Tom Moeller

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
For last week, the Bureau of Labor Statistics reported that
initial claims for jobless insurance rose 25,000 to 471,000 following
declines during the prior five weeks. The latest disappointed Consensus
expectations for 440,000 claims. Even the earlier week's level was
revised up modestly. Still, claims remained near this cycle's lowest.
Last week's figure was down from the recession peak of 651,000 reached
in March of 2009. The four-week moving average of initial claims
increased slightly to 453,500.
The latest claims figure covers the survey week for May
nonfarm payrolls. Claims fell 7,500 (-1.6%) from the April survey
period. During the last ten years there has been an 80% correlation
(inverse) between the level of initial claims and the m/m change in
nonfarm payrolls.
A 40,000 decline in continuing claims for unemployment
insurance during the latest week reversed the prior week's increase.
Claims were down by one-third from the June '09 peak. The overall
decline is a function of the improved job market but also reflects the
exhaustion of 26 weeks of unemployment benefits. Continuing claims
provide an indication of workers' ability to find employment. The
four-week average of continuing claims at 4.643M remained near the
cycle low. This series dates back to 1966.
Extended benefits for unemployment insurance rose w/w to
240,260. However, they were down by three-quarters from a peak of
597,688 reached in November.
The insured unemployment rate remained at 3.6% where it has
been since mid-February. The rate reached a high of 4.9% during May of
2009. During the last ten years, there has been a 96% correlation
between the level of the insured unemployment rate and the overall rate
of unemployment published by the Bureau of Labor Statistics.
The highest insured unemployment rates in the week ending May
1 were in Alaska (6.4%), Puerto Rico (6.0), Oregon (5.6), Nevada (5.0),
California (4.9), Pennsylvania (4.6), Wisconsin (4.6), Montana (4.5),
Idaho (4.4), North Carolina (4.4), and Washington (4.4). The lowest
insured unemployment rates were in Virginia (1.7), Texas (2.2), Georgia
(2.8), Maryland (2.9), Wyoming (3.0), Florida (3.1), Ohio (3.1), New
York (3.3) and Maine (3.4). These data are not seasonally adjusted but
the overall insured unemployment rate is.
The unemployment insurance claims data is available in Haver's
WEEKLY database and the state data is in the REGIONW
database.
The impact of low-skilled immigration on the youth
labor market from the Board of Governors can be found here <a href="http://www.federalreserve.gov/pubs/feds/2010/201003/201003abs.html">here.</a>

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520c.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/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">05/15/10</th>
<th scope="col">05/08/10</th>
<th scope="col">05/01/10</th>
<th scope="col">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">Initial Claims</td>
<td>471</td>
<td>446</td>
<td>446</td>
<td>-24.6%</td>
<td>572</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,625</td>
<td>4,665</td>
<td>-28.3</td>
<td>5,809</td>
<td>3,340</td>
<td>2,549</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.6</td>
<td>3.6</td>
<td>4.9 (5/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

For last week, the Bureau of Labor Statistics reported that initial claims for jobless insurance rose 25,000 to 471,000 following declines during the prior five weeks. The latest disappointed Consensus expectations for 440,000 claims. [...]

U.S. Initial Jobless Insurance Claims Rise Unexpectedly

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
For last week, the Bureau of Labor Statistics reported that
initial claims for jobless insurance rose 25,000 to 471,000 following
declines during the prior five weeks. The latest disappointed Consensus
expectations for 440,000 claims. Even the earlier week's level was
revised up modestly. Still, claims remained near this cycle's lowest.
Last week's figure was down from the recession peak of 651,000 reached
in March of 2009. The four-week moving average of initial claims
increased slightly to 453,500.
The latest claims figure covers the survey week for May
nonfarm payrolls. Claims fell 7,500 (-1.6%) from the April survey
period. During the last ten years there has been an 80% correlation
(inverse) between the level of initial claims and the m/m change in
nonfarm payrolls.
A 40,000 decline in continuing claims for unemployment
insurance during the latest week reversed the prior week's increase.
Claims were down by one-third from the June '09 peak. The overall
decline is a function of the improved job market but also reflects the
exhaustion of 26 weeks of unemployment benefits. Continuing claims
provide an indication of workers' ability to find employment. The
four-week average of continuing claims at 4.643M remained near the
cycle low. This series dates back to 1966.
Extended benefits for unemployment insurance rose w/w to
240,260. However, they were down by three-quarters from a peak of
597,688 reached in November.
The insured unemployment rate remained at 3.6% where it has
been since mid-February. The rate reached a high of 4.9% during May of
2009. During the last ten years, there has been a 96% correlation
between the level of the insured unemployment rate and the overall rate
of unemployment published by the Bureau of Labor Statistics.
The highest insured unemployment rates in the week ending May
1 were in Alaska (6.4%), Puerto Rico (6.0), Oregon (5.6), Nevada (5.0),
California (4.9), Pennsylvania (4.6), Wisconsin (4.6), Montana (4.5),
Idaho (4.4), North Carolina (4.4), and Washington (4.4). The lowest
insured unemployment rates were in Virginia (1.7), Texas (2.2), Georgia
(2.8), Maryland (2.9), Wyoming (3.0), Florida (3.1), Ohio (3.1), New
York (3.3) and Maine (3.4). These data are not seasonally adjusted but
the overall insured unemployment rate is.
The unemployment insurance claims data is available in Haver's
WEEKLY database and the state data is in the REGIONW
database.
The impact of low-skilled immigration on the youth
labor market from the Board of Governors can be found here <a href="http://www.federalreserve.gov/pubs/feds/2010/201003/201003abs.html">here.</a>

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520c.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/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a></th>
<th scope="col">05/15/10</th>
<th scope="col">05/08/10</th>
<th scope="col">05/01/10</th>
<th scope="col">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">Initial Claims</td>
<td>471</td>
<td>446</td>
<td>446</td>
<td>-24.6%</td>
<td>572</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,625</td>
<td>4,665</td>
<td>-28.3</td>
<td>5,809</td>
<td>3,340</td>
<td>2,549</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.6</td>
<td>3.6</td>
<td>4.9 (5/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
UK Trade Deficit Worsens As
Exports Lag Imports 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 20, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Orders growth has recovered substantially in Germany and in
France. Despite the recovery in orders, with the rebounding rates of
orders growth, the level of orders is still some 20% to 30% below their
respective cycle highs for France and Italy.
Germany posted some very strong orders. France and Italy, too,
have posted some degree of orders strength in March. While France&#8217;s
jump of 6.5% in one month seems very impressive (better than a 100%
annual rate) orders in France still are rebounding from a 10.9% drop in
January. As a result French orders are still falling on balance over
three-months even with this strong monthly rebound. So are orders in
Italy.
Europe is certainly due for some kick to growth as the euro
has fallen over the past year and plunged sharply over the past few
months. But the persisting weakness in European stocks speaks to a loss
of confidence. In part the Greek stimulus plan is not fully funded and
is awaiting some final votes from Germany to disburse funds. In part it
is the still uncooperative tone in Greece where further strikes are
planned to protest austerity. In part it is due to concern that,
despite all the reluctance to obey the rule of austerity, the fiscal
consolidation will prove to be too great to allow European growth to
press ahead.
It is these two conflicting ideas that are driving markets
into a frenzy, even though they are at odds with each other. Which is
it? Are countries going to avoid austerity and not do the right thing?
Or, are countries going to be so virtuous with fiscal controls that
consolidation will prove to be a load too-heavy and cause growth to be
set back? Or is there a middle ground with a more positive result? We
have seen recent improvements in the US and European economic reports.
Reports with expectations components have shown some of the weakest
recent readings. Barometers of current activity have been strong,
especially in the UK just outside the Euro-Area
I think we are in a region of political economic uncertainty.
Markets are not happy with the stewardship of our political or economic
direction in recent years. The private sector has failed us too. It is
no wonder that markets feel like taking no prisoners. But it&#8217;s also
true that at the end of the day the markets know that stock indices
have come a long way from their recession bottoms, that interest rates
had crept up and are now lower as a result of this sell-off, that
central banks are not eager to tighten but are planning to discharge
their responsibilities, that &#8211; at the end of the day- inflation has
remained under wraps. The blow-off in commodity prices that had run
well ahead of reality is a welcome event (unless you were long, of
course). As we go over the final technical hurdles to get money to
Greece (and to thereby protect exposed German and French banks with
Greek paper on their balance sheets) we can expect things to settle
down and for markets to pay attention of fundamentals again. It&#8217;s not
just pabulum from a policymaker looking to calm markets. It&#8217;s true. The
fundamentals are good. Even with the high debt-to-GDP levels the
problems are tractable.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Italy
Orders </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td style="font-weight: bold;" class="firstcol">Saar
exept m/m</td>
<td style="font-weight: bold;">Mar-10</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">Jan-10</td>
<td style="font-weight: bold;">3-mo</td>
<td style="font-weight: bold;">6-mo</td>
<td style="font-weight: bold;">12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>1.0%</td>
<td>-0.4%</td>
<td>-2.8%</td>
<td>-8.7%</td>
<td>12.7%</td>
<td>9.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Foreign</td>
<td>1.8%</td>
<td>-0.5%</td>
<td>-2.3%</td>
<td>-4.1%</td>
<td>22.0%</td>
<td>21.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Domestic</td>
<td>0.4%</td>
<td>-0.2%</td>
<td>-3.1%</td>
<td>-11.1%</td>
<td>7.7%</td>
<td>3.0%</td>
</tr>
<tr style="font-weight: bold;">
<td colspan="7" class="firstcol">Memo</td>
</tr>
<tr class="odd">
<td class="firstcol">Sales</td>
<td>1.5%</td>
<td>-2.6%</td>
<td>2.6%</td>
<td>6.2%</td>
<td>8.3%</td>
<td>6.3%</td>
</tr>
<tr style="font-weight: bold;">
<td colspan="7" class="firstcol">French Orders</td>
</tr>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
</tr>
<tr class="odd">
<td class="firstcol">Total</td>
<td>6.5%</td>
<td>-1.0%</td>
<td>-10.9%</td>
<td>-22.4%</td>
<td>2.2%</td>
<td>10.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Foreign</td>
<td>2.9%</td>
<td>1.0%</td>
<td>-8.7%</td>
<td>-19.1%</td>
<td>26.7%</td>
<td>28.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">IP xConstruct</td>
<td>0.8%</td>
<td>0.3%</td>
<td>0.6%</td>
<td>7.0%</td>
<td>3.7%</td>
<td>6.7%</td>
</tr>
</tbody>
</table>
U.S. Leading Economic Indicators
Slip 
by <a href="/comment/Moeller.html">Tom
Moeller</a> May 20,2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Following twelve consecutive monthly increases, the Conference
Board's Index of Leading Economic Indicators declined during April. The
index slipped 0.1% after a downwardly revised 1.3% March gain. The
three-month rate of increase also slipped to 6.5% (AR), its weakest in
roughly one year. The leading index is based on actual reports for
eight economic data series. The Conference Board initially estimates
two series, consumer and capital goods orders.
The breadth of increase amongst the component leading series
fell to its lowest since March of last year. Prominent in last month's
index decline were lower building permits, quicker vendor performance,
lower money supply growth and higher initial claims for unemployment
insurance. Just four of the ten components rose. These included higher
capital goods orders, a steeper interest rate yield curve, higher stock
prices and a longer workweek.
The index of coincident indicators rose 0.3%, the strongest
monthly gain since November. The three-month change of 2.0% was near
its high of late last year. Increases in all four of the component
series including industrial production, real personal income, business
sales and payroll employment contributed to last month's increase.
The lagging index rose slightly for the third month since
January 2009. Higher C&amp;I loans accounted for most of the
increase. The ratio of coincident-to-lagging indicators (another
leading indicator) rose slightly to the highest level since July, 2008.
The Conference Board figures are available in Haver's BCI
database. Visit the Conference Board's <a href="http://www.conference-board.org">site</a> for
coverage of leading indicator series from around the world. The latest
U.S. Leading Indicators release can be found <a href="http://www.conference-board.org/pdf_free/economics/bci/acrawl.pdf">here</a>.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520g.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/BCI/BCI.HTM" style="color: black;">Business Cycle Indicators</a>
(%)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">February</th>
<th scope="col">Dec. 6-Month % (AR)</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">Leading</td>
<td>-0.1</td>
<td>1.3</td>
<td>0.4</td>
<td>10.6</td>
<td>0.5</td>
<td>-2.7</td>
<td>-0.2</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.3</td>
<td>0.1</td>
<td>0.1</td>
<td>1.4</td>
<td>-5.1</td>
<td>-1.2</td>
<td>1.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>0.1</td>
<td>0.1</td>
<td>0.2</td>
<td>-2.9</td>
<td>-1.6</td>
<td>3.2</td>
<td>3.0</td>
</tr>
</tbody>
</table>
Philadelphia Fed Index Increases
As Shipments Rise 
by <a href="/comment/Moeller.html">Tom
Moeller</a>May 20, 2010 


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520h.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
The economic recovery continued this month according to the
Philadelphia Federal Reserve Bank. It indicated that its May index of
regional factory sector activity rose for the fourth consecutive month
to the second highest level since early-2005. At 21.4 the index roughly
matched Consensus expectations and has been positive since the summer.
The latest figure compared to those near -40.0 at the recent
recession's weakest.
During the last ten years there has been a 75% correlation
between the level of the Philadelphia Fed Business Conditions Index and
the three-month growth in factory sector industrial production. There
has been a 73% correlation with q/q growth in real GDP. The latest
survey from the Philadelphia Federal Reserve Bank can be found <a href="http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2010/bos0510.pdf">here.</a>
Improved shipments powered the June index gain. It was
accompanied by higher new orders. Factory payrolls, however, eased but
still showed net-hiring for the sixth straight month. During the last
ten years, there has been a 90% correlation between the index level and
the three-month change in manufacturing sector payrolls.
The prices paid index slipped from the recent high. During the
last ten years there has been a 66% correlation between the prices paid
index and the three-month growth in the intermediate goods PPI. There
has been an 77% correlation with the change in core intermediate goods
prices.
The separate index of expected business conditions in six
months also fell, to the lowest level since April of last year.
Expected prices paid also fell to the lowest level since last August.
Expected capital expenditures also fell m/m and were well below the
February high.
The figures from the Philadelphia Federal Reserve can be found
in Haver's SURVEYS database.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520i.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100520j.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">Philadelphia
Fed (%)</th>
<th scope="col">May</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">May '09</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">General Activity Index</td>
<td>21.4</td>
<td>20.2</td>
<td>18.9</td>
<td>-21.7</td>
<td>-7.6</td>
<td>-21.4</td>
<td>5.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders</td>
<td>6.1</td>
<td>13.9</td>
<td>9.3</td>
<td>-23.2</td>
<td>-9.7</td>
<td>-14.7</td>
<td>6.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Shipments</td>
<td>15.8</td>
<td>5.6</td>
<td>13.6</td>
<td>-18.7</td>
<td>-8.0</td>
<td>-9.2</td>
<td>9.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Delivery Times</td>
<td>-1.2</td>
<td>5.4</td>
<td>7.9</td>
<td>-19.1</td>
<td>-15.3</td>
<td>-10.6</td>
<td>-6.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Number of Employees</td>
<td>3.2</td>
<td>7.3</td>
<td>8.4</td>
<td>-29.8</td>
<td>-23.8</td>
<td>-8.8</td>
<td>6.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventories</td>
<td>-7.9</td>
<td>2.0</td>
<td>-11.0</td>
<td>-27.8</td>
<td>-24.0</td>
<td>-16.7</td>
<td>-3.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index</td>
<td>35.5</td>
<td>42.7</td>
<td>38.6</td>
<td>-23.8</td>
<td>-3.9</td>
<td>36.3</td>
<td>26.3</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Initial Jobless InsuranceClaims Rise Unexpectedly

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<img align="left" alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;">
Moderate economic improvement since the middle of last year has done nothing to improve retail pricing power. The Consumer Price Index for April fell 0.1% (+2.2% y/y) and reversed a modest 0.1% uptick in March. The latest figure fell short of Consensus expectations for a 0.1% gain. Moreover, continuing weak was the 0.5% (AR) CPI increase so far this year.
A 1.4% drop in energy prices was behind much of last month&#39;s total decline, the third consecutive monthly slip. A 4.4% drop (-2.9% y/y) in natural gas prices led the decline followed by a 2.4% drop in gasoline prices (+38.3% y/y). Higher fuel oil prices (28.0% y/y) offset much of these declines along with an uptick in electricity costs (0.6% y/y).
Core consumer prices also were weak. They were unchanged for the second consecutive month. A 0.1% increase had been expected and prices have gained just 0.1% since October. Core goods prices led the weakness with a 0.3% decline, the third consecutive monthly shortfall. Lower apparel prices fell by a sharp 0.7% (-0.9% y/y) while prices of home furnishings &amp; operation declined by 0.5% (-2.8% y/y). New &amp; used motor vehicles prices rounded off the weakness and slipped 0.2% (+4.9% y/y). Tobacco prices nudged up 0.1% (6.1% y/y).
Core services prices strengthened marginally and rose 0.2% (0.9% y/y). That improvement was led by a quickened 1.7% increase (8.4% y/y) in the cost of public transportation. The 0.3% increase in recreation prices also was a bit improved (-0.4% y/y). Elsewhere, weakness in the housing market left shelter prices unchanged and down 0.6% y/y. Owners equivalent rent of primary residences, a measure not equivalent to other house price measures, slipped again m/m (-0.2% y/y). The slight y/y decline in this measure was the weakest reading since the series&#39; start in 1983. Elsewhere in services, education costs rose 0.5% (5.0% y/y) and medical care services prices again rose 0.3% (3.7% y/y).
Food &amp; beverage prices again firmed a bit by 0.2% and the y/y gain of 0.5% was improved from late-last year&#39;s low of -0.5%. Dairy prices firmed by 0.1% y/y versus the 10.4% decline last summer. Also showing less deflation were prices for meats, poultry, fish &amp; eggs (-0.2% y/y) but cereal &amp; bakery product prices continued weak (-0.9% y/y). Fruit &amp; vegetable prices slipped m/m but the 1.8% y/y increase is improved from a 6.5% decline as of last summer. Finally, the cost of eating out rose just 1.1% y/y, a record low increase, while alcoholic beverage prices also rose just 1.2% y/y, the least since 1995.
The chained CPI, which adjusts for shifts in consumption patterns, eased last month and rose 2.3% year-to-year. Chained prices less food &amp; energy gained just 0.6% y/y.
The consumer price data is available in Haver&#39;s USECON database while detailed figures can be found in the CPIDATA database.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519c.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/USECON/@E8/@E801/@E80101/@E80101.HTM" style="color: white;">Consumer Price Index</a> (%)</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&nbsp;</td>
<td>-0.1</td>
<td>0.1</td>
<td>0.0</td>
<td>2.2</td>
<td>-0.3</td>
<td>3.8</td>
<td>2.9</td>
</tr>
<tr>
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.0</td>
<td>0.0</td>
<td>0.1</td>
<td>1.0</td>
<td>1.7</td>
<td>2.3</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food &amp; Energy</td>
<td>-0.3</td>
<td>-0.1</td>
<td>-0.1</td>
<td>1.2</td>
<td>1.3</td>
<td>0.1</td>
<td>-0.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Services less Energy</td>
<td>0.2</td>
<td>0.1</td>
<td>0.1</td>
<td>0.9</td>
<td>1.9</td>
<td>3.1</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>-1.4</td>
<td>-0.0</td>
<td>-0.5</td>
<td>18.0</td>
<td>-18.1</td>
<td>13.7</td>
<td>5.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Food &amp; Beverages</td>
<td>0.2</td>
<td>0.2</td>
<td>0.0</td>
<td>0.5</td>
<td>1.9</td>
<td>5.4</td>
<td>3.9</td>
</tr>
<tr class="grey1">
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM" style="color: black;">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.2</td>
<td>0.4</td>
<td>-0.0</td>
<td>2.3</td>
<td>-0.1</td>
<td>3.7</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food &amp; Energy&nbsp;</td>
<td>0.0</td>
<td>0.2</td>
<td>0.2</td>
<td>0.6</td>
<td>1.5</td>
<td>2.0</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body>
</html>

Moderate economic improvement since the middle of last year has done nothing to improve retail pricing power. The Consumer Price Index for April fell 0.1% (+2.2% y/y) and reversed a modest 0.1% uptick in March. The latest figure fell [...]

U.S. CPI: Broad-Based Weakness Is Behind Slight M/M Decline

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Industrial output in Japan soared in March but could not stave
off an erosion in the Yr/Yr rate of growth. Output was up by 1.2% m/m
across the major sectors. But that followed a result in February that
was less than stellar, headlined by a 0.6% drop in IP.
The sequential growth rates in the table show growth at a
Yr/Yr pace of 29.9%, a six month annualized pace of 25.6% and a
three-month annualized pace of 20.9%. While the growth rates
progressively step lower they are still way too elevated to be
sustainable. While there is still a lot of slack in Japan&#8217;s economy
some deceleration in the growth rates is just what the economy needs to
keep its expansion on the &#8216;long track&#8217; which is better than the &#8216;fast
track.&#8217;
Yesterday Japan reported its service sector index took a large
step back from the previous month&#8217;s value. That sort of step back is
more worrisome. Japan, the US, and Europe need to drive their
respective service sectors to better results. That sector is where the
jobs are and that sector has been growing painfully slowly across
countries.
Manufacturing continues to do well in the global economy.
Japan is farther from making a full recovery that Europe or the US but
it is pushing hard on the recovery path. This month&#8217;s IP report is a
good one.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">Japan
Industrial Production Trends </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="3">m/m %</td>
<td style="font-weight: bold;" colspan="3">Saar %</td>
<td style="font-weight: bold;">Yr/Yr</td>
<td style="font-weight: bold;" colspan="1" rowspan="2">Qtr-2 Date %AR&nbsp;</td>
<td style="font-weight: bold;" colspan="1" rowspan="2"> % 0f 
Cycle &nbsp;Peak&nbsp;</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">seas adjusted</td>
<td style="font-weight: bold;">Mar 10</td>
<td style="font-weight: bold;">Feb 10</td>
<td style="font-weight: bold;">Jan 10</td>
<td style="font-weight: bold;">3-mo</td>
<td style="font-weight: bold;">6-mo</td>
<td style="font-weight: bold;">12-mo</td>
<td style="font-weight: bold;">Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">Mining &amp;
MFG</td>
<td>1.2%</td>
<td style="color: red;">-0.6%</td>
<td>4.3%</td>
<td>20.9%</td>
<td>25.6%</td>
<td>29.9%</td>
<td style="color: red;">-32.8%</td>
<td>30.9%</td>
<td>86.1%</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>1.2%</td>
<td style="color: red;">-1.1%</td>
<td>4.6%</td>
<td>20.3%</td>
<td>24.9%</td>
<td>28.9%</td>
<td style="color: red;">-32.0%</td>
<td>30.5%</td>
<td>86.5%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>1.2%</td>
<td style="color: red;">-0.6%</td>
<td>4.3%</td>
<td>20.9%</td>
<td>25.6%</td>
<td>30.0%</td>
<td style="color: red;">-33.0%</td>
<td>30.9%</td>
<td>86.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Textiles</td>
<td>1.2%</td>
<td style="color: red;">-2.6%</td>
<td>3.8%</td>
<td>9.4%</td>
<td>4.9%</td>
<td>2.1%</td>
<td style="color: red;">-23.1%</td>
<td>8.1%</td>
<td>72.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; T-port</td>
<td>1.2%</td>
<td>0.8%</td>
<td>12.2%</td>
<td>71.5%</td>
<td>59.5%</td>
<td>87.0%</td>
<td style="color: red;">-53.9%</td>
<td>88.5%</td>
<td>83.1%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="10" class="firstcol">Product Group</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Consumer Gds</td>
<td>3.0%</td>
<td style="color: red;">-3.4%</td>
<td>0.9%</td>
<td>1.6%</td>
<td>8.9%</td>
<td>20.1%</td>
<td style="color: red;">-24.6%</td>
<td>4.9%</td>
<td>87.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Intermediate Gds</td>
<td style="color: red;">-0.6%</td>
<td style="color: red;">-0.2%</td>
<td>6.5%</td>
<td>24.8%</td>
<td>32.0%</td>
<td>43.6%</td>
<td style="color: red;">-37.6%</td>
<td>45.9%</td>
<td>89.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Investment Gds</td>
<td>2.0%</td>
<td>4.1%</td>
<td>4.4%</td>
<td>51.2%</td>
<td>34.6%</td>
<td>15.9%</td>
<td style="color: red;">-31.4%</td>
<td>47.6%</td>
<td>76.3%</td>
</tr>
<tr>
<td class="firstcol">Miining</td>
<td>0.1%</td>
<td>3.3%</td>
<td>1.1%</td>
<td>19.2%</td>
<td style="color: red;">-8.6%</td>
<td>1.4%</td>
<td style="color: red;">-9.1%</td>
<td>14.1%</td>
<td>87.9%</td>
</tr>
<tr>
<td class="firstcol">Electric&amp;Gas</td>
<td>-0.9%</td>
<td>2.0%</td>
<td>2.2%</td>
<td>14.3%</td>
<td>20.2%</td>
<td>7.8%</td>
<td style="color: red;">-7.5%</td>
<td>19.3%</td>
<td>94.5%</td>
</tr>
</tbody>
</table>
</body></html>

Industrial output in Japan soared in March but could not stave off an erosion in the Yr/Yr rate of growth. Output was up by 1.2% m/m across the major sectors. But that followed a result in February that was less than stellar, [...]

Japan’s IP Growth Rates Level Out And Decay

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Moderate economic improvement since the middle of last year
has done nothing to improve retail pricing power. The Consumer Price
Index for April fell 0.1% (+2.2% y/y) and reversed a modest 0.1% uptick
in March. The latest figure fell short of Consensus expectations for a
0.1% gain. Moreover, continuing weak was the 0.5% (AR) CPI increase so
far this year.
A 1.4% drop in energy prices was behind
much of last month's total decline, the third consecutive monthly slip.
A 4.4% drop (-2.9% y/y) in natural gas prices led the decline followed
by a 2.4% drop in gasoline prices (+38.3% y/y). Higher fuel oil prices
(28.0% y/y) offset much of these declines along with an uptick in
electricity costs (0.6% y/y).
Core consumer prices also were weak. They
were unchanged for the second consecutive month. A 0.1% increase had
been expected and prices have gained just 0.1% since October. Core
goods prices led the weakness with a 0.3% decline, the third
consecutive monthly shortfall. Lower apparel prices fell by a sharp
0.7% (-0.9% y/y) while prices of home furnishings &amp; operation
declined by 0.5% (-2.8% y/y). New &amp; used motor vehicles prices
rounded off the weakness and slipped 0.2% (+4.9% y/y). Tobacco prices
nudged up 0.1% (6.1% y/y).
Core services prices strengthened
marginally and rose 0.2% (0.9% y/y). That improvement was led by a
quickened 1.7% increase (8.4% y/y) in the cost of public
transportation. The 0.3% increase in recreation prices also was a bit
improved (-0.4% y/y). Elsewhere, weakness in the housing market left
shelter prices unchanged and down 0.6% y/y. Owners equivalent rent of
primary residences, a measure not equivalent to other house price
measures, slipped again m/m (-0.2% y/y). The slight y/y decline in this
measure was the weakest reading since the series' start in 1983.
Elsewhere in services, education costs rose 0.5% (5.0% y/y) and medical
care services prices again rose 0.3% (3.7% y/y).
Food &amp; beverage prices again firmed
a bit by 0.2% and the y/y gain of 0.5% was improved from late-last
year's low of -0.5%. Dairy prices firmed by 0.1% y/y versus the 10.4%
decline last summer. Also showing less deflation were prices for meats,
poultry, fish &amp; eggs (-0.2% y/y) but cereal &amp; bakery
product prices continued weak (-0.9% y/y). Fruit &amp; vegetable
prices slipped m/m but the 1.8% y/y increase is improved from a 6.5%
decline as of last summer. Finally, the cost of eating out rose just
1.1% y/y, a record low increase, while alcoholic beverage prices also
rose just 1.2% y/y, the least since 1995.
The chained CPI, which adjusts for shifts in consumption
patterns, eased last month and rose 2.3% year-to-year. Chained prices
less food &amp; energy gained just 0.6% y/y.
The consumer price data is available in Haver's USECON
database while detailed figures can be found in the CPIDATA
database.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519c.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/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer Price Index</a> 
(%)</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&nbsp;</td>
<td>-0.1</td>
<td>0.1</td>
<td>0.0</td>
<td>2.2</td>
<td>-0.3</td>
<td>3.8</td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.0</td>
<td>0.0</td>
<td>0.1</td>
<td>1.0</td>
<td>1.7</td>
<td>2.3</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>-0.3</td>
<td>-0.1</td>
<td>-0.1</td>
<td>1.2</td>
<td>1.3</td>
<td>0.1</td>
<td>-0.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>0.2</td>
<td>0.1</td>
<td>0.1</td>
<td>0.9</td>
<td>1.9</td>
<td>3.1</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>-1.4</td>
<td>-0.0</td>
<td>-0.5</td>
<td>18.0</td>
<td>-18.1</td>
<td>13.7</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.2</td>
<td>0.2</td>
<td>0.0</td>
<td>0.5</td>
<td>1.9</td>
<td>5.4</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM" style="color: black;">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.2</td>
<td>0.4</td>
<td>-0.0</td>
<td>2.3</td>
<td>-0.1</td>
<td>3.7</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>0.0</td>
<td>0.2</td>
<td>0.2</td>
<td>0.6</td>
<td>1.5</td>
<td>2.0</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Moderate economic improvement since the middle of last year
has done nothing to improve retail pricing power. The Consumer Price
Index for April fell 0.1% (+2.2% y/y) and reversed a modest 0.1% uptick
in March. The latest figure fell short of Consensus expectations for a
0.1% gain. Moreover, continuing weak was the 0.5% (AR) CPI increase so
far this year.
A 1.4% drop in energy prices was behind
much of last month's total decline, the third consecutive monthly slip.
A 4.4% drop (-2.9% y/y) in natural gas prices led the decline followed
by a 2.4% drop in gasoline prices (+38.3% y/y). Higher fuel oil prices
(28.0% y/y) offset much of these declines along with an uptick in
electricity costs (0.6% y/y).
Core consumer prices also were weak. They
were unchanged for the second consecutive month. A 0.1% increase had
been expected and prices have gained just 0.1% since October. Core
goods prices led the weakness with a 0.3% decline, the third
consecutive monthly shortfall. Lower apparel prices fell by a sharp
0.7% (-0.9% y/y) while prices of home furnishings &amp; operation
declined by 0.5% (-2.8% y/y). New &amp; used motor vehicles prices
rounded off the weakness and slipped 0.2% (+4.9% y/y). Tobacco prices
nudged up 0.1% (6.1% y/y).
Core services prices strengthened
marginally and rose 0.2% (0.9% y/y). That improvement was led by a
quickened 1.7% increase (8.4% y/y) in the cost of public
transportation. The 0.3% increase in recreation prices also was a bit
improved (-0.4% y/y). Elsewhere, weakness in the housing market left
shelter prices unchanged and down 0.6% y/y. Owners equivalent rent of
primary residences, a measure not equivalent to other house price
measures, slipped again m/m (-0.2% y/y). The slight y/y decline in this
measure was the weakest reading since the series' start in 1983.
Elsewhere in services, education costs rose 0.5% (5.0% y/y) and medical
care services prices again rose 0.3% (3.7% y/y).
Food &amp; beverage prices again firmed
a bit by 0.2% and the y/y gain of 0.5% was improved from late-last
year's low of -0.5%. Dairy prices firmed by 0.1% y/y versus the 10.4%
decline last summer. Also showing less deflation were prices for meats,
poultry, fish &amp; eggs (-0.2% y/y) but cereal &amp; bakery
product prices continued weak (-0.9% y/y). Fruit &amp; vegetable
prices slipped m/m but the 1.8% y/y increase is improved from a 6.5%
decline as of last summer. Finally, the cost of eating out rose just
1.1% y/y, a record low increase, while alcoholic beverage prices also
rose just 1.2% y/y, the least since 1995.
The chained CPI, which adjusts for shifts in consumption
patterns, eased last month and rose 2.3% year-to-year. Chained prices
less food &amp; energy gained just 0.6% y/y.
The consumer price data is available in Haver's USECON
database while detailed figures can be found in the CPIDATA
database.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519c.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/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer
Price Index</a> 
(%)</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&nbsp;</td>
<td>-0.1</td>
<td>0.1</td>
<td>0.0</td>
<td>2.2</td>
<td>-0.3</td>
<td>3.8</td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>0.0</td>
<td>0.0</td>
<td>0.1</td>
<td>1.0</td>
<td>1.7</td>
<td>2.3</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>-0.3</td>
<td>-0.1</td>
<td>-0.1</td>
<td>1.2</td>
<td>1.3</td>
<td>0.1</td>
<td>-0.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>0.2</td>
<td>0.1</td>
<td>0.1</td>
<td>0.9</td>
<td>1.9</td>
<td>3.1</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>-1.4</td>
<td>-0.0</td>
<td>-0.5</td>
<td>18.0</td>
<td>-18.1</td>
<td>13.7</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.2</td>
<td>0.2</td>
<td>0.0</td>
<td>0.5</td>
<td>1.9</td>
<td>5.4</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM" style="color: black;">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.2</td>
<td>0.4</td>
<td>-0.0</td>
<td>2.3</td>
<td>-0.1</td>
<td>3.7</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>0.0</td>
<td>0.2</td>
<td>0.2</td>
<td>0.6</td>
<td>1.5</td>
<td>2.0</td>
<td>1.9</td>
</tr>
</tbody>
</table>
Japan&#8217;s IP Growth Rates Level Out
And Decay 
by <a href="/comment/Brusca.html">Robert
Brusca</a> May 19, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Industrial output in Japan soared in March but could not stave
off an erosion in the Yr/Yr rate of growth. Output was up by 1.2% m/m
across the major sectors. But that followed a result in February that
was less than stellar, headlined by a 0.6% drop in IP.
The sequential growth rates in the table show growth at a
Yr/Yr pace of 29.9%, a six month annualized pace of 25.6% and a
three-month annualized pace of 20.9%. While the growth rates
progressively step lower they are still way too elevated to be
sustainable. While there is still a lot of slack in Japan&#8217;s economy
some deceleration in the growth rates is just what the economy needs to
keep its expansion on the &#8216;long track&#8217; which is better than the &#8216;fast
track.&#8217;
Yesterday Japan reported its service sector index took a large
step back from the previous month&#8217;s value. That sort of step back is
more worrisome. Japan, the US, and Europe need to drive their
respective service sectors to better results. That sector is where the
jobs are and that sector has been growing painfully slowly across
countries.
Manufacturing continues to do well in the global economy.
Japan is farther from making a full recovery that Europe or the US but
it is pushing hard on the recovery path. This month&#8217;s IP report is a
good one.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">Japan
Industrial Production Trends </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td style="font-weight: bold;" colspan="3">m/m
%</td>
<td style="font-weight: bold;" colspan="3">Saar
%</td>
<td style="font-weight: bold;">Yr/Yr</td>
<td style="font-weight: bold;" colspan="1" rowspan="2">Qtr-2 
Date %AR&nbsp;</td>
<td style="font-weight: bold;" colspan="1" rowspan="2"> % 0f 
Cycle 
&nbsp;Peak&nbsp;</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">seas
adjusted</td>
<td style="font-weight: bold;">Mar 
10</td>
<td style="font-weight: bold;">Feb 
10</td>
<td style="font-weight: bold;">Jan 
10</td>
<td style="font-weight: bold;">3-mo</td>
<td style="font-weight: bold;">6-mo</td>
<td style="font-weight: bold;">12-mo</td>
<td style="font-weight: bold;">Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">Mining &amp;
MFG</td>
<td>1.2%</td>
<td style="color: red;">-0.6%</td>
<td>4.3%</td>
<td>20.9%</td>
<td>25.6%</td>
<td>29.9%</td>
<td style="color: red;">-32.8%</td>
<td>30.9%</td>
<td>86.1%</td>
</tr>
<tr>
<td class="firstcol">Total Industry</td>
<td>1.2%</td>
<td style="color: red;">-1.1%</td>
<td>4.6%</td>
<td>20.3%</td>
<td>24.9%</td>
<td>28.9%</td>
<td style="color: red;">-32.0%</td>
<td>30.5%</td>
<td>86.5%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>1.2%</td>
<td style="color: red;">-0.6%</td>
<td>4.3%</td>
<td>20.9%</td>
<td>25.6%</td>
<td>30.0%</td>
<td style="color: red;">-33.0%</td>
<td>30.9%</td>
<td>86.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Textiles</td>
<td>1.2%</td>
<td style="color: red;">-2.6%</td>
<td>3.8%</td>
<td>9.4%</td>
<td>4.9%</td>
<td>2.1%</td>
<td style="color: red;">-23.1%</td>
<td>8.1%</td>
<td>72.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; T-port</td>
<td>1.2%</td>
<td>0.8%</td>
<td>12.2%</td>
<td>71.5%</td>
<td>59.5%</td>
<td>87.0%</td>
<td style="color: red;">-53.9%</td>
<td>88.5%</td>
<td>83.1%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="10" class="firstcol">Product
Group</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Consumer Gds</td>
<td>3.0%</td>
<td style="color: red;">-3.4%</td>
<td>0.9%</td>
<td>1.6%</td>
<td>8.9%</td>
<td>20.1%</td>
<td style="color: red;">-24.6%</td>
<td>4.9%</td>
<td>87.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Intermediate Gds</td>
<td style="color: red;">-0.6%</td>
<td style="color: red;">-0.2%</td>
<td>6.5%</td>
<td>24.8%</td>
<td>32.0%</td>
<td>43.6%</td>
<td style="color: red;">-37.6%</td>
<td>45.9%</td>
<td>89.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Investment Gds</td>
<td>2.0%</td>
<td>4.1%</td>
<td>4.4%</td>
<td>51.2%</td>
<td>34.6%</td>
<td>15.9%</td>
<td style="color: red;">-31.4%</td>
<td>47.6%</td>
<td>76.3%</td>
</tr>
<tr>
<td class="firstcol">Miining</td>
<td>0.1%</td>
<td>3.3%</td>
<td>1.1%</td>
<td>19.2%</td>
<td style="color: red;">-8.6%</td>
<td>1.4%</td>
<td style="color: red;">-9.1%</td>
<td>14.1%</td>
<td>87.9%</td>
</tr>
<tr>
<td class="firstcol">Electric&amp;Gas</td>
<td>-0.9%</td>
<td>2.0%</td>
<td>2.2%</td>
<td>14.3%</td>
<td>20.2%</td>
<td>7.8%</td>
<td style="color: red;">-7.5%</td>
<td>19.3%</td>
<td>94.5%</td>
</tr>
</tbody>
</table>
U.S. Mortgages Past Due Set
Another Record 
by <a href="/comment/Moeller.html">Tom
Moeller</a> May 19,2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Financial strains in the housing market just won't let up. The
Mortgage Bankers Association reported that as of last quarter, a record
10.1% of all mortgages were late. That's up from 9.5% at the end of
last year and nearly double the rate before the last recession began.
Including those loans in inventory the percentage is an even higher
14.0%.
The record number of delinquencies is quite notable for those
late by 90 days and over. The rise to 5.0% is up from 1.5% in 2007. For
those late by 90 days or less, the figure actually is down from the
peak in early 2009, though it's up since before the recession.
No category of mortgages has seen delinquencies rise more than
amongst subprime borrowers. Here, more than one-quarter of the loans
were past due last quarter versus 7.3% for prime loans. The largest
increase has occurred for those late by more than 90 days to 15.0% of
loans from 3% in 2004.
Despite the rise in delinquencies, lenders have found it more
promising to renegotiate loan terms than to foreclose. As a result, the
foreclosure rate has fallen to 1.2% from its high during the middle of
last year of 1.5%.
The Mortgage Bankers data is available in
Haver's MBAMTG database.
The minutes to the latest FOMC meeting can
be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20100428.pdf">here</a>. 
 

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100519g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><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">Mortgage
Loan Delinquency
Rate (%)</a></th>
<th scope="col">1Q '10</th>
<th scope="col">4Q '09</th>
<th scope="col">3Q '09</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">All Mortgages Past Due</td>
<td>10.1</td>
<td>9.5</td>
<td>9.6</td>
<td>9.5</td>
<td>7.9</td>
<td>5.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
30-59 Days</td>
<td>3.5</td>
<td>3.3</td>
<td>3.6</td>
<td>3.3</td>
<td>3.5</td>
<td>3.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
60-89 Days</td>
<td>1.6</td>
<td>1.5</td>
<td>1.7</td>
<td>1.5</td>
<td>1.6</td>
<td>1.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
90 Days &amp; Over</td>
<td>5.0</td>
<td>4.6</td>
<td>4.4</td>
<td>4.6</td>
<td>2.8</td>
<td>1.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Conventional Prime</td>
<td>7.3</td>
<td>6.7</td>
<td>6.8</td>
<td>6.7</td>
<td>5.1</td>
<td>3.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Conventional Subprime</td>
<td>27.2</td>
<td>25.3</td>
<td>26.4</td>
<td>25.3</td>
<td>21.9</td>
<td>17.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Mortgages in Foreclosure</td>
<td>1.2</td>
<td>1.1</td>
<td>1.4</td>
<td>5.4</td>
<td>4.3</td>
<td>2.8</td>
</tr>
</tbody>
</table>

</body></html>

U.S. CPI: Broad-Based Weakness IsBehind Slight M/M Decline

Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
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.grey5{
background-color:#b8b8b8;
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</style>
</head>
<body>
 



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100518j.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
The financial crisis in the Euro Area cast a wet blanket on
the optimism of German institutional investors and analysts. The survey
of 275 participants was taken during the period from May 3 to May 17.
The May balance of opinion of those expecting improved conditions over
the next six months over those expecting worsening conditions dropped
7.2 points from 53.0% in April to 45.8% in May. The balance has fallen
from the peak of 57.7% in September of last year, but it is still well
above its average value of 27.4, as can be seen in the first chart.
The balance of opinion on current conditions, however,
improved by 17.6 points from -39.2% to 21.6% over the same period. The
excess of pessimists is down substantially from the -92.8% balance in
May 2009. The German financial community tends to view current
conditions pessimistically. Over the life of the survey, the average
view of current conditions has been a balance of pessimist over
optimists of 32.4% as can be seen in the second chart. The May figure
is slightly above the average.
In spite of downgrade in expectations for the economy over the
next six months, the financial community expects increased profits for
each of the industries polled except for Services, Banking, and
Insurance, industries most likely to be affected by financial turmoil.
Small increases in profits are expected in the Utilities,
Telecommunication, Information Technology, Construction and
Consumption/Trade industries. More substantial increases in profits are
expected in the Vehicle/Automotive, Chemical/Pharmaceutical, Machinery,
Steel/Metal and Electronic industries. Profit expectations in the first
four of these industries are shown in the third chart.

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100518k.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100518l.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">ZEW
Indicator (% Balance)</th>
<th scope="col">May 10&nbsp;</th>
<th scope="col">Apr 10&nbsp;</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>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Current Conditions</td>
<td>-21.6</td>
<td>-39.2</td>
<td>-56.9</td>
<td>-54.8</td>
<td>-56.6</td>
<td>-60.6</td>
<td>-65.6</td>
<td>-42.2</td>
</tr>
<tr>
<td class="firstcol">Expectation Next
Six Months</td>
<td>45.8</td>
<td>53.0</td>
<td>44.5</td>
<td>45.1</td>
<td>47.2</td>
<td>50.4</td>
<td>51.1</td>
<td>56.0</td>
</tr>
</tbody>
</table>
</body></html>

The financial crisis in the Euro Area cast a wet blanket on the optimism of German institutional investors and analysts. The survey of 275 participants was taken during the period from May 3 to May 17. The May balance of opinion of [...]

The May ZEW Survey Of The German Financial Community Sends A Mixed Message

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.

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**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.

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**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.

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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

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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.

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**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

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**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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