Tom Moeller

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225d.jpg" style="width: 353px; height: 265px;" align="right">Snowstorms
in the eastern half and the southern regions of the country helped
prompt a jump in unemployment insurance claims. Today's Labor
Department report indicated that initial claims for jobless insurance
increased&nbsp; 22,000 last week to 496,000. The rise followed
strong weekly gains during both January and February which raised the
level to its highest since early-November. Nevertheless claims remained
down from the recession peak of 674,000 hit last March and claims
remained near the lowest level since January 2009. The weekly rise in
claims contrasted with Consensus expectations for a decline to 460,000.
The four-week moving average of initial claims rose to 473,750 and
remained just above the cycle low.Continuing claims for unemployment
insurance during the latest week rose slightly from the cycle-low and
were down by one-third since late-June. Continuing claims were at the
lowest level since early-January of last year. 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 4,585,750. This
series dates back to 1966.&nbsp;&nbsp;Extended benefits for
unemployment insurance fell to another cycle low of 203,612. They were
down by two-thirds from a peak of 597,688 reached in
November.&nbsp;· The insured rate of unemployment remained stable
for the fifth week at a low of 3.5%. The rate reached a high of 5.2%
during late-June. During the last ten years, there has been a 93%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.&nbsp; The highest insured unemployment rates in the
week ending February 6 were in Alaska (7.5 percent), Oregon (6.5),
Idaho (6.4), Montana (6.2), Wisconsin (6.2), Michigan (5.9), Puerto
Rico (5.9), Nevada (5.8), Pennsylvania (5.7), and North Carolina (5.5).
The lowest insured unemployment rates were in Virginia (2.3), Texas
(2.5), Florida (3.4), Maryland (3.4), Mississippi (3.6), Wyoming (3.7),
Ohio (3.9), Indiana (4.0), New York (4.1) and Maine (4.5). 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.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225e.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225f.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" style="color: black;">Unemployment Insurance (000s)</a></th>
<th scope="col">2/20/10</th>
<th scope="col">2/13/10</th>
<th scope="col">2/6/10</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>496</td>
<td>474</td>
<td>442</td>
<td>-24.4%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,617</td>
<td>4,611</td>
<td>-8.8%</td>
<td>5,835</td>
<td>3,345</td>
<td>2,552</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.5</td>
<td>3.5</td>
<td>3.8 (2/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

Snowstorms in the eastern half and the southern regions of the country helped prompt a jump in unemployment insurance claims. Today's Labor Department report indicated that initial claims for jobless insurance increased 22,000 last [...]

U.S. Initial Unemployment Insurance Claims Jump With Poor Weather

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225a.jpg" style="width: 353px; height: 265px;" align="right">Improvement
in the factory sector looked material last month. The overall level of
durable goods orders jumped 3.0%, that followed an upwardly revised
1.9% December increase and it far outpaced Consensus expectations for a
1.5% gain. Unfortunately, the strength was limited. Orders for
nondefense aircraft &amp; parts more than doubled and mostly
recouped sharp declines during the prior two months.&nbsp;
 Regardless of
the January overstatement from the aircraft sector, the durable factory
goods sector appeared on the mend after last year's recession. Less the
transportation sector, orders slipped 0.6% though that followed two
strong 2.0% monthly increases. That was enough to lift the y/y gain in
orders to 8.6%. This strength suggests further improvement in shipments
and industrial output are on the come after the modest y/y gains
already logged.· Transportation sector orders last month were lifted by
the jump in nondefense aircraft as well as by an 11.6% (66.4% y/y) rise
in defense sector bookings. Orders for motor vehicles slipped m/m but
were up modestly from last year. That increase followed annual declines
during each of the last four years which left orders nearly half of
their 2006 level
Improvement in other sectors continued last month.
Primary metals orders increased 1.9% (31.6% y/y) following even
stronger gains during each of the prior four months. Electrical
equipment orders also rose 1.4% (3.8% y/y) while orders for computers
&amp; related equipment jumped 4.6% (16.0% y/y). Only machinery
orders lagged with a 9.7% decline (+8.9% y/y) but that followed sharp
increases during three of the prior four months.&nbsp;
Shipments
of durable goods slipped 0.2% (+1.7% y/y) during January following
increases during the prior four months. The increase was led by an 8.5%
jump (14.0% y/y) in shipments of computers &amp; electronic
products but that was offset by declines in shipments of nondefense
capital goods (-3.2% y/y), machinery (-7.9% y/y) and electrical
equipment (-2.2% y/y). Nevertheless, these negative y/y changes were
much-reduced from those during the recession.
 Perhaps the factory
sector's inventory retrenchment is winding down, but it's not over.
Durable goods inventories slipped just modestly during January (-10.6%
y/y) as they did during the prior two months. However, these followed
very sharp declines through September. Overall, since the December 2008
peak, inventories have fallen 11.7%.
The durable goods figures are
available in Haver's USECON database.
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225c.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/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification
</a>(%)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</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">Durable Goods Orders</td>
<td>3.0</td>
<td>1.9</td>
<td>-0.4</td>
<td>10.2</td>
<td>-19.8</td>
<td>-6.0</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>-0.6</td>
<td>2.0</td>
<td>2.0</td>
<td>8.6</td>
<td>-17.3</td>
<td>-1.4</td>
<td>-0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>4.7</td>
<td>2.5</td>
<td>-3.0</td>
<td>15.9</td>
<td>-23.9</td>
<td>-7.0</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.9</td>
<td>3.3</td>
<td>3.2</td>
<td>10.7</td>
<td>-18.2</td>
<td>-0.5</td>
<td>-2.7</td>
</tr>
</tbody>
</table>


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Improvement in the factory sector looked material last month. The overall level of durable goods orders jumped 3.0%, that followed an upwardly revised 1.9% December increase and it far outpaced Consensus expectations for a 1.5% gain. [...]

U.S. Durable Goods Orders Surge Due To Aircraft

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225a.jpg" style="width: 353px; height: 265px;" align="right">Improvement
in the factory sector looked material last month. The overall level of
durable goods orders jumped 3.0%, that followed an upwardly revised
1.9% December increase and it far outpaced Consensus expectations for a
1.5% gain. Unfortunately, the strength was limited. Orders for
nondefense aircraft &amp; parts more than doubled and mostly
recouped sharp declines during the prior two months.&nbsp;
 Regardless of
the January overstatement from the aircraft sector, the durable factory
goods sector appeared on the mend after last year's recession. Less the
transportation sector, orders slipped 0.6% though that followed two
strong 2.0% monthly increases. That was enough to lift the y/y gain in
orders to 8.6%. This strength suggests further improvement in shipments
and industrial output are on the come after the modest y/y gains
already logged.· Transportation sector orders last month were lifted by
the jump in nondefense aircraft as well as by an 11.6% (66.4% y/y) rise
in defense sector bookings. Orders for motor vehicles slipped m/m but
were up modestly from last year. That increase followed annual declines
during each of the last four years which left orders nearly half of
their 2006 level
Improvement in other sectors continued last month.
Primary metals orders increased 1.9% (31.6% y/y) following even
stronger gains during each of the prior four months. Electrical
equipment orders also rose 1.4% (3.8% y/y) while orders for computers
&amp; related equipment jumped 4.6% (16.0% y/y). Only machinery
orders lagged with a 9.7% decline (+8.9% y/y) but that followed sharp
increases during three of the prior four months.&nbsp;
Shipments
of durable goods slipped 0.2% (+1.7% y/y) during January following
increases during the prior four months. The increase was led by an 8.5%
jump (14.0% y/y) in shipments of computers &amp; electronic
products but that was offset by declines in shipments of nondefense
capital goods (-3.2% y/y), machinery (-7.9% y/y) and electrical
equipment (-2.2% y/y). Nevertheless, these negative y/y changes were
much-reduced from those during the recession.
 Perhaps the factory
sector's inventory retrenchment is winding down, but it's not over.
Durable goods inventories slipped just modestly during January (-10.6%
y/y) as they did during the prior two months. However, these followed
very sharp declines through September. Overall, since the December 2008
peak, inventories have fallen 11.7%.
The durable goods figures are
available in Haver's USECON database.
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225c.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/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS
Classification
</a>(%)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</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">Durable Goods Orders</td>
<td>3.0</td>
<td>1.9</td>
<td>-0.4</td>
<td>10.2</td>
<td>-19.8</td>
<td>-6.0</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>-0.6</td>
<td>2.0</td>
<td>2.0</td>
<td>8.6</td>
<td>-17.3</td>
<td>-1.4</td>
<td>-0.3</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>4.7</td>
<td>2.5</td>
<td>-3.0</td>
<td>15.9</td>
<td>-23.9</td>
<td>-7.0</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-2.9</td>
<td>3.3</td>
<td>3.2</td>
<td>10.7</td>
<td>-18.2</td>
<td>-0.5</td>
<td>-2.7</td>
</tr>
</tbody>
</table>


U.S. Initial Unemployment
Insurance Claims Jump With Poor Weather 
by <a href="/comment/Moeller.html">Tom
Moeller</a> February 25, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225d.jpg" style="width: 353px; height: 265px;" align="right">Snowstorms
in the eastern half and the southern regions of the country helped
prompt a jump in unemployment insurance claims. Today's Labor
Department report indicated that initial claims for jobless insurance
increased&nbsp; 22,000 last week to 496,000. The rise followed
strong weekly gains during both January and February which raised the
level to its highest since early-November. Nevertheless claims remained
down from the recession peak of 674,000 hit last March and claims
remained near the lowest level since January 2009. The weekly rise in
claims contrasted with Consensus expectations for a decline to 460,000.
The four-week moving average of initial claims rose to 473,750 and
remained just above the cycle low.
Continuing claims for unemployment
insurance during the latest week rose slightly from the cycle-low and
were down by one-third since late-June. Continuing claims were at the
lowest level since early-January of last year. 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 4,585,750. This
series dates back to 1966.&nbsp;
&nbsp;Extended benefits for
unemployment insurance fell to another cycle low of 203,612. They were
down by two-thirds from a peak of 597,688 reached in
November.&nbsp;· The insured rate of unemployment remained stable
for the fifth week at a low of 3.5%. The rate reached a high of 5.2%
during late-June. During the last ten years, there has been a 93%
correlation between the level of the insured unemployment rate and the
overall rate of unemployment published by the Bureau of Labor
Statistics.&nbsp;
 The highest insured unemployment rates in the
week ending February 6 were in Alaska (7.5 percent), Oregon (6.5),
Idaho (6.4), Montana (6.2), Wisconsin (6.2), Michigan (5.9), Puerto
Rico (5.9), Nevada (5.8), Pennsylvania (5.7), and North Carolina (5.5).
The lowest insured unemployment rates were in Virginia (2.3), Texas
(2.5), Florida (3.4), Maryland (3.4), Mississippi (3.6), Wyoming (3.7),
Ohio (3.9), Indiana (4.0), New York (4.1) and Maine (4.5). 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.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225e.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225f.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" style="color: black;">Unemployment Insurance (000s)</a></th>
<th scope="col">2/20/10</th>
<th scope="col">2/13/10</th>
<th scope="col">2/6/10</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>496</td>
<td>474</td>
<td>442</td>
<td>-24.4%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,617</td>
<td>4,611</td>
<td>-8.8%</td>
<td>5,835</td>
<td>3,345</td>
<td>2,552</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.5</td>
<td>3.5</td>
<td>3.8 (2/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>

A Pause And Backtrack In EU/EMU
Growth In February 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 25, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100225g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Manufacturing orders are up by 0.8% in December but the
sequential growth rates do not show that the growth of orders continues
to accelerate. MFG sales are also slowing as capital goods and
intermediate goods sales rates over three-months are weaker than sales
rates for six months
The overall EU index of confidence rose in February but the
EMU index edged lower. Among the largest EU/EMU nations France and
Italy saw declines. Germany posted a gain of 0.9% in the month while
Spain&#8216;s index advanced by 1.2%. The UK saw confidence edge up by a tiny
0.1%.
The overall EMU confidence measure stands in the 62nd
percentile of its range but if we position it by queue among past
values it stands in the bottom third among all confidence measures
since 1989. Oddly the strongest relative standing of any sector is by
retailing which is in the 64th percentile of its range and in the 57th
percentile of its queue. The industrial sector and consumer confidence
in their respective 50th to 55th range percentiles and in their
respective 29th to 34th queue percentiles. The service sector stands
just below its range mid point in its 49th percentile but sags back to
a 23rd percentile standing in its queue
The difference between the range and queue percentiles tells
us something about the density of the distribution of values for these
readings. The queue percentile gives us a good fix on where the index
stands compared to where it has been historically since a queue
standing of 54% says that the indicator is weaker than this 54 percent
of the time and stronger only 46 percent of the time.
The range standing simply positions the current reading
between the best and worst readings in some historic span (since 1989).
For now the range readings are higher than the queue readings because
the current levels are elevated substantially from recession lows and
the lows skew the range. But compared to the full spectrum of readings
the current levels are not yet higher than they have been on average
except for retailing (in the 57th percentile of its queue). So Europe
is still lagging in its recovery. It is well short of getting back to
neutral even though the recovery has slowed and this month has brought
slippage to the EMU reading.
All the large countries continued to show overall sentiment
readings that are below their queue midpoints, although four exceed
their range midpoints. The highest queue standing is oddly and
surprisingly in Italy with confidence in the 44th percentile of its
queue followed by Germany, France and the UK all of which are in the
37th percentile of their respective queues. Spain is in the 16th
percentile; EMU is in the 26th percentile.
So EMU is better than this nearly 75% of the time and this is
after a 10 straight monthly rises in sentiment. That metric should stop
you in your tracks. Even though the overall EMU reading stands in the
55th percentile between its worst and best readings, the &#8216;queue
standing&#8217; is just above the lower quartile. In addition to this Europe
has big problems with Greece. You can see the dour mood in Spain with
its 19% unemployment rate and then there is beleaguered Portugal. The
ECB is on the cusp of new leadership &#8211; who will that be? Will it
inspire stability? Will it be a tough inflexible guy like Weber from
the Bundesbank or someone else? Europe is just a series of question
marks. And if it backslides who does the US export to? The US has
emerging troubles of its own
Welcome to 2010.

 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col></colgroup>
<thead><tr>
<th colspan="13" scope="col"> EU
Sectors and Country level Overall Sentiment</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">EU</td>
<td>Feb 
10</td>
<td>Jan 
10</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>%tile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
<td>By Queue 
Rank%</td>
<td>Average 
Level</td>
</tr>
<tr>
<td class="firstcol">Overall Index</td>
<td>97.4</td>
<td>97.2</td>
<td>95</td>
<td>91.5</td>
<td>62.4</td>
<td>166</td>
<td>115</td>
<td>68</td>
<td>47</td>
<td>100</td>
<td>33.9%</td>
<td>100.5</td>
</tr>
<tr>
<td class="firstcol">Industrial</td>
<td>-13</td>
<td>-13</td>
<td>-16</td>
<td>-19</td>
<td>56.5</td>
<td>178</td>
<td>7</td>
<td>-39</td>
<td>46</td>
<td>-8</td>
<td>29.1%</td>
<td>-7.8</td>
</tr>
<tr>
<td class="firstcol">Consumer Confid</td>
<td>-14</td>
<td>-13</td>
<td>-14</td>
<td>-15</td>
<td>52.9</td>
<td>165</td>
<td>2</td>
<td>-32</td>
<td>34</td>
<td>-11</td>
<td>34.3%</td>
<td>-11.1</td>
</tr>
<tr>
<td class="firstcol">Retail</td>
<td>-5</td>
<td>-3</td>
<td>-6</td>
<td>-6</td>
<td>64.5</td>
<td>108</td>
<td>6</td>
<td>-25</td>
<td>31</td>
<td>-6</td>
<td>57.0%</td>
<td>-5.7</td>
</tr>
<tr>
<td class="firstcol">Construction</td>
<td>-32</td>
<td>-34</td>
<td>-33</td>
<td>-32</td>
<td>21.7</td>
<td>203</td>
<td>4</td>
<td>-42</td>
<td>46</td>
<td>-17</td>
<td>19.1%</td>
<td>-17.1</td>
</tr>
<tr>
<td class="firstcol">Services</td>
<td>0</td>
<td>-2</td>
<td>-2</td>
<td>-9</td>
<td>49.2</td>
<td>123</td>
<td>32</td>
<td>-31</td>
<td>63</td>
<td>13</td>
<td>23.1%</td>
<td>12.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">% m/m</td>
<td>Feb 
10</td>
<td colspan="2">Based on Level</td>
<td colspan="4">Level</td>
<td colspan="2">&nbsp;&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; &nbsp;EMU</td>
<td>-0.1%</td>
<td>2.0%</td>
<td>2.4%</td>
<td>95.9</td>
<td>55.4</td>
<td>185</td>
<td>116</td>
<td>71</td>
<td>46</td>
<td>100</td>
<td>26.3%</td>
<td>100.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Germany</td>
<td>0.9%</td>
<td>0.6%</td>
<td>1.6%</td>
<td>97.0</td>
<td>47.8</td>
<td>158</td>
<td>121</td>
<td>75</td>
<td>46</td>
<td>101</td>
<td>37.1%</td>
<td>100.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; France</td>
<td>-1.9%</td>
<td>1.7%</td>
<td>4.1%</td>
<td>98.4</td>
<td>54.4</td>
<td>157</td>
<td>119</td>
<td>74</td>
<td>44</td>
<td>100</td>
<td>37.5%</td>
<td>100.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Italy</td>
<td>-1.7%</td>
<td>4.3%</td>
<td>2.6%</td>
<td>99.7</td>
<td>58.6</td>
<td>139</td>
<td>120</td>
<td>71</td>
<td>50</td>
<td>100</td>
<td>44.6%</td>
<td>100.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Spain</td>
<td>1.2%</td>
<td>0.3%</td>
<td>1.3%</td>
<td>90.1</td>
<td>41.2</td>
<td>210</td>
<td>116</td>
<td>72</td>
<td>44</td>
<td>100</td>
<td>16.3%</td>
<td>100.2</td>
</tr>
<tr>
<td class="firstcol">Memo:UK</td>
<td>0.1%</td>
<td>3.4%</td>
<td>6.9%</td>
<td>98.3</td>
<td>66.1</td>
<td>158</td>
<td>115</td>
<td>65</td>
<td>50</td>
<td>100</td>
<td>37.1%</td>
<td>100.2</td>
</tr>
<tr>
<td colspan="2">All since Feb 1989</td>
<td colspan="2">251</td>
<td colspan="2">-Count</td>
<td colspan="2">Services:</td>
<td></td>
<td>160</td>
<td>-Count</td>
<td></td>
<td></td>
</tr>
<tr>
<td colspan="11" class="firstcol">Sentiment
is an index,
sector readings are net balance diffusion measures</td>
<td></td>
<td></td>
</tr>
</tbody>
</table>
</body></html>

U.S. Durable Goods Orders SurgeDue To Aircraft

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Manufacturing orders are up by 0.8% in December but the
sequential growth rates do not show that the growth of orders continues
to accelerate. MFG sales are also slowing as capital goods and
intermediate goods sales rates over three-months are weaker than sales
rates for six months
In December domestic orders have been especially strong rising
by 6.1% while foreign orders advanced by 2.2%. But over three months
Domestic orders are up at just a 0.8% rate while foreign orders are up
at an 11.9% pace. The pattern of growth rates in the chart shows us
that domestic and foreign growth rates peaked about six months ago and
have since been slowing down even though they continue to grow. This is
one reason for concern about whether the recovery is building momentum
or not.
Among large EU/EMU countries Italy and the UK are
demonstrating still accelerating orders from 12-months to six months
and again from six months to the three-month horizon. In France orders
accelerated in six months compared to 12-months and have stayed near
that mark for 3-month growth rates. Germany shows a decided
deceleration with growth rates rising in six-months compared to
12-months then submerging and going negative for the recent three-month
period. Still the Yr/Yr growth rates moved sharply higher in December
compared to November everywhere but in the UK. But the sequential
growth rates do give more of an up-close view of growth and on that
basis momentum truly is fading.
Obviously the various EU/EMU countries have some differences.
But the overriding message is that orders growth is slowing. It is
still positive but it is slowing. Europe now will be burdened with the
growing and festering problems of Greece and possibly other debt
ladened e-Zone members. The European consumer does not seem to have
gotten in gear. The recent German IFO survey was weak but it may have
been impacted by weather. We are always on a bit of a weather watch at
this time of year. But apart from weather there are ample trends that
tell us to be cautious about depending on the European recovery being
too strong.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col">Selected Euro-Area and UK Industrial Orders </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Dec 09</td>
<td>Nov 09</td>
<td>Dec 09</td>
<td>Nov 09</td>
<td>Dec 09</td>
<td>Nov 09</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro-Area Detail</td>
<td>Dec 09</td>
<td>Nov 09</td>
<td>Oct 09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
</tr>
<tr>
<td class="firstcol">MFG
Orders</td>
<td>0.8%</td>
<td>2.7%</td>
<td>-2.1%</td>
<td>5.6%</td>
<td>9.2%</td>
<td>16.9%</td>
<td>21.5%</td>
<td>9.5%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">MFG Sales</td>
<td>-0.4%</td>
<td>1.4%</td>
<td>0.4%</td>
<td>6.1%</td>
<td>4.3%</td>
<td>8.8%</td>
<td>7.9%</td>
<td>-2.8%</td>
<td>-9.2%</td>
</tr>
<tr>
<td class="firstcol">
Consumer</td>
<td>0.7%</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>6.1%</td>
<td>-3.4%</td>
<td>3.7%</td>
<td>-0.4%</td>
<td>-2.6%</td>
<td>-5.3%</td>
</tr>
<tr>
<td class="firstcol">
Capital</td>
<td>-1.9%</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>-7.2%</td>
<td>6.4%</td>
<td>5.1%</td>
<td>5.8%</td>
<td>-5.7%</td>
<td>-10.3%</td>
</tr>
<tr>
<td class="firstcol">
Intermediate</td>
<td>6.1%</td>
<td>1.3%</td>
<td>-6.8%</td>
<td>0.8%</td>
<td>4.1%</td>
<td>18.6%</td>
<td>20.0%</td>
<td>7.7%</td>
<td>-1.1%</td>
</tr>
<tr class="odd">
<td colspan="10" class="firstcol">Memo:MFG</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>0.8%</td>
<td>2.7%</td>
<td>-2.1%</td>
<td>5.6%</td>
<td>9.2%</td>
<td>16.9%</td>
<td>21.5%</td>
<td>9.5%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">E-13
Domestic MFG orders</td>
<td>6.1%</td>
<td>1.3%</td>
<td>-6.8%</td>
<td>0.8%</td>
<td>4.1%</td>
<td>18.6%</td>
<td>20.0%</td>
<td>7.7%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">E-13
Foreign MFG orders</td>
<td>2.2%</td>
<td>3.0%</td>
<td>-2.3%</td>
<td>11.9%</td>
<td>35.2%</td>
<td>20.8%</td>
<td>34.2%</td>
<td>10.0%</td>
<td>0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Countries:</td>
<td>Dec09</td>
<td>Nov09</td>
<td>Oct09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
</tr>
<tr>
<td class="firstcol">Germany
(MFG):</td>
<td>-1.8%</td>
<td>3.2%</td>
<td>-2.1%</td>
<td>-3.4%</td>
<td>9.9%</td>
<td>10.3%</td>
<td>23.7%</td>
<td>4.2%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">France(Ind):</td>
<td>17.1%</td>
<td>0.5%</td>
<td>-8.2%</td>
<td>36.4%</td>
<td>-7.3%</td>
<td>40.5%</td>
<td>4.5%</td>
<td>15.5%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">Italy
(Ind):</td>
<td>4.7%</td>
<td>2.9%</td>
<td>0.7%</td>
<td>38.5%</td>
<td>47.6%</td>
<td>18.5%</td>
<td>15.4%</td>
<td>5.3%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">UK
(Engineering Industy):</td>
<td>8.5%</td>
<td>-15.6%</td>
<td>14.1%</td>
<td>19.1%</td>
<td>-18.1%</td>
<td>7.1%</td>
<td>-9.9%</td>
<td>-16.2%</td>
<td>-3.8%</td>
</tr>
</tbody>
</table>
</body></html>

Manufacturing orders are up by 0.8% in December but the sequential growth rates do not show that the growth of orders continues to accelerate. MFG sales are also slowing as capital goods and intermediate goods sales rates over three- [...]

Orders Continue In Their Upswing

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224c.jpg" style="width: 353px; height: 265px;" align="right">
The housing
market's upturn increasingly looks to have lost steam. The Mortgage
Bankers Association reported that mortgage applications slipped 8.5%
last week for the third week consecutive weekly decline. Nevertheless,
it's not all bad news since a late-January jump in applications was not
wholly unwound. The February average of applications still is up 8.8%
from January.&nbsp;&nbsp; &nbsp;For last week,
applications to refinance mortgages fell 8.9% and
applications to purchase a home fell 7.3%, the
third down week. Overall, there has been a downtrend in purchase
applications despite an uplift provided by an up-to $8,000 Federal tax
credit for first-time homebuyers. 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.The effective fixed interest rate
on conventional 15-year mortgages moved higher again to 4.68%. For the
month overall rates have been near the six year low. For 30-year
mortgages the rate also ticked up to 5.30% from a November average of
5.06%. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224d.jpg" style="width: 353px; height: 265px;" align="right">
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 fell to 6.64% last week from a November average of
6.81%.&nbsp;The Mortgage Bankers Association surveys
between 20 to 35 of the top lenders in the U.S. housing industry to
derive its refinance, purchase and market indexes. The weekly survey
covers roughly 50% of all U.S. residential mortgage applications
processed each week by mortgage banks, commercial banks and thrifts.
Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.&nbsp;The figures for weekly
mortgage applications are available in Haver's SURVEYW
database.
<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;">MBA Mortgage Applications
(SA, 3/16/90=100)</a></th>
<th scope="col">02/19/10</th>
<th scope="col">02/12/10</th>
<th scope="col">02/05/10</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">Total Market Index</td>
<td>549.5</td>
<td>600.5</td>
<td>613.1</td>
<td>-26.1%</td>
<td>736.4</td>
<td>642.9</td>
<td>652.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>196.8</td>
<td>212.3</td>
<td>221.2</td>
<td>-21.4</td>
<td>263.5</td>
<td>345.4</td>
<td>424.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,605.3</td>
<td>2,860.1</td>
<td>2,893.9</td>
<td>-28.0</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>4.68</td>
<td>4.59</td>
<td>4.57</td>
<td>5.07 (02/09)</td>
<td>4.85</td>
<td>5.9</td>
<td>6.2</td>
</tr>
</tbody>
</table>
</body></html>

The housing market's upturn increasingly looks to have lost steam. The Mortgage Bankers Association reported that mortgage applications slipped 8.5% last week for the third week consecutive weekly decline. Nevertheless, it's not all [...]

U.S. Weekly Mortgage Applications Slip Again

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224a.jpg" style="width: 353px; height: 265px;" align="right">Whether
record snowfall this season hurt housing activity is tough to say. This
morning's report that new home sales fell 11.2% from December to
309,000 (AR) following that month's moderate decline suggests that it
did, but January single-family housing starts were reported last week
to have risen. Perhaps builders have thicker skin than buyers? It
remains to be seen. Nevertheless, January sales fell well short of
Consensus expectations for 355,000 and reached a record low for the
series which dates back to 1963.&nbsp;
 The one-third m/m drop in
home sales in the Northeast certainly suggests a strong weather factor
after they rose sharply during December. Conversely, Mid-West sales
rose 2.1% following their sharp December decline. In the West, sales
drifted lower and neared their record low while sales in the South fell
for the fifth month in the last six.<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224b.jpg" style="width: 353px; height: 265px;" align="right">
Home prices
also were quite weak last month posting a 5.6% decline from December to
$203,500. Prices fell 2.4% during the last twelve months to the lowest
level since late-2003. Since the 2007 peak prices have fallen
22.5%.
Price discounts had been lowering the inventory of
unsold homes, but weakness in sales and stable starts recently have
lifted the inventory to&nbsp;&nbsp; its highest level since
May. The months' supply of unsold homes also has increased to 11.1
months from its July low of 7.2 months though that remained down from
the high of 12.4 months in January '09. Despite the shrinkage of
inventory, it still took a record median 13.9 months to sell a new home
as of December.
Fed Chairman Ben S. Bernanke's Semiannual
Monetary Policy Report to the Congress can be found <a href="http://www.federalreserve.gov/newsevents/testimony/bernanke20100224a.htm">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">US
New Homes</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</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">Total Sales
(SAAR, 000s)</td>
<td>309</td>
<td>348</td>
<td>362</td>
<td>-6.1%</td>
<td>372</td>
<td>481</td>
<td>769</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>24</td>
<td>37</td>
<td>30</td>
<td>-20.0</td>
<td>31</td>
<td>35</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>49</td>
<td>48</td>
<td>68</td>
<td>-7.5</td>
<td>54</td>
<td>69</td>
<td>118</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>162</td>
<td>179</td>
<td>187</td>
<td>-10.5</td>
<td>201</td>
<td>264</td>
<td>409</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>74</td>
<td>84</td>
<td>77</td>
<td>13.8</td>
<td>87</td>
<td>113</td>
<td>178</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>203,500</td>
<td>215,600</td>
<td>219,100</td>
<td>&nbsp;-2.4</td>
<td>213,567</td>
<td>230,408</td>
<td>243,742</td>
</tr>
</tbody>
</table>

</body></html>

Whether record snowfall this season hurt housing activity is tough to say. This morning's report that new home sales fell 11.2% from December to 309,000 (AR) following that month's moderate decline suggests that it did, but January [...]

U.S. New Home Sales Plumb Record Low, Weather or Not?

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224a.jpg" style="width: 353px; height: 265px;" align="right">Whether
record snowfall this season hurt housing activity is tough to say. This
morning's report that new home sales fell 11.2% from December to
309,000 (AR) following that month's moderate decline suggests that it
did, but January single-family housing starts were reported last week
to have risen. Perhaps builders have thicker skin than buyers? It
remains to be seen. Nevertheless, January sales fell well short of
Consensus expectations for 355,000 and reached a record low for the
series which dates back to 1963.&nbsp;
 The one-third m/m drop in
home sales in the Northeast certainly suggests a strong weather factor
after they rose sharply during December. Conversely, Mid-West sales
rose 2.1% following their sharp December decline. In the West, sales
drifted lower and neared their record low while sales in the South fell
for the fifth month in the last six.
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224b.jpg" style="width: 353px; height: 265px;" align="right">Home
prices
also were quite weak last month posting a 5.6% decline from December to
$203,500. Prices fell 2.4% during the last twelve months to the lowest
level since late-2003. Since the 2007 peak prices have fallen
22.5%.
Price discounts had been lowering the inventory of
unsold homes, but weakness in sales and stable starts recently have
lifted the inventory to&nbsp;&nbsp; its highest level since
May. The months' supply of unsold homes also has increased to 11.1
months from its July low of 7.2 months though that remained down from
the high of 12.4 months in January '09. Despite the shrinkage of
inventory, it still took a record median 13.9 months to sell a new home
as of December.
Fed Chairman Ben S. Bernanke's Semiannual
Monetary Policy Report to the Congress can be found <a href="http://www.federalreserve.gov/newsevents/testimony/bernanke20100224a.htm">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">US
New Homes</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</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">Total Sales
(SAAR, 000s)</td>
<td>309</td>
<td>348</td>
<td>362</td>
<td>-6.1%</td>
<td>372</td>
<td>481</td>
<td>769</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>24</td>
<td>37</td>
<td>30</td>
<td>-20.0</td>
<td>31</td>
<td>35</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>49</td>
<td>48</td>
<td>68</td>
<td>-7.5</td>
<td>54</td>
<td>69</td>
<td>118</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>162</td>
<td>179</td>
<td>187</td>
<td>-10.5</td>
<td>201</td>
<td>264</td>
<td>409</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>74</td>
<td>84</td>
<td>77</td>
<td>13.8</td>
<td>87</td>
<td>113</td>
<td>178</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>203,500</td>
<td>215,600</td>
<td>219,100</td>
<td>&nbsp;-2.4</td>
<td>213,567</td>
<td>230,408</td>
<td>243,742</td>
</tr>
</tbody>
</table>

U.S. Weekly Mortgage Applications
Slip Again 
by <a href="/comment/Moeller.html">Tom
Moeller</a> February 24, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224c.jpg" style="width: 353px; height: 265px;" align="right">The
housing
market's upturn increasingly looks to have lost steam. The Mortgage
Bankers Association reported that mortgage applications slipped 8.5%
last week for the third week consecutive weekly decline. Nevertheless,
it's not all bad news since a late-January jump in applications was not
wholly unwound. The February average of applications still is up 8.8%
from January.&nbsp;&nbsp; &nbsp;
For last week,
applications to refinance mortgages fell 8.9% and
applications to purchase a home fell 7.3%, the
third down week. Overall, there has been a downtrend in purchase
applications despite an uplift provided by an up-to $8,000 Federal tax
credit for first-time homebuyers. 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.
The effective fixed interest rate
on conventional 15-year mortgages moved higher again to 4.68%. For the
month overall rates have been near the six year low. For 30-year
mortgages the rate also ticked up to 5.30% from a November average of
5.06%. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224d.jpg" style="width: 353px; height: 265px;" align="right">
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 fell to 6.64% last week from a November average of
6.81%.&nbsp;
The Mortgage Bankers Association surveys
between 20 to 35 of the top lenders in the U.S. housing industry to
derive its refinance, purchase and market indexes. The weekly survey
covers roughly 50% of all U.S. residential mortgage applications
processed each week by mortgage banks, commercial banks and thrifts.
Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.&nbsp;The figures for weekly
mortgage applications are available in Haver's SURVEYW
database.
<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;">MBA Mortgage Applications
(SA, 3/16/90=100)</a></th>
<th scope="col">02/19/10</th>
<th scope="col">02/12/10</th>
<th scope="col">02/05/10</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">Total Market Index</td>
<td>549.5</td>
<td>600.5</td>
<td>613.1</td>
<td>-26.1%</td>
<td>736.4</td>
<td>642.9</td>
<td>652.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>196.8</td>
<td>212.3</td>
<td>221.2</td>
<td>-21.4</td>
<td>263.5</td>
<td>345.4</td>
<td>424.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,605.3</td>
<td>2,860.1</td>
<td>2,893.9</td>
<td>-28.0</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>4.68</td>
<td>4.59</td>
<td>4.57</td>
<td>5.07 (02/09)</td>
<td>4.85</td>
<td>5.9</td>
<td>6.2</td>
</tr>
</tbody>
</table>

Orders Continue In Their Upswing 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 24, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100224e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Manufacturing orders are up by 0.8% in December but the
sequential growth rates do not show that the growth of orders continues
to accelerate. MFG sales are also slowing as capital goods and
intermediate goods sales rates over three-months are weaker than sales
rates for six months
In December domestic orders have been especially strong rising
by 6.1% while foreign orders advanced by 2.2%. But over three months
Domestic orders are up at just a 0.8% rate while foreign orders are up
at an 11.9% pace. The pattern of growth rates in the chart shows us
that domestic and foreign growth rates peaked about six months ago and
have since been slowing down even though they continue to grow. This is
one reason for concern about whether the recovery is building momentum
or not.
Among large EU/EMU countries Italy and the UK are
demonstrating still accelerating orders from 12-months to six months
and again from six months to the three-month horizon. In France orders
accelerated in six months compared to 12-months and have stayed near
that mark for 3-month growth rates. Germany shows a decided
deceleration with growth rates rising in six-months compared to
12-months then submerging and going negative for the recent three-month
period. Still the Yr/Yr growth rates moved sharply higher in December
compared to November everywhere but in the UK. But the sequential
growth rates do give more of an up-close view of growth and on that
basis momentum truly is fading.
Obviously the various EU/EMU countries have some differences.
But the overriding message is that orders growth is slowing. It is
still positive but it is slowing. Europe now will be burdened with the
growing and festering problems of Greece and possibly other debt
ladened e-Zone members. The European consumer does not seem to have
gotten in gear. The recent German IFO survey was weak but it may have
been impacted by weather. We are always on a bit of a weather watch at
this time of year. But apart from weather there are ample trends that
tell us to be cautious about depending on the European recovery being
too strong.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="10" scope="col">Selected Euro-Area
and UK Industrial Orders </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro-Area Detail</td>
<td>Dec 
09</td>
<td>Nov 
09</td>
<td>Oct 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
</tr>
<tr>
<td class="firstcol">MFG
Orders</td>
<td>0.8%</td>
<td>2.7%</td>
<td>-2.1%</td>
<td>5.6%</td>
<td>9.2%</td>
<td>16.9%</td>
<td>21.5%</td>
<td>9.5%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">MFG Sales</td>
<td>-0.4%</td>
<td>1.4%</td>
<td>0.4%</td>
<td>6.1%</td>
<td>4.3%</td>
<td>8.8%</td>
<td>7.9%</td>
<td>-2.8%</td>
<td>-9.2%</td>
</tr>
<tr>
<td class="firstcol">
Consumer</td>
<td>0.7%</td>
<td>1.0%</td>
<td>-0.2%</td>
<td>6.1%</td>
<td>-3.4%</td>
<td>3.7%</td>
<td>-0.4%</td>
<td>-2.6%</td>
<td>-5.3%</td>
</tr>
<tr>
<td class="firstcol">
Capital</td>
<td>-1.9%</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>-7.2%</td>
<td>6.4%</td>
<td>5.1%</td>
<td>5.8%</td>
<td>-5.7%</td>
<td>-10.3%</td>
</tr>
<tr>
<td class="firstcol">
Intermediate</td>
<td>6.1%</td>
<td>1.3%</td>
<td>-6.8%</td>
<td>0.8%</td>
<td>4.1%</td>
<td>18.6%</td>
<td>20.0%</td>
<td>7.7%</td>
<td>-1.1%</td>
</tr>
<tr class="odd">
<td colspan="10" class="firstcol">Memo:MFG</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>0.8%</td>
<td>2.7%</td>
<td>-2.1%</td>
<td>5.6%</td>
<td>9.2%</td>
<td>16.9%</td>
<td>21.5%</td>
<td>9.5%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">E-13
Domestic MFG orders</td>
<td>6.1%</td>
<td>1.3%</td>
<td>-6.8%</td>
<td>0.8%</td>
<td>4.1%</td>
<td>18.6%</td>
<td>20.0%</td>
<td>7.7%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">E-13
Foreign MFG orders</td>
<td>2.2%</td>
<td>3.0%</td>
<td>-2.3%</td>
<td>11.9%</td>
<td>35.2%</td>
<td>20.8%</td>
<td>34.2%</td>
<td>10.0%</td>
<td>0.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Countries:</td>
<td>Dec09</td>
<td>Nov09</td>
<td>Oct09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
</tr>
<tr>
<td class="firstcol">Germany
(MFG):</td>
<td>-1.8%</td>
<td>3.2%</td>
<td>-2.1%</td>
<td>-3.4%</td>
<td>9.9%</td>
<td>10.3%</td>
<td>23.7%</td>
<td>4.2%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">France(Ind):</td>
<td>17.1%</td>
<td>0.5%</td>
<td>-8.2%</td>
<td>36.4%</td>
<td>-7.3%</td>
<td>40.5%</td>
<td>4.5%</td>
<td>15.5%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">Italy
(Ind):</td>
<td>4.7%</td>
<td>2.9%</td>
<td>0.7%</td>
<td>38.5%</td>
<td>47.6%</td>
<td>18.5%</td>
<td>15.4%</td>
<td>5.3%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">UK
(Engineering Industy):</td>
<td>8.5%</td>
<td>-15.6%</td>
<td>14.1%</td>
<td>19.1%</td>
<td>-18.1%</td>
<td>7.1%</td>
<td>-9.9%</td>
<td>-16.2%</td>
<td>-3.8%</td>
</tr>
</tbody>
</table>
</body></html>

U.S. New Home Sales Plumb RecordLow, Weather or Not?

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223h.jpg" style="width: 353px; height: 265px;" align="right">
There was a
slowing of retail sales during December and January. More weakness may
be in the offing given the latest souring of consumers' mood. For
February, the Conference Board reported that consumer confidence fell
18.6% from January and that brought down the level of confidence to its
lowest since last April. Just a modest m/m decline had been the
Consensus expectation for February and during the last ten years there
has been an 83% correlation between the level of consumer confidence
and the y/y change in real consumer spending. The Conference Board data
can be found in Haver's CBDB database.Consumers'
assessment of current economic conditions slumped by nearly one-quarter
m/m. That reversed all of a January increase and left the measure near
the historic low. Jobs were seen as hard to get by 47.7% of respondents
and jobs were seen as plentiful by only 3.6%. That was up just slightly
from the series' historic low. Also at a record low was the percentage
of respondents who saw business conditions as good. The percentage of
consumers who thought business conditions were bad rose to 46.3%, off
somewhat from its peak but nearly the highest since 1983.&nbsp;The expectations component of confidence also fell sharply to its
lowest level since April. Lessened expectations for business
conditions, employment and income have led the latest downdraft.
Expectations for the inflation rate in twelve months held stable at
5.2%, the lowest level since 2007 and down from last year's high of
7.7%. Interest rates in twelve months were expected to be higher by
52.2% of respondents while 14.2% expected rates to fall. A greatly
lessened 28.6% of respondents expected stock prices to rise.
&nbsp;An improved 2.7% of those surveyed plan to buy a home
during the next six months. An increased 27.1% plan to buy a major
appliance versus 30.9% back in 2007. Only 4.8% plan to buy an
automobile versus 6.0% in 2007 and just 1.8% plan to buy a new
one.&nbsp;&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223i.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100223j.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">Conference
Board&nbsp;(SA, 1985=100)</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">December</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">Consumer
Confidence Index</td>
<td>46.0</td>
<td>56.5</td>
<td>53.6</td>
<td>81.8</td>
<td>45.2</td>
<td>57.9</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;
Present Situation</td>
<td>19.4</td>
<td>25.2</td>
<td>20.2</td>
<td>-13.0</td>
<td>24.0</td>
<td>69.9</td>
<td>128.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;
Expectations</td>
<td>63.8</td>
<td>77.3</td>
<td>75.9</td>
<td>133.7</td>
<td>59.3</td>
<td>50.0</td>
<td>86.4</td>
</tr>
</tbody>
</table>
</body></html>

There was a slowing of retail sales during December and January. More weakness may be in the offing given the latest souring of consumers' mood. For February, the Conference Board reported that consumer confidence fell 18.6% from [...]

U.S. Consumer Confidence Falls Sharply

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

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260112E.jpg

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.

260112.jpg

**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.

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Asia

Economic Letter from Asia: A Bumpy Start

Michael J. Moran

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Nonfarm payrolls rose 50,000 in December, continuing a pattern of modest increases that began in early 2025 and intensified last spring. The December results were constrained by an outright decline in the goods-producing sector, with both construction companies and manufacturers shedding workers. The private service sector was in the plus column, but the gain of 58,000 was not especially impressive. The retail trade sector was notably soft (-25,000), and a drop of 9,000 among firms in the business-service area was disappointing.

Revisions to results in October and November were more notable than the new figures for December, as downward adjustments of 76,000 more than offset the gain in December and left a net decline in the fourth quarter. Several areas contributed to the revisions (retail trade, construction, health care, transportation & warehousing, business services).

Not only were the recent job numbers soft, but the average workweek among those employed eased 0.1 hour to 34.2 hours. The reading was still within the range of observations from the past two years, but it moved to the bottom of the range. A dip of 0.1 hour might seem trivial, but when applied to 160 million workers, it represents a constraint on production. This decline added to the soft tone of the report.

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Although the payroll numbers were soft, the unemployment rate dipped 0.1 percentage point to 4.4%. The drop reflected a jump of 232,000 in employment as measured by the survey of households. This employment measure is more volatile than the payroll figures from the survey of business establishments, and thus the gain might contain a healthy dose of random volatility. Still, it offered encouragement in that December marked the fifth consecutive gain, perhaps signaling that the bottom was not falling out of the labor market. 

Average hourly earnings also suggested that the labor market still had a pulse. December showed an increase of 0.3% in average hourly earnings, and results in the prior month were firmer than previously estimated (0.2% growth rather than 0.1%). The underlying trend is still cooling, but the year-over-year advance of 3.8% still represents a gain in real earnings.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

- Modest job growth in December, and downward revisions in October & November.
- The unemployment rate, though, inched lower.

A Soft Tone in the Labor Market

Winnie Tapasanun

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Total housing starts fell 4.6% m/m in October to a seasonally adjusted annual rate of 1.246 million units—below expectations—following a 1.2% increase to 1.306 million in September and a 9.1% drop to 1.291 million in August (-8.5% m/m, 1.307 million previously), data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected 1.321 million starts for October. The October figure marked the lowest level since May 2020 and represented the second m/m decline in three months after m/m increases in July and June. The year-on-year rate was at -7.8% in October, the steepest y/y drop since November 2024, following -3.8% in September and -1.2% in October 2024. Overall, starts remained 31.5% below the April 2022 peak of 1.820 million.

Single-family starts rebounded 5.4% (-7.8% y/y) to 874,000 in October, the highest level since July, after declines of 4.6% to 829,000 in September and 8.6% to 869,000 in August (890,000 previously). They reached a high of 1.218 million in November 2021 and a high of 1.273 in December 2020. Multi-family starts plunged 22.0% (-7.9% y/y) to 372,000, the lowest level since May, following a 13.0% September gain to 477,000 and a 10.0% August drop to 422,000 (417,000 previously). They reached a high of 629,000 units in November 2022 and a high of 616,000 units in April 2022.

By region, housing starts delivered a mixed performance. Starts in the West slumped 21.9% (-25.9% y/y) to 243,000 in October, the lowest level since July, after a 1.6% increase in September. Starts in the Northeast slid 0.6% (+41.3% y/y) to 154,000, the third m/m slide in four months, after a 58.2% September surge. To the upside, starts in the South rebounded 1.2% (-2.1% y/y) to 650,000 in October after a 3.6% decline in September and starts in the Midwest rose 0.5% (-20.7% y/y) to 199,000 after a 10.4% September decrease; for both regions, October represented the first m/m increase since July. Notably, the South continued to lead all regions with 650,000 starts, accounting for 52.2% of total U.S. housing starts; the region previously peaked at 1.044 million in April 2022.

Building permits fell 0.2% (-1.1% y/y) to 1.412 million in October, the sixth m/m fall in seven months, following a 6.4% rise to 1.415 million in September and a 2.3% decline to 1.330 million in August. They remained well below a high of 1.920 million in January 2022 and a high of 1.855 million in January 2021. Single-family permits fell 0.5% (-9.4% y/y) to 876,000, the second m/m fall in three months, after a 2.6% September increase to 880,000. They reached highs of 1.243 million in both January 2022 and January 2021. In contrast, multi-family permits rose 0.2% (16.3% y/y) to 536,000, the highest level since February 2024, after a 13.3% September gain to 535,000. They reached a peak of 817,000 units in February 2023 and a high of 787,000 units in June 2022. Regionally, permits fell m/m in the South (-3.3%; -3.9% y/y), the Midwest (-2.0%; -0.5% y/y), and the Northeast (-1.4%; +5.8% y/y), but increased m/m in the West (+9.1%; +2.1% y/y).

The housing starts and building permits figures can be found in Haver’s **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

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- Housing starts -4.6% (-7.8% y/y) to 1.246 mil. in Oct.; second m/m fall in three months.
- Single-family starts up to a three-month high; multi-family starts down to a five-month low.
- Housing starts m/m down the West and Northeast but up in the South and Midwest.
- Building permits fall for the sixth time in seven months, led by a drop in single-family permits.

U.S. Housing Starts Decline in October; Lowest Level Since May ’20

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German industrial production advanced by 0.8% month-to-month in November performing better than had been expected. Consumer goods output fell by 0.3% month-to-month, capital goods output soared with a 4.9% gain, while intermediate goods output fell back by 0.8%.  

On the whole, manufacturing output had been expected to be weak. But looking at manufacturing alone, rather than total industrial production, the gain was even stronger at 2.1% month-to-month. Real manufacturing orders in November rose by 5.6%, real sales in manufacturing rose by 2.7%. This is solid performance.

**Survey data have been weak and listless**
However, apart from anecdotal evidence, as monthly data unfold, the kinds of numbers that we have to look at first are various economic surveys that come from diffusion data. The ZEW’s current index was slightly stronger month-to-month at a still very weak -78.7 (net) reading compared to -80 in October although both of those were weaker than the ZEW net September reading of -76.4. IFO manufacturing weakened month-to-month in November at 87.1 compared to 88.1 in October and it was slightly weaker than its September value as well. IFO manufacturing expectations slipped to 94.1 in November from 96.9 in October although expectations were slightly higher than their level in September. The EU Commission index weakened in November to -18.9 from -18.1 in October although there was an improvement from -20.1 in September.

These comparisons show us that the survey data which we had in hand before getting the industrial production reading from Germany had given us a lot of weak readings and a lot of very weak momentum.

**Compare survey data to IP data using ranking technique**
We can compare industrial production data to survey data using two different columns in this table. The first is the queue standing column where we see the industrial production data with rankings mostly in their 50th percentile: intermediate goods have a ranking of 37.7% with construction at 33.4%; they are the weaker exceptions. We rank IP data by sector according to their annual growth rates compared to past growth rates.  However, by comparison the survey data (that we rank on levels) range between 12.1% and 29.8%; all of those are very weak readings. No wonder a focus on survey data leads to a weak upcoming assessment of production data. We can also look at a slightly more up-to-date, but shorter ranking, from January 2021. There we see that the industrial production data average rankings from the mid-60th percentile up to the 81.4 percentile for total industrial production. Surveys generally have rankings in the 20th and 30th percentile with the exception of IFO manufacturing expectations which reaches 67.8%, which is a solid reading.

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**Survey data signals should be downgraded?**
These comparisons show us that while it's hard to compare industrial output directly to the diffusion readings if we take those two metrics over the same timeline and compare the level of the diffusion index to the growth rate of the manufacturing index we get the capability to compare the two on more even footing. When we do that, we see that manufacturing data are doing better than the survey data very broadly speaking. So, while there's some surprise on the strength of manufacturing data, maybe we should place a greater emphasis on it because those data come from a real accounting process rather than from a survey process that is much less closely linked to magnitudes. And, essentially, we are really much more interested in magnitudes than just if something is higher and lower.

**Other Europe doing ‘well’, too**
Not so incidentally the industrial production readings for France, Spain, Portugal, and Norway, all of whom are fairly early reporters of industrial production data, rank well on the queue standing column as well as in the shorter rank standing column from January 2021. In fact, for these countries the difference in ranking between the two periods is not markedly different, certainly not as markedly different as it is for Germany. On the whole, it may be that Europe has been doing better than we thought because we've been spending too much time looking at the more up-to-date survey data on a PMI basis, rather than waiting for the more traditional and lagging industrial production reports that are accounting-based data and more thorough.