Tom Moeller

The service sector clearly is on the road to recovery. The Institute for Supply Management's (ISM) Composite Index for the service & construction sectors rose in March to 55.4 from 53.0 in February. It was the third consecutive [...]

U.S. ISM Nonmanufacturing Index Continues To Strengthen

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<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402f.jpg" style="width: 353px; height: 265px;" align="right"> Making up
sales which earlier had suffered from "special" factors, <b>U.S.
unit sales of&nbsp; light vehicles</b> during March jumped to
11.78M units (SAAR) from 10.38M in February. The latest was the highest
level since last August when aggressive sales promotions lifted sales.
March sales fell slightly short of Consensus expectations for 12.0M.
(Seasonal adjustment of these figures is provided by the U.S. Bureau of
Economic Analysis).</p><p>Sales of <b>domestically&nbsp; produced
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402g.jpg" style="width: 353px; height: 265px;" align="right">
vehicles</b> jumped 14.0% last month to 8.79M units (28.5% y/y)
from 7.71M in February. Sales of fuel efficient cars rose 11.8% for the
month (28.8% y/y) while light truck sales also posted a solid 16.0% m/m
gain (28.3% y/y). <b>Imported light vehicle</b> sales
recovered 12.0% (3.7% y/y) after a sharp February decline, due in part
to the recall of some Toyota models. With a 5.9% gain, sales of
imported autos recovered all of the February loss while light truck
sales were stronger with a m/m gain of 24.9%, though just 1.7% y/y.</p><p>Overall,<b> import's share </b>of the U.S.
light vehicle market during February fell to 25.4%. The share has been
declining erratically from its high of 30.5% in February '09 and from
27.6% during all of last year. (Imported vehicles are those produced
outside the United States.) Imports' share of the U.S. car market fell
m/m to 31.8% and that was below 34.8% during 2009. Imports' share of
the light truck market improved to 18.7% but remained below the 19.6%
last year.</p><p>The U.S. vehicle sales figures can be
found in Haver's<b> USECON </b>database.&nbsp;</p>
<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/@ED/@ED09/@ED0901/@ED0901.HTM%22" style="color: rgb(0, 0, 0);"><b>Light Vehicle Sales
(SAAR, Mil. Units)</b></a></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</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">Total</td>
<td>11.78</td>
<td>10.38</td>
<td>10.78</td>
<td>21.2%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>6.04</td>
<td>5.49</td>
<td>5.70</td>
<td>20.1</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.12</td>
<td>3.68</td>
<td>3.78</td>
<td>28.8</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.92</td>
<td>1.81</td>
<td>1.92</td>
<td>4.8</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.74</td>
<td>4.88</td>
<td>5.08</td>
<td>22.4</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.67</td>
<td>4.03</td>
<td>4.11</td>
<td>28.3</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.07</td>
<td>0.86</td>
<td>0.97</td>
<td>1.7</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
</span></body></html>

Making up sales which earlier had suffered from "special" factors, U.S. unit sales of light vehicles during March jumped to 11.78M units (SAAR) from 10.38M in February. The latest was the highest level since last August when [...]

U.S. Vehicle Sales Recover

Robert Brusca

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Policymakers around the world have used the auto sector as a
lever to try and pry growth out of their respective economies. It may
seem strange that such a &#8216;big ticket item&#8217; would be uses so
universally, but that is partly the result of the type of crisis
governments and central banks have been fighting. Few buy cars without
bank financing. And bank financing had retracted sharply in the crisis.</p>
<p>Auto incentives ladened with tax breaks helped to get the
sector moving ahead. Now the incentives have been removed and sales are
falling back to economically supportable levels. In the e-Zone we can
see that while car sales are falling back retail sales have been
steadily cutting their losses. It&#8217;s not great but its progress.</p>
<p>France and Italy are the early auto sales (actually
registrations are recorded in Europe) reporters. They each show that
sales have advanced in March more than compensating for the sales drop
in February. Although the drop off in overall auto sales seems severe,
it is only sales getting back to normal after some very successful
incentives. The reduction in the rate of decline in retail sales
underscores that there is some progress on the part of the
Euro-consumer. France and Italy are showing that m/m sales can still
rise in this environment in which has the growth rate of Yr/Yr sales
dropping so sharply.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col"> <b>Euro-Area
Car Registrations</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo %</td>
<td colspan="2">3-Mo Trend From</td>
<td colspan="2">6-Mo Trend From</td>
<td colspan="2">12-Mo Trend From</td>
</tr>
<tr class="odd">
<td class="firstcol">All Seas Adj</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
France(&amp;WDA)</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>-17.0%</td>
<td>-50.8%</td>
<td>-46.2%</td>
<td>6.2%</td>
<td>23.6%</td>
<td>12.7%</td>
<td>18.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Italy</td>
<td>5.1%</td>
<td>-2.9%</td>
<td>-2.5%</td>
<td>-2.0%</td>
<td>-19.2%</td>
<td>11.6%</td>
<td>7.1%</td>
<td>12.2%</td>
<td>21.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">base Month of Calc</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>Mar-09</td>
<td>Feb-09</td>
</tr>
</tbody>
</table>
</body></html>

Policymakers around the world have used the auto sector as a lever to try and pry growth out of their respective economies. It may seem strange that such a ‘big ticket item’ would be uses so universally, but that is partly the result [...]

Auto Sales In The Zone Come Back To Earth

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402b.jpg" style="width: 312px; height: 265px;"></p>
<p>The Bureau of Labor Statistics reported that, all-in-all,
labor market conditions firmed somewhat more-than-expected last month.
From the household survey, the unemployment rate held steady for the
third month at an expected 9.7%, down from the October high of 10.1%.
That stability owed to improved hiring. Employment rose 264,000 (-1.4%
y/y) for the third consecutive monthly gain. These increases follow
monthly declines of as much as 967,000 during the recession. In
addition, improved hiring is prompting an expansion of the labor force.
The 398,000 gain (-0.2% y/y) was the largest of three consecutive
monthly increases. Throughout 2009 the labor force contracted slightly.
The gain reflects a rise in the labor force participation rate to
64.9%, its third month of increase following steady declines last year.</p>
<p>The establishment survey also painted a picture of an improved
job market. To start, payrolls expanded 162,000. Though the gain was
slightly less-than-expected, the increase followed a lessened decline
of 14,000 in February. Also, a slight decline in January payrolls was
revised to a small increase. The real surprise, however, was that
Census workers contributed just 48,000 to last month's payroll gain and
that raised government hiring by 39,000 (-0.3% y/y). Therefore,
private-sector jobs expanded 123,000 (-2.1% y/y), the biggest of four
gains in the last five months.</p>
<p>The payroll gain reflected an 82,000 increase in
private-services. It was the fourth increase in the last five months
after severe weather dampened February hiring. Temporary jobs rose
40,200 (8.9% y/y) for the sixth consecutive monthly increase.
Construction jobs benefitted from the weather as well with a 15,000
increase, though it was the first gain since early-2007. Factory sector
employment also firmed and the 17,000 rise was the third consecutive
monthly increase.</p>
<p>The total workweek bounced back after the storm and earlier
numbers were upwardly-revised. The gain to 34.0 hours pulled the
workweek to its longest in twelve months. Combined with the gain in
employment, aggregate hours worked rose 0.7% and by 0.4% last quarter.</p>
<p>Average hourly earnings fell 0.1% and reversed the February
increase. It was the first monthly decline since 2003 and lowered the
y/y gain to 2.1%, its weakest since early-2004.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402d.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>Employment:
000s</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</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">Payroll Employment</td>
<td>162</td>
<td>-14</td>
<td>14</td>
<td>-1.8%</td>
<td>-4.3%</td>
<td>-0.6%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-36</td>
<td>-26</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Manufacturing</td>
<td>17</td>
<td>6</td>
<td>22</td>
<td>-5.2%</td>
<td>-11.3%</td>
<td>-3.4%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Construction</td>
<td>15</td>
<td>-59</td>
<td>-60</td>
<td>-11.1%</td>
<td>-15.7%</td>
<td>-6.1%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Private
Service Producing</td>
<td>82</td>
<td>55</td>
<td>46</td>
<td>-1.0%</td>
<td>-3.4%</td>
<td>-0.2%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Government</td>
<td>39</td>
<td>-22</td>
<td>-2</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>1.3%</td>
<td>1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>34.0</td>
<td>33.9</td>
<td>34.0</td>
<td>34.0(March '09)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>2.1%</td>
<td>3.0%</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>9.7%</td>
<td>9.7%</td>
<td>9.7%</td>
<td>8.6%(March '09)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

The Bureau of Labor Statistics reported that, all-in-all, labor market conditions firmed somewhat more-than-expected last month. From the household survey, the unemployment rate held steady for the third month at an expected 9.7%, [...]

U.S. Job Market Firms; Jobless Rate Is Steady And Payrolls Rise

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402a.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402b.jpg" style="width: 312px; height: 265px;"></p>
<p>The Bureau of Labor Statistics reported that, all-in-all,
labor market conditions firmed somewhat more-than-expected last month.
From the household survey, the unemployment rate held steady for the
third month at an expected 9.7%, down from the October high of 10.1%.
That stability owed to improved hiring. Employment rose 264,000 (-1.4%
y/y) for the third consecutive monthly gain. These increases follow
monthly declines of as much as 967,000 during the recession. In
addition, improved hiring is prompting an expansion of the labor force.
The 398,000 gain (-0.2% y/y) was the largest of three consecutive
monthly increases. Throughout 2009 the labor force contracted slightly.
The gain reflects a rise in the labor force participation rate to
64.9%, its third month of increase following steady declines last year.</p>
<p>The establishment survey also painted a picture of an improved
job market. To start, payrolls expanded 162,000. Though the gain was
slightly less-than-expected, the increase followed a lessened decline
of 14,000 in February. Also, a slight decline in January payrolls was
revised to a small increase. The real surprise, however, was that
Census workers contributed just 48,000 to last month's payroll gain and
that raised government hiring by 39,000 (-0.3% y/y). Therefore,
private-sector jobs expanded 123,000 (-2.1% y/y), the biggest of four
gains in the last five months.</p>
<p>The payroll gain reflected an 82,000 increase in
private-services. It was the fourth increase in the last five months
after severe weather dampened February hiring. Temporary jobs rose
40,200 (8.9% y/y) for the sixth consecutive monthly increase.
Construction jobs benefitted from the weather as well with a 15,000
increase, though it was the first gain since early-2007. Factory sector
employment also firmed and the 17,000 rise was the third consecutive
monthly increase.</p>
<p>The total workweek bounced back after the storm and earlier
numbers were upwardly-revised. The gain to 34.0 hours pulled the
workweek to its longest in twelve months. Combined with the gain in
employment, aggregate hours worked rose 0.7% and by 0.4% last quarter.</p>
<p>Average hourly earnings fell 0.1% and reversed the February
increase. It was the first monthly decline since 2003 and lowered the
y/y gain to 2.1%, its weakest since early-2004.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402c.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402d.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>Employment:
000s</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</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">Payroll Employment</td>
<td>162</td>
<td>-14</td>
<td>14</td>
<td>-1.8%</td>
<td>-4.3%</td>
<td>-0.6%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-36</td>
<td>-26</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Manufacturing</td>
<td>17</td>
<td>6</td>
<td>22</td>
<td>-5.2%</td>
<td>-11.3%</td>
<td>-3.4%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Construction</td>
<td>15</td>
<td>-59</td>
<td>-60</td>
<td>-11.1%</td>
<td>-15.7%</td>
<td>-6.1%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;Private
Service Producing</td>
<td>82</td>
<td>55</td>
<td>46</td>
<td>-1.0%</td>
<td>-3.4%</td>
<td>-0.2%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;Government</td>
<td>39</td>
<td>-22</td>
<td>-2</td>
<td>-0.3%</td>
<td>0.2%</td>
<td>1.3%</td>
<td>1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>34.0</td>
<td>33.9</td>
<td>34.0</td>
<td>34.0(March '09)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>-0.1%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>2.1%</td>
<td>3.0%</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>9.7%</td>
<td>9.7%</td>
<td>9.7%</td>
<td>8.6%(March '09)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
<span id="articletitle">Auto Sales In The Zone Come Back
To Earth</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> April 2, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Policymakers around the world have used the auto sector as a
lever to try and pry growth out of their respective economies. It may
seem strange that such a &#8216;big ticket item&#8217; would be uses so
universally, but that is partly the result of the type of crisis
governments and central banks have been fighting. Few buy cars without
bank financing. And bank financing had retracted sharply in the crisis.</p>
<p>Auto incentives ladened with tax breaks helped to get the
sector moving ahead. Now the incentives have been removed and sales are
falling back to economically supportable levels. In the e-Zone we can
see that while car sales are falling back retail sales have been
steadily cutting their losses. It&#8217;s not great but its progress.</p>
<p>France and Italy are the early auto sales (actually
registrations are recorded in Europe) reporters. They each show that
sales have advanced in March more than compensating for the sales drop
in February. Although the drop off in overall auto sales seems severe,
it is only sales getting back to normal after some very successful
incentives. The reduction in the rate of decline in retail sales
underscores that there is some progress on the part of the
Euro-consumer. France and Italy are showing that m/m sales can still
rise in this environment in which has the growth rate of Yr/Yr sales
dropping so sharply.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col"> <b>Euro-Area
Car Registrations</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo %</td>
<td colspan="2">3-Mo Trend From</td>
<td colspan="2">6-Mo Trend From</td>
<td colspan="2">12-Mo Trend From</td>
</tr>
<tr class="odd">
<td class="firstcol">All Seas Adj</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Mar-10</td>
<td>Feb-10</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
France(&amp;WDA)</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>-17.0%</td>
<td>-50.8%</td>
<td>-46.2%</td>
<td>6.2%</td>
<td>23.6%</td>
<td>12.7%</td>
<td>18.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Italy</td>
<td>5.1%</td>
<td>-2.9%</td>
<td>-2.5%</td>
<td>-2.0%</td>
<td>-19.2%</td>
<td>11.6%</td>
<td>7.1%</td>
<td>12.2%</td>
<td>21.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">base Month of Calc</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>Dec-09</td>
<td>Nov-09</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>Mar-09</td>
<td>Feb-09</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Vehicle Sales Recover</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> April 2, 2010</span>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402f.jpg" style="width: 353px; height: 265px;" align="right">
Making up
sales which earlier had suffered from "special" factors, <b>U.S.
unit sales of&nbsp; light vehicles</b> during March jumped to
11.78M units (SAAR) from 10.38M in February. The latest was the highest
level since last August when aggressive sales promotions lifted sales.
March sales fell slightly short of Consensus expectations for 12.0M.
(Seasonal adjustment of these figures is provided by the U.S. Bureau of
Economic Analysis).</p>
<p>Sales of <b>domestically&nbsp; produced
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100402g.jpg" style="width: 353px; height: 265px;" align="right">vehicles</b>
jumped 14.0% last month to 8.79M units (28.5% y/y)
from 7.71M in February. Sales of fuel efficient cars rose 11.8% for the
month (28.8% y/y) while light truck sales also posted a solid 16.0% m/m
gain (28.3% y/y). <b>Imported light vehicle</b> sales
recovered 12.0% (3.7% y/y) after a sharp February decline, due in part
to the recall of some Toyota models. With a 5.9% gain, sales of
imported autos recovered all of the February loss while light truck
sales were stronger with a m/m gain of 24.9%, though just 1.7% y/y.</p>
<p>Overall,<b> import's share </b>of the U.S.
light vehicle market during February fell to 25.4%. The share has been
declining erratically from its high of 30.5% in February '09 and from
27.6% during all of last year. (Imported vehicles are those produced
outside the United States.) Imports' share of the U.S. car market fell
m/m to 31.8% and that was below 34.8% during 2009. Imports' share of
the light truck market improved to 18.7% but remained below the 19.6%
last year.</p>
<p>The U.S. vehicle sales figures can be
found in Haver's<b> USECON </b>database.&nbsp;</p>
<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/@ED/@ED09/@ED0901/@ED0901.HTM%22" style="color: rgb(0, 0, 0);"><b>Light Vehicle Sales
(SAAR, Mil. Units)</b></a></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</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">Total</td>
<td>11.78</td>
<td>10.38</td>
<td>10.78</td>
<td>21.2%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>6.04</td>
<td>5.49</td>
<td>5.70</td>
<td>20.1</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.12</td>
<td>3.68</td>
<td>3.78</td>
<td>28.8</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.92</td>
<td>1.81</td>
<td>1.92</td>
<td>4.8</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.74</td>
<td>4.88</td>
<td>5.08</td>
<td>22.4</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.67</td>
<td>4.03</td>
<td>4.11</td>
<td>28.3</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.07</td>
<td>0.86</td>
<td>0.97</td>
<td>1.7</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
</span>
</body></html>

U.S. Job Market Firms; JoblessRate Is Steady And Payrolls Rise

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100401i.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>In terms of its broad trends German retail sales are beginning
to do a bit better. The three-month rate of growth is better than the
six-month rate of growth which exceeds the twelve month rate of growth.
So the sequential growth rates for German nominal sales are turning
higher.</p>
<p>Still January and February are not very strong months for
German consumers. Retail sales ex autos were flat in February and off
by 0.4% in January. Inflation-adjusted sales are off for two months
running. The sequential growth rates for Real ex-auto retail sales are
not as bright as for nominal sales either. Still they are not bad
registering acceleration for 12-months to six months and growth over
three months even if a bit slower than it was over six months. But at
this rate we&#8217;ll have to see if the trend holds up.</p>
<p>In the quarter-to-date German retail sales are falling for all
but two categories. Food beverage and tobacco sales are up in the
quarter-to-date and car registrations are flat. Still nominal retail
sales are falling at 0.2% annual rate and real ex auto retail sales are
falling at a 1.6% pace.</p>
<p>As Europe&#8217;s biggest economy Germans are doing very little to
provide the domestic demand to boost the euro-zone into recovery.
Instead Germany&#8217;s tactic is to sit back and let its export growth
benefit from increases in domestic demand elsewhere and let that pull
Germany into an export-led recovery. It&#8217;s not a very leading role for
Europe&#8217;s largest economy and it goes a long way to explain why Europe
simply lacks economic dynamism.<b></b></p>
</span>

<table border="0" cellspacing="0" width="100%">
<colgroup><col></colgroup>
<thead><tr><th colspan="9" scope="col">German Real and Nominal Retail Sales </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>YrAgo</td>
<td>QTR<br>
Saar</td>
</tr>
<tr>
<td class="firstcol">Retaill Ex auto</td>
<td>0.0%</td>
<td style="color: red;">-0.4%</td>
<td>1.1%</td>
<td>2.9%</td>
<td>1.0%</td>
<td style="color: red;">-0.5%</td>
<td>-3.5%</td>
<td style="color: red;">-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">MV and Parts</td>
<td style="color: red;">-0.4%</td>
<td style="color: red;">-0.5%</td>
<td>1.0%</td>
<td>0.4%</td>
<td>0.8%</td>
<td style="color: red;">-0.9%</td>
<td>-3.3%</td>
<td style="color: red;">-1.6%</td>
</tr>
<tr>
<td class="firstcol">Food Bev &amp;
Tobacco</td>
<td style="color: red;">-2.3%</td>
<td>0.0%</td>
<td>2.2%</td>
<td style="color: red;">-0.4%</td>
<td style="color: red;">-7.1%</td>
<td>0.0%</td>
<td>-2.5%</td>
<td>1.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Clothing footwear</td>
<td>1.6%</td>
<td style="color: red;">-3.1%</td>
<td>5.3%</td>
<td>15.1%</td>
<td>10.3%</td>
<td style="color: red;">-1.2%</td>
<td>-4.5%</td>
<td>-11.4%</td>
</tr>
<tr>
<td class="firstcol">car registrations
(units)</td>
<td>1.8%</td>
<td>2.7%</td>
<td style="color: red;">-16.7%</td>
<td style="color: red;">-42.6%</td>
<td style="color: red;">-43.3%</td>
<td style="color: red;">-29.9%</td>
<td>28.5%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td colspan="9" class="firstcol">Real</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Retail
Ex auto</td>
<td style="color: red;">-0.4%</td>
<td style="color: red;">-0.5%</td>
<td>1.0%</td>
<td>0.4%</td>
<td>0.8%</td>
<td style="color: red;">-0.9%</td>
<td style="color: red;">-3.3%</td>
<td style="color: red;">-1.6%</td>
</tr>
</tbody>
</table>
</body></html>

In terms of its broad trends German retail sales are beginning to do a bit better. The three-month rate of growth is better than the six-month rate of growth which exceeds the twelve month rate of growth. So the sequential growth [...]

German Retail Sales Back-Track In February But Still Show An Uptrend Can It Last?

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100401e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Labor market improvement is continuing. Last week initial
claims for jobless insurance figure fell 6,000 to 439,000 which was the
lowest level since August 2008. The earlier week's level was revised up
slightly and the latest is down from the recession peak of 651,000
reached in March of 2009. Last week's level roughly matched Consensus
expectations for 440,000 new claims while the four-week moving average
of initial claims fell to another cycle-low 447,250.</p>
<p>In addition, continuing claims for unemployment insurance
during the latest week also fell to a cycle low and are down by
one-third since late-June. 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 fell to a cycle low of 4.680 mil. This series dates
back to 1966.</p>
<p>Extended benefits for unemployment insurance dropped sharply
to another cycle low of 136,990. They were down by two-thirds from a
peak of 597,688 reached in November.Each state administers a separate
unemployment insurance program within guidelines established by Federal
law. Benefit amounts and the length of time benefits are received are
determined by state law. For example, in Michigan and New York, an
additional 73 weeks of benefits are available and in California, an
additional 79 weeks are available.</p>
<p>The insured unemployment rate held steady at 3.6% during the
prior week. The rate reached a high of 4.9% during May. 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.</p>
<p>The highest insured unemployment rates in the week ending
March 12 were in Alaska (7.2% percent), Oregon (6.1), Pennsylvania
(6.0), Wisconsin (5.9), Michigan (5.5), Nevada (5.5), North Carolina
(5.1) and Connecticut (5.0). The lowest insured unemployment rates were
in Virginia (2.0), Texas (2.3), Georgia (3.0), Florida (3.1), Wyoming
(3.5), Maryland (3.6), Ohio (3.7), New York (4.0) and Maine (4.3).
These data are not seasonally adjusted but the overall insured
unemployment rate is.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100401f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100401g.jpg" style="width: 312px; height: 265px;">&gt;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b>3/26/10</b></th>
<th scope="col"><b>3/19/10</b></th>
<th scope="col"><b>3/12/10</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">Initial Claims</td>
<td>439</td>
<td>445</td>
<td>454</td>
<td>-32.6%</td>
<td>572</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,662</td>
<td>4,668</td>
<td>-19.3%</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>4.3 (3/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

Labor market improvement is continuing. Last week initial claims for jobless insurance figure fell 6,000 to 439,000 which was the lowest level since August 2008. The earlier week's level was revised up slightly and the latest is down [...]

U.S. Initial Claims For Jobless Insurance Fall To Lowest Since 2008

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100331h.jpg" style="border: 0px solid ; width: 363px; height: 265px; float: right;" align="left"></p>
<p>The Mortgage Bankers Association reported that while
applications for refinancing were weak, purchase applications firmed
during March. Overall, applications rose 2.5% this month after a 10.8%
increase in February.</p>
<p>The gain likely has been fueled by an $8,000 Federal tax
credit which is due to expire April 30. For last week, applications to <i>purchase</i>
a home rose 8.8% in March but that followed declines during the prior
two months. During the last ten years there has been a 51% correlation
between the y/y change in purchase applications and the change in new
plus existing single family home sales. The correlation has lessened
recently. For mortgage<i> refinancings</i> applications
were unchanged in March but they still have trended higher since
mid-2009.</p>
<p>The effective fixed interest rate on conventional 15-year
mortgages held roughly steady at 4.59% last week. For the month,
overall rates have been near the six year low. For 30-year mortgages
the rate also were steady at 5.19%. Rates reached a high of 5.79% in
early-June. Interest rates on fixed 15-year and 30-year mortgages are
closely correlated (near-90%) with the rate on 10-year Treasury
securities. Rates on adjustable one-year mortgages rose slightly to
6.95% last week.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100331i.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100331j.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/SURVEYW/@S5/@S5.HTM%22" style="color: black;"><b>MBA Mortgage Applications
(SA, 3/16/90=100)</b></a></th>
<th scope="col"><b>03/26/10</b></th>
<th scope="col"><b>03/19/10</b></th>
<th scope="col"><b>03/12/10</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">Total Market Index</td>
<td>602.8</td>
<td>595.0</td>
<td>620.9</td>
<td>-49.5%</td>
<td>736.4</td>
<td>642.9</td>
<td>652.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>243.0</td>
<td>227.5</td>
<td>221.5</td>
<td>-9.3</td>
<td>263.5</td>
<td>345.4</td>
<td>424.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,707.8</td>
<td>2,744.7</td>
<td>2,955.9</td>
<td>-59.0</td>
<td>3,509.2</td>
<td>2,394.1</td>
<td>1,997.9</td>
</tr>
<tr>
<td class="firstcol">15-Year Mortgage Effective
Interest Rate (%)</td>
<td>4.59</td>
<td>4.53</td>
<td>4.60</td>
<td>4.77 (03/09)</td>
<td>4.85</td>
<td>5.9</td>
<td>6.2</td>
</tr>
</tbody>
</table>
</body></html>

The Mortgage Bankers Association reported that while applications for refinancing were weak, purchase applications firmed during March. Overall, applications rose 2.5% this month after a 10.8% increase in February. The gain likely has [...]

U.S. Weekly Mortgage Applications Firmed In March

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Negative US inflation surprises leading G10 down

Deflation continues in China

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Winnie Tapasanun

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New single-family home sales dipped 0.1% m/m (+18.7% y/y) to a seasonally adjusted annual rate of 737,000 units in October following rises of 3.8% to 738,000 in September and 11.3% to 711,000 in August (+20.5%, 800,000 previously), data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected sales of 710,000 for October. The October figure was the first m/m decline since July, though sales remained 42.0% up from the July 2022 low of 519,000. The sales dip occurred alongside a drop in the average 30-year fixed mortgage rate to 6.25% in October, the lowest since September 2024, after declining to 6.35% in September; it had subsequently continued trending downward, according to Freddie Mac.

By region, October new home sales fell m/m in all major regions except the South. Sales in the West plunged 36.3% (-24.8% y/y) to 109,000 in October, the lowest level since July 2022, after a 9.6% increase in September. Sales in the Northeast dropped 14.3% (-40.0% y/y) to 24,000 after registering at 28,000 in September and August. Sales in the Midwest fell 9.0% (+21.3% y/y) to 91,000 following a strong 25.0% September gain. For these three regions, October marked the first m/m decline since July. In contrast, sales in the South surged 16.9% (42.1% y/y) to 513,000, the highest level since March 2021, after a 1.8% September decline. The South remained the dominant region, accounting for 69.6% of total U.S. new home sales.

The median sales price of a new home fell 3.3% (-8.0% y/y) to $392,300 in October on top of a 3.4% decline to $405,800 in September, marking the fourth m/m fall in five months and the lowest level since July 2021. The median sales price had fallen 14.8% since its record high of $460,300 in October 2022. Meanwhile, the average sales price of a new home rose 3.0% (-4.6% y/y) to $498,000 in October after an 8.1% drop to $483,500 in September. The average price was 8.0% below a high of $541,200 in July 2022. These sales price data are not seasonally adjusted.

The number of unsold new homes on the market held steady at 488,000 (+1.7% y/y) in October after four straight m/m declines. The latest figure was 14.6% above a low of 426,000 in July 2023. The seasonally adjusted months' supply of new homes for sale remained at 7.9 months in October and September—the lowest reading since September 2024—after falling to 8.3 months in August. The latest reading, while above a low of 6.9 months in May 2023, remained below a high of 10.6 months in July 2022.

The median number of months a new home stayed on the market rose to 2.7 months in October, the highest since March 2025, after registering at 2.4 months in September and August. The latest number was above its record low of 1.5 months in both September and October of 2022 but well below a peak of 5.1 months in March 2021. These figures date back to January 1975.

New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver's **USECON** database. The consensus expectation figure from Action Economics is available in the **AS1REPNA** database.

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- October sales -0.1% (+18.7% y/y) to 737,000; still 42.0% above the July ’22 low.
- Sales fall m/m in all major regions except the South (+16.9%).
- Median sales price down to $392,300, lowest since July ’21; avg. price up to $498,000.
- Months' supply of new homes for sale holds steady at 7.9 mths., lowest since Sept. '24.

U.S. New Home Sales Ease in October After Two Straight M/M Increases

Michael J. Moran

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The consumer price index rose 0.3% in December, while the core index (prices excluding food and energy) rose 0.2%. Both measures were faster than the averages of 0.1 percent in the prior two months. (The Bureau of Labor Statistics did not publish a CPI for October because of the government shutdown. Both the headline and core indexes showed increases of 0.2% for the two-month period from September to November.)

The December results were not pronounced enough to suggest that the restraint in October and November reflected distortions triggered by the government shutdown. At the same time, they were not soft enough to suggest that October and November were signaling faster deceleration in inflation. The past three months seemed to be showing the same degree of random volatility seen in the prior two years, with the underlying trends showing a slight degree of deceleration. The year-over-year increase in headline CPI totaled 2.7%, only slightly slower than 3.0% in mid-2024. The Core has eased a bit more: 2.6% in December versus 3.3% in mid 2024.

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Prices of core goods and services have been following different paths in the past few years, and they carried different signals in December. Prices of core goods showed no month-to-month change in December, which kept the year-over-year trajectory moving sideways. The flat pattern is encouraging in that it suggests that core goods inflation is perhaps steadying after trending upward since mid-2024. Core service prices rose 0.3 percent in December, in line with the recent average. Core service inflation showed little easing in the early part of 2025, but hints of slowing emerged from September to November. December results, though, raised questions about faster deceleration in service inflation.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

- Not by enough to suggest that restraint in October and November reflected distortions from the government shutdown
- But by enough to suggest that October and November reflected normal volatility rather than the beginning of a slower trend.

December CPI: Price Increases Quickened After Two Slow Months

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Japan’s economy watchers index at year-end weakened slightly, but the future index strengthened slightly to counterbalance the drop-off. The December current index is weaker than it was in October as well, as is the headline for the future index. But the queue, or rank, standings of these indexes show the current index at a 60th percentile standing and a queue standing for the future index at its 70th percentile. Despite the end of year give back, the index headline readings are still, for the most part, firm-to-solid.

**The Current Index**
That is an assessment about the rankings of the December data compared to their respective histories back to end 2004- a twenty-year period. However, in terms of the diffusion values of the index per se, the current index has only two readings above the 50 mark indicating actual expansion. Expansion is the rule in current services industries and in nonmanufacturing, a broader sector dominated by services. Employment and readings for corporations overall both show readings close to neutral with diffusion at 49.2 or better, but still short of 50. Current retail at 46.5 is the weakest sector and shows the second weakest diffusion reading.  

The current index standings on employment has a reading below 50%- and that is despite having a diffusion reading near 50 -nearly  unchanged employment month-to-month. That diffusion reading for December is a low relative to its own history. The strongest two sectors on rankings are services and eating & drinking places with standings in the 70-percentile range. Apart from the weak employment standing, the weakest rankings are in the range of the lower sixty percentiles with only retailing lower, in its 56.5 percentile, manufacturing at its 61.7 percentile. 

**The Future Index**
The Future index has a slightly higher queue standing than the current index as noted above, but it is not vastly different. No future components rankings are below their 50%, but again, employment is weakest with a ranking in its 50th-percentile and with housing in its 53rd percentile. Nonmanufacturing and services have the highest queue standings.

In terms of diffusion readings as opposed to standings, the future index headline is above 50 unlike for the current headline. Six of nine observations in December have future readings in their respective 50.6 percentiles. The weakest future reading, housing, with a 46.2 reading, is followed by retailing and eating & drinking places, each at 49.6. But the above-50 readings ae not strong per-se either. The strongest is the services sector at 52.4, then nonmanufacturing at 51.7, followed by employment at 51.4 (and it has the weakest queue standing among future readings). Corporations have a diffusion reading at 50.9, households at 50.3, and manufacturers at 50.2. And that 50.2 reading for manufacturers has a 70.4 percentile standing.

Always remember that diffusion and the rank standings are different things and very different concepts even though they are both measured as percentages; they can be quite different. Various series have different histories and tendencies. Not too surprisingly the current and future diffusion readings are highly correlated (0.96) while the standings are not so well correlated in December between the current and future (0.37). The correlation I speak about above between diffusion and standing is at 0.20 for the current readings in December but is higher at 0.53 for the December future components.

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**Summing up**
The differences in the diffusion values tell us that retailing, households and employment are expected to pick up over the next six months. But housing is expected to weaken.

Japan is still in a fragile state with a relatively new PM still getting adjusted (but rumored to be considering an early snap-election). And with the economy generating excess inflation even with a shrinking population, addressing inflation in Japan is trickier since the Bank of Japan does not want to slay inflation at the cost of bringing back deflation. So, policy is Japan walks on eggshells.

Japan

Japan’s Economy Watchers Survey in December 2025

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Swiss consumer confidence at end-2025 (in Q4) fell to -34.5 from -32.7 in 2025-Q3. The average level for the confidence reading on data back to 1982 is -16.7 and the current queue standing is 13.9%. The Q4 reading is clearly weak- well below its own average and weaker than this month, less than 15% of the time.

Outlook confidence in Q4 fell to -44.9 from -38.0 in Q3, registering a 15.6 percentile standing. The past confidence reading at -61.2 at end-2025 is down from -43.5 at the end of the third quarter. The standing for this reading is in its 19th percentile. All of these are extremely weak readings.

People provide a job security response in Q4 that eases to -50.1, still well above its historic average of -58.2 for a queue ranking at its 57th percentile.

Personal financial readings are moderate to weak across the board. However, current financial conditions rose to 38.4 in Q4 from 35.2 at the end of Q3 and a queue standing above its median at its 56th percentile. But the outlook for financial conditions is much weaker and also weakened quarter-to-quarter to -31.4 in Q4 from a level of -28.6 in Q3 to a queue ranking in its 8.7 percentile. The evaluation of past financial conditions improved by a very small margin, rising to -38.3 in Q4 from -38.7 in Q3, and to a queue standing at the 11.6 percentile.

The spending environment in Switzerland improved slightly but remained weak, rising to -23.3 in Q4 from -25.5 in Q3 to a standing at their 23.1 percentile standing.

The best part of the report is that the perception of job security is above average, and the current financial situation is above its median. After that, all the individual assessment metrics are weak including overall confidence – everything except assessments for inflation.

On the inflation front, the price outlook is high, rising to a reading of 97.7 in Q4 from 95.8 in Q3 but is still below the second quarter reading at 113.1. The price outlook has a moderately high standing at its 70.5 percentile. This standing is slightly below the standing for prices past which is at 76.3%. The past metric was still rising in the fourth quarter but was weaker than its reading in both Q1 and Q2 of 2025.

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**Summing up**
Inflation fears appear to still linger, but they are not as intense as they once were. Confidence overall is weak, but the most important aspects of job security and assessment of financial conditions have the strongest readings; yet, the environment for major purchases is still at a weak position. In Switzerland, people do not feel threatened or financially unstable, but they are not positive enough to spend freely either. And inflation fears are creeping up again all key trends to watch.

Switzerland

Swiss Confidence Sags at End-2025

Tian Yong Woon

This week, we highlight several pertinent developments that have shaped the start of the year and may carry longer-lasting implications. To begin with, the recent capture of former Venezuelan President Maduro by the US authorities and the subsequent crude oil trade deal could have far-reaching effects—potentially altering China’s imports of Venezuelan crude and broader bilateral trade dynamics (chart 1), as well as global energy supply considerations (chart 2).

In Japan, Prime Minister Takaichi’s reported consideration of early snap elections, if enacted, would likely inject near-term political uncertainty (chart 3). However, should her gambit succeed, it could reduce  policy uncertainty and pave the way for more fiscal policy activism. Against this backdrop, it is unsurprising that investors remain divided over the timing of the Bank of Japan’s next policy tightening, although the upcoming Spring wage negotiations (chart 4) ought to provide clearer signals for the monetary policy outlook.

Turning to investor expectations from the latest Blue Chip survey, India is once again seen as the growth leader among major Asian economies, while also poised to record the highest inflation (chart 5). China, by contrast, is expected to deliver sub-5% growth this year alongside muted inflation. Lastly, in Southeast Asia, pockets of geopolitical tension persist—notably between Thailand and Cambodia (chart 6)—as Thailand prepares for snap elections next month.

**The US, Venezuela, and China**
2026 got off to a turbulent start following a recent US military operation in Venezuela that resulted in the capture of former President Maduro and his transfer to the US to face drug-related charges. In the aftermath, Venezuela’s former vice president (Delcy Rodriguez) was sworn in as interim leader, while US and Venezuelan authorities have reportedly already reached a new crude oil deal. Under the agreement, Venezuela would sell 30–50 million barrels of crude to the US at market prices, with the proceeds controlled by the US. These developments have several potential implications. First, some Venezuelan crude initially destined for China would likely be diverted to the US. China has been the main buyer of Venezuelan oil in recent years, although this is likely underreported in official data (chart 1), which would tighten conditions for the crude-import-dependent country. Second, an eventual increase in Venezuelan crude supply—previously constrained by heavy US sanctions—would likely exert downward pressure on global oil prices, all else equal, although significant challenges remain, as discussed below.

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To illustrate the potential significance of Venezuela’s crude oil industry, chart 2 shows that the country holds nearly a fifth of the world’s proved crude oil reserves. However, output remains disproportionately low relative to reserves, possibly reflecting years of US sanctions as well as mismanagement and chronic underinvestment. Given the current state of the industry, substantial investment will likely be required for Venezuela to restore production to historically high levels and to more fully tap its deep proved reserves. As a result, any meaningful surge in Venezuelan crude output is likely to take time, which may help explain the muted market response to recent US–Venezuelan developments. Also of note, China has been a major lender to Venezuela, including through “oil-for-loan” arrangements in which repayments are made in crude oil. It remains to be seen how these existing and future agreements may be affected by recent developments.

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**Japan**
Setting aside the interplay between the US, Venezuela, and China, another economy worth watching early this year is Japan. Developments continue to unfold following renewed China–Japan tensions after Prime Minister Takaichi assumed office. With her approval ratings having remained consistently high since taking the helm, Takaichi is reportedly considering snap elections as early as next month to strengthen her ruling coalition’s parliamentary position. While a stronger mandate could reduce policy uncertainty, near-term political uncertainty would be the likely case. This interim uncertainty may be weighing on the yen. It is being compounded by expectations of upcoming pro-growth measures, including the $118 million supplementary budget passed last December and the prospect of additional fiscal stimulus next fiscal year, contingent on an electoral win (chart 3).

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Turning back to Japan and the monetary policy outlook, investors remain divided over the timing of the Bank of Japan’s (BoJ) next policy move following its December rate hike. This uncertainty is understandable given the multiple moving parts shaping the BoJ’s path, including the factors discussed above. Looking ahead, the upcoming annual wage negotiations and broader trends in wage growth (chart 4) will be closely watched by the BoJ as key preconditions for further rate hikes. Reflecting this uncertainty, our latest Blue Chip Economic Indicators survey shows investors split between expectations for a hike in March and views that the next move will only come after April.

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**Blue Chip Economic Indicators**
Delving into the latest Blue Chip survey results, chart 5 summarizes panellists’ expectations for growth and inflation this year. Focusing on major Asian economies, and as in 2025, India is seen to be leading the pack in terms of both real GDP growth and CPI inflation. That said, the inflation outlook may be subject to further revisions should India’s currently muted inflation—driven by falling food prices—persist for longer. For China, panellists currently expect sub-5% growth this year, implying a likely miss should a 5% growth target again be pursued. Inflation in China is once again expected to remain subdued. Japan, meanwhile, is forecast to post sub-1% real GDP growth, while CPI inflation is expected to hover around the authorities’ preferred 2% level. Looking ahead, attention will also turn to the IMF’s upcoming World Economic Outlook forecasts, due later this month.

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**Southeast Asia**
Last but not least, turning to Southeast Asia, promising AI- and tech-related growth continues in economies such as Malaysia and Vietnam. However, pockets of geopolitical tension persist, notably between Thailand and Cambodia, where border clashes have occurred despite previous attempts at peace, including one co-brokered by US President Trump. Against this backdrop, Thailand’s Prime Minister Anutin is preparing for snap elections in early February, amid a reported rise in nationalist sentiment linked to the ongoing clashes. These developments create latent risks for both Thailand and Cambodia (chart 6), while the uncertainty surrounding the elections also clouds the implementation of longer-term policies aimed at addressing Thailand’s deeper structural challenges.