5%</td>
<td>-1.0%</td>
<td>-10.9%</td>
<td>-22.4%</td>
<td>12.5%</td>
<td>2.2%</td>
<td>3.1%</td>
<td>10.6%</td>
<td>-5.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Italy
(Ind):</td>
<td>1.0%</td>
<td>-0.4%</td>
<td>-2.8%</td>
<td>-8.7%</td>
<td>6.2%</td>
<td>12.7%</td>
<td>25.2%</td>
<td>9.1%</td>
<td>5.5%</td>
</tr>
</tbody>
</table>
</body></html>

EMU order surged in March climbing at a 5.2% month to month after rising by 1.9% M-o-M in February. The three months growth rate is at 24.5% up from 17.3% over six months and 19.2% over 12-months. Orders strength is being lead by [...]

EMU Order Growth Rates Stay Strong In Manufacturing

Tom Moeller

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525h.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Conference Board indicated that consumer confidence was
unshaken in early May by U.S. stock market declines nor by European
market turmoil. Their consumer confidence index rose 9.7% m/m to 63.3,
its highest level since March 2008. The gain outpaced the Consensus
expectation for a rise to 59.0. During the last ten years there has
been an 82% correlation between the level of consumer confidence and
the y/y change in real consumer spending. The Conference Board data can
be found in Haver's <b>CBDB</b> database.</p>
<p>The expectations component of confidence improved the most m/m
to its highest level since August 2007. Improved expectations for
business conditions led the gain while expectations for employment and
income rose to lesser extents. Consumers expect the inflation rate in
twelve months to be 5.3% as they did last month and that remained down
from last year's high of 7.7%. Interest rates in twelve months were
expected to be higher by a lesser 54.1% of respondents but a slightly
increased 12.5% expected rates to fall. A lessened 31.7% of respondents
expected stock prices to rise.</p>
<p>Consumers' assessment of the present situation increased 7.1%
m/m and May was improved by one-half from December's low. Jobs were
seen as hard to get by a reduced 43.6% of respondents but jobs were
seen as plentiful by only 4.6%. That was up just slightly from the
series' historic low reached in November. Also improved was the
percentage of respondents who saw business conditions as good. The
percentage of consumers who thought business conditions were bad fell
to 39.3%, off more-than ten points from its peak during the recession.</p>
<p>A reduced 1.9% of those surveyed plan to buy a home during the
next six months. Also down slightly m/m to 26.2% were those who plan to
buy a major appliance, versus 30.9% who planned to buy one back in
2007. An improved 6.0% plan to buy an automobile versus 6.0% in 2007
and a greater 2.8% plan to buy a new one, just off the series' historic
low.</p>
<p><b>The Shape of Things to Come</b> from the
Federal Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2010/el2010-15.html">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525i.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525j.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><strong>Conference
Board&nbsp;(SA, 1985=100)</strong></th>
<th scope="col"><strong>May</strong></th>
<th scope="col"><strong>April</strong></th>
<th scope="col"><strong>March</strong></th>
<th scope="col"><strong>y/y %</strong></th>
<th scope="col"><strong>2009</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><strong>Consumer
Confidence Index</strong></td>
<td>63.3</td>
<td>57.7</td>
<td>52.3</td>
<td>15.5</td>
<td>45.2</td>
<td>57.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol"><strong>&nbsp;
Present Situation</strong></td>
<td>30.2</td>
<td>28.2</td>
<td>25.2</td>
<td>1.7</td>
<td>24.0</td>
<td>69.9</td>
<td>128.8</td>
</tr>
<tr class="odd">
<td class="firstcol"><strong>&nbsp;
Expectations</strong></td>
<td>85.3</td>
<td>77.4</td>
<td>70.4</td>
<td>19.3</td>
<td>59.3</td>
<td>50.0</td>
<td>86.4</td>
</tr>
</tbody>
</table>
</body></html>

The Conference Board indicated that consumer confidence was unshaken in early May by U.S. stock market declines nor by European market turmoil. Their consumer confidence index rose 9.7% m/m to 63.3, its highest level since March 2008. [...]

U.S. Consumer Confidence Improves To Highest Since 2008

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<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The coming summer driving season hasn't helped U.S. gasoline
prices as they've dipped from recent highs. Petroleum prices generally
weakened with evidence that forward economic momentum, globally, has
lost steam. Those worries lowered the pump price of <b>regular
gasoline </b>to $2.79 last week yet prices remained up more than
three-quarters since the December 2008 low. Yesterday the spot market
price for a gallon of regular gasoline fell further from last week's
average. The figures are reported by the U.S. Department of Energy and
can be found in Haver's <b>WEEKLY &amp; DAILY </b>databases.</p>
<p>Lower crude oil costs have very much reflected these concerns
over the worldwide economic recovery. The average price for a barrel of
light sweet crude (WTI) fell last week to $69.02 versus the recent high
of $84.23 averaged during April. Yesterday, crude prices fell further
to $66.88 per barrel.</p>
<p>Demand for gasoline hasn't yet much reflected the prospects
for economic weakness. It rose 1.6% last week versus one year ago. That
compares to a 3.0% decline in early-February. The demand for residual
fuel oil rose a lesser 7.7% and distillate demand surged 9.3% y/y.
That's improved from a 12.3% decline during February. Inventories of
crude oil and petroleum products improved into May but still were up
just a modest 0.2% from one year ago.</p>
<p>U.S. natural gas prices strengthened last week to an average
$4.25 per mmbtu (2.9% y/y). Prices reached a high of $6.50 early in
January. Nevertheless, prices remained nearly double the September low.</p>
<p>The energy price data can be found in Haver's <b>WEEKLY
</b>database while the daily figures are in <b>DAILY</b>.
The gasoline demand figures are in <b>OILWKLY</b>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W4/@W4.HTM"><b>Weekly Prices</b></a></th>
<th scope="col"><b>05/24/10</b></th>
<th scope="col"><b>05/17/10</b></th>
<th scope="col"><b>05/10/10</b></th>
<th scope="col"><b>y/y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Retail Regular Gasoline ($ per
Gallon, Regular)</td>
<td>2.79</td>
<td>2.86</td>
<td>2.91</td>
<td>14.4%</td>
<td>2.35</td>
<td>3.25</td>
<td>2.80</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil,
WTI&nbsp; ($ per bbl.)</td>
<td>69.02</td>
<td>74.97</td>
<td>80.22</td>
<td>14.1%</td>
<td>61.39</td>
<td>100.16</td>
<td>72.25</td>
</tr>
<tr class="odd">
<td class="firstcol">Natural Gas Price ($/mmbtu)</td>
<td>4.25</td>
<td>4.20</td>
<td>3.96</td>
<td>12.9%</td>
<td>3.95</td>
<td>8.88</td>
<td>6.97</td>
</tr>
</tbody>
</table>
</body></html>

The coming summer driving season hasn't helped U.S. gasoline prices as they've dipped from recent highs. Petroleum prices generally weakened with evidence that forward economic momentum, globally, has lost steam. Those worries lowered [...]

U.S. Gasoline Prices Fall To Lowest Since March

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525b.jpg" style="width: 312px; height: 265px;">
<p></p>
<p>The recent improvement in home sales has not enhanced pricing
power by much, but at least it's ended earlier declines. Seasonally
adjusted, the Case-Shiller Home Price Index slipped just marginally
from February. That capped a 3.7% rise in prices since last May's low
following double-digit, y/y price declines dating back to early-2008.
Overall, home prices have fallen 29.8% since the April 2006 peak.</p>
<p>The narrower 10 City Composite Index rose a seasonally
adjusted 0.2%. Over the last year prices rose 1.5% and they're up 4.6%
since the low during May of last year.</p>
<p>The performance of home prices continued to vary around the
country. During March the 12-month gain in prices was strongest in the
West where in San Francisco they rose 16.3% and in San Diego by 10.8%.
Lesser price gains were logged in Los Angeles (6.1%) and Denver (4.1%).
Prices also rose in Cleveland (6.7%) Minneapolis (6.6%), Washington
D.C. (5.7%), Boston (3.9%), Dallas (3.1%) and Phoenix (2.5%).
Widespread, though lessened, price declines continued in Detroit
(-4.5%), Charlotte (-3.9%), Seattle (-3.5%), Portland (-2.7%), New York
(-2.4%) and Atlanta (-1.2%).</p>
<p>The Case-Shiller home price series are value-weighted, i.e., a
greater index weight is assigned to more expensive homes. The
S&amp;P/Case-Shiller home price series can be found in Haver's <b>USECON</b>
database and the city data highlighted below is in the <b>REGIONAL</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100525d.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>S&amp;P/Case-Shiller
Home Price Index (SA)</b></th>
<th scope="col"><b>March m/m</b></th>
<th scope="col"><b>February m/m</b></th>
<th scope="col"><b>January m/m</b></th>
<th scope="col"><b>March y/y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><b>20 City Composite Index</b></td>
<td>-0.0</td>
<td>-0.1</td>
<td>0.3</td>
<td>2.4</td>
<td>-13.3</td>
<td>-15.7</td>
<td>-3.8</td>
</tr>
<tr>
<td colspan="8" class="firstcol">&nbsp; <b>Regional
Indicators</b></td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
Atlanta</b></td>
<td>-1.3</td>
<td>-0.7</td>
<td>-0.6</td>
<td>-1.2</td>
<td>-11.6</td>
<td>-8.5</td>
<td>0.7</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
Boston</b></td>
<td>0.3</td>
<td>-0.4</td>
<td>0.3</td>
<td>3.9</td>
<td>-4.9</td>
<td>-5.7</td>
<td>-4.0</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
Chicago</b></td>
<td>-2.0</td>
<td>-1.1</td>
<td>-0.5</td>
<td>-2.2</td>
<td>-14.2</td>
<td>-10.0</td>
<td>-1.0</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
Dallas</b></td>
<td>0.3</td>
<td>-1.3</td>
<td>-0.3</td>
<td>3.1</td>
<td>-2.3</td>
<td>-3.3</td>
<td>0.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;<b>&nbsp;&nbsp;&nbsp;
Denver</b></td>
<td>0.5</td>
<td>-0.0</td>
<td>-0.1</td>
<td>4.1</td>
<td>-2.8</td>
<td>-4.9</td>
<td>-1.7</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
Los Angeles</b></td>
<td>-0.3</td>
<td>0.1</td>
<td>1.9</td>
<td>6.1</td>
<td>-15.4</td>
<td>-24.2</td>
<td>-5.2</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
New York</b></td>
<td>-0.1</td>
<td>-0.1</td>
<td>-0.2</td>
<td>-2.4</td>
<td>-9.8</td>
<td>-7.4</td>
<td>-2.8</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
San Francisco</b></td>
<td>0.9</td>
<td>0.4</td>
<td>0.6</td>
<td>16.3</td>
<td>-18.4</td>
<td>-24.3</td>
<td>-4.5</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>&nbsp;&nbsp;&nbsp;&nbsp;
Tampa&nbsp;&nbsp;&nbsp; </b></td>
<td>-0.0</td>
<td>-0.3</td>
<td>0.3</td>
<td>-3.5</td>
<td>-18.8</td>
<td>-19.2</td>
<td>-7.6</td>
</tr>
</tbody>
</table>
</body></html>

The recent improvement in home sales has not enhanced pricing power by much, but at least it's ended earlier declines. Seasonally adjusted, the Case-Shiller Home Price Index slipped just marginally from February. That capped a 3.7% [...]

Case-Shiller Home Price Index Improves Y/Y But Momentum Eases

Case-Shiller Home Price IndexImproves Y/Y But Momentum Eases

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<p></p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100524l.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100524m.jpg" style="width: 312px; height: 265px;">
<p></p>
<p>The
financial turmoil in the Euro Area has resulted in a sharp drop in
confidence in the Euro Area, as a whole.&nbsp; The ZEW Indicator of
Expectations for the entire Euro Area, released last week, fell from a
balance of optimists of 46.0% in April to 37.6% in May. Today, however,
Slovenia, one of the smaller nations and one of the more recent members
of the euro area.&nbsp; reported today an increase in
confidence.&nbsp; (Slovenia has a population of about 2 million and
entered the Euro Area on January 1, 2007) The Statistical Office of
Slovenia publishes an overall sentiment indicator, which is based on
three separate indicators: consumer confidence, confidence in retail
trade and in manufacturing.&nbsp; The indicators are in the form of
percent balances.&nbsp;</p>
<p>Although the overall indicator still shows
an excess of pessimists, the excess of pessimists declined in May to 9
from 12.&nbsp; This is the best balance since October of
2008.&nbsp; Business personnel in Slovenia appear to be more
positive than the consumer.&nbsp; In Retail trade, there is
actually a small excess-2%-of optimists over pessimists and in
Manufacturing, the pessimists outweigh the optimists by only
1%.&nbsp; There are, however, many more pessimists among the
consumers.&nbsp; They exceeded the optimists by 22% in May, but
this was an improvement over April's excess of pessimist of
24%.&nbsp; The percent balance of the four indicators are shown in
the first chart.&nbsp;&nbsp;</p>
<p>The improvement in confidence in
May in Slovenia, in contrast to a decline for the Euro Area as a whole,
may be due in part to Slovenia's relatively favorable financial
situation.&nbsp; Although its government deficit as a percentage of
GDP increased in 2009, part of the increase reflects the decline in GDP
and may improve as the economy recovers.&nbsp; The level of debt to
GDP is well below any danger point&nbsp; These ratios are shown in
the second chart.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">SLOVENIA</th>
<th scope="col"><b>May 10&nbsp;</b></th>
<th scope="col"><b>Apr 10&nbsp;</b></th>
<th scope="col"><b>Mar 10</b></th>
<th scope="col"><b>Feb 10</b></th>
<th scope="col"><b>Jan 10</b></th>
<th scope="col"><b>Dec 09</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Combined Sentiment
Indicator (% Bal)</td>
<td>-9</td>
<td>-12</td>
<td>-15</td>
<td>-11</td>
<td>-10</td>
<td>-13</td>
<td>-15</td>
<td>-13</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Consumer Confidence Indicator (% Bal)</td>
<td>-22</td>
<td>-24</td>
<td>-26</td>
<td>-24</td>
<td>-26</td>
<td>-26</td>
<td>-24</td>
<td>-21</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Retail
Confidence Indicator (%
Bal)</td>
<td>2</td>
<td>2</td>
<td>-3</td>
<td>-4</td>
<td>-6</td>
<td>-4</td>
<td>-7</td>
<td>-6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Manufacturing Confidence Indicator
(%Bal)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>-1</td>
<td>-2</td>
<td>-6</td>
<td>-8</td>
<td>-7</td>
<td>-12</td>
<td>-13</td>
<td>-16</td>
</tr>
</tbody>
</table>
</span>
</body></html>

The financial turmoil in the Euro Area has resulted in a sharp drop in confidence in the Euro Area, as a whole. The ZEW Indicator of Expectations for the entire Euro Area, released last week, fell from a balance of optimists of 46.0% [...]

Confidence Improves In Slovenia, One Of The Smaller Euro Area Countries

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100524k.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>After an encouraging spurt in January Japan&#8217;s overall sector
index has fallen back for two straight months and is back barely above
its level of December 2009. Only the industry index is up this month.
The industrial index is up in 12 of the last 13-months but the even the
pace of its increase is tailing off. The construction index is still
eroding. The tertiary index which is a measure of the performance of
the services sector is on a steady slow path of recovery but it fell
sharply in March and in February. The tertiary index is below its
December 2009 level.</p>
<p>The construction index is near the bottom of its five year
range of values. The services sector is in the bottom 12% of its five
year range. The industrial sector is the best performing sector but
stands only in the 60th percentile of its range. As a result of these
standings the overall business index resides in the 28th percentile of
its range.</p>
<p>The sector indices paint an unclear picture of the Japanese
economy. While the trends for the indices are still rising, except for
construction, the recent weakness for industry and services is
disturbing.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"><b>Key Japanese Sector Surveys</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="4">Raw readings of each
survey</td>
<td style="font-weight: bold;" colspan="3">Percent of 5Yr range*</td>
</tr>
<tr>
<td class="firstcol">Indices</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
</tr>
<tr class="odd">
<td class="firstcol">Biz
Activity(METI:Indices)</td>
<td>93.8</td>
<td>94.6</td>
<td>96.8</td>
<td>93.6</td>
<td>28.4%</td>
<td>34.3%</td>
<td>50.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Construction</td>
<td>75.2</td>
<td>78.2</td>
<td>75.0</td>
<td>74.5</td>
<td>2.6%</td>
<td>13.9%</td>
<td>1.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Industry</td>
<td>94.8</td>
<td>93.7</td>
<td>94.3</td>
<td>90.4</td>
<td>60.5%</td>
<td>57.6%</td>
<td>59.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Tertiary(serv)</td>
<td>95.5</td>
<td>98.5</td>
<td>98.8</td>
<td>96.0</td>
<td>12.1%</td>
<td>45.1%</td>
<td>48.4%</td>
</tr>
</tbody>
</table>
</body></html>

After an encouraging spurt in January Japan’s overall sector index has fallen back for two straight months and is back barely above its level of December 2009. Only the industry index is up this month. The industrial index is up in 12 [...]

Japan Sector Index Drops In March

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.