Tom Moeller

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222a.jpg" style="width: 353px; height: 265px;" align="right">The
U.S.
economy regained forward momentum last month. The January Chicago Fed
National Activity Index (CFNAI) from the Federal Reserve Bank of
Chicago rose to a reading of 0.02 from a little-revised -0.58 in
December. Also pointing toward positive economic growth was the rise
from the series' low of -4.14 reached one year ago. During the last ten
years the has been a 76% correlation between the index level and the
q/q change in real GDP.
The three-month moving average of the
index, which smoothes out some of the series' volatility, also rose to
its highest level since 2007.
 An index level at or below
-0.70 typically has indicated negative U.S. economic growth. A zero
value of the CFNAI indicates that the economy is expanding at its
historical trend rate of growth of roughly 3.0%. The complete CFNAI
report is available <a href="http://www.chicagofed.org/digital_assets/publications/cfnai/2010/cfnai_february2010.pdf">here</a>.
The Chicago Fed indicated that the production &amp; income
series
made the largest positive contribution to the series improvement in
January. Overall, 50 of the 85 individual indicators made positive
contributions to the index while 35 made negative contributions. The
CFNAI is a weighted average of 85 indicators of economic activity. The
indicators reflect activity in the following categories: production
&amp; income, the labor market, personal consumption &amp;
housing, manufacturing &amp; trade sales, and inventories &amp;
orders.· In a separate survey, the Chicago Fed indicated that its
Midwest manufacturing index slipped during December but remained close
to its highest level of the year. Indicators for the auto, steel,
machinery and resource sectors were roughly unchanged. The Chicago
Federal Reserve figures are available in Haver's SURVEYS database.&nbsp;
The
Challenges Ahead is the title of N.Y.
Federal Reserve Bank President William C. Dudley's comments and they
are available&nbsp; <a href="http://www.newyorkfed.org/newsevents/speeches/2010/dud100219.html">here</a>.&nbsp;
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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/SURVEYS/@S5/@S503/@S503.HTM" style="color: white;">Chicago Fed</a></th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</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">CFNAI</td>
<td>0.02</td>
<td>-0.58</td>
<td>0.06</td>
<td>-1.64</td>
<td>-1.79</td>
<td>-0.35</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 3-Month Moving
Average</td>
<td>-0.16</td>
<td>-0.47</td>
<td>-0.59</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Personal Consumption &amp; Housing&nbsp;</td>
<td>-0.45</td>
<td>-0.49</td>
<td>-0.42</td>
<td>-0.49</td>
<td>-0.32</td>
<td>-0.09</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Employment, Unemployment &amp; Hours</td>
<td>-0.01</td>
<td>-0.26</td>
<td>0.12</td>
<td>-0.76</td>
<td>-0.67</td>
<td>-0.15</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Production &amp; Income</td>
<td>0.45</td>
<td>0.14</td>
<td>0.25</td>
<td>-0.23</td>
<td>-0.56</td>
<td>-0.05</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Sales, Inventories &amp; Orders</td>
<td>0.04</td>
<td>0.03</td>
<td>0.11</td>
<td>-0.15</td>
<td>-0.25</td>
<td>-0.06</td>
</tr>
</tbody>
</table>

Large EU Country Orders Go Back On
The Rise&#8230;Mostly 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 22, 2010


<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left">
Germany no longer seems to be locked in to the wining
trajectory that leads the e-Zone. France and Italy each have stronger
orders growth than Germany Yr/Yr. Among the four largest EU nations
Germany alone is the one with declining orders growth over the most
recent three months on order declines in December and in October.
The UK shook off a steep decline in orders in November; that
drop unwound a huge spike in orders in October. UK data have become
extremely volatile. December has brought another outsized gain in
orders this time of 8.5%. Despite some major league see-sawing the UK
orders series appears to be in the same sort of rebound as Germany
Italy and France.
The clear message from the chart above is that despite some
period-to-period volatility in orders an upswing is still in train.
Orders are climbing up out of the hole they were dug into during the
recession. In November the large three EMU countries each had Yr/Yr
declines in orders but in December orders in Italy, France and Germany
all are in the plus column again for Yr/Yr growth.

<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>
<td class="firstcol">Countries:</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">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>
Taiwan And Thailand Report Q4 09
GDP Growth 
by <a href="/comment/Curley.html">Louise
Curley</a> February 22, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222e.jpg" style="width: 353px; height: 265px;" align="right">Taiwan
and
Thailand released fourth quarter Gross Domestic Product data this
morning.&nbsp; Taiwan is a small highly industrialized island
nation of about 7 million people with a per capita income of $16,428 in
2009 .&nbsp; Thailand, by contrast, is a large continental nation
of some 23 million people with a per capital income of $4,108 in
2008.&nbsp;&nbsp; Taiwan reported a fourth quarter increase of
4.23% and Thailand one of 3.6%.
In Taiwan, although the rate of
increase in the exports of good and service declined from 7.92% in the
third quarter, it was still a respectable 6.08%.&nbsp; Private
consumption, however, increased by 4.52% in the fourth quarter,
compared with 0.77% in the third quarter.&nbsp; Fixed capital
formation was up by 10.04% and inventory liquidation was sharply lower.
Inventories have been cut back aggressively since the beginning of
2009.&nbsp; From declines 52,762, 29,881 and 75,142million 2006 NT$
in the third, second and first quarters of 2009 respectively, the
fourth quarter saw a decline of only 2,555 million 2006 NT$.
In
Thailand, exports of goods and service increased 7.69% in the fourth
quarter, compared with 2.39% in the third quarter.&nbsp; Private
consumption also accelerated, from 1.78% to 2.97%.&nbsp; Fixed
investment, however, was 1.66% lower in the fourth quarter than in the
third quarter and inventories were increased by 1,806 million '88 Bahts
The inventory accumulation in the fourth quarter followed three
previous quarters of liquidation.&nbsp; 17,367 mil 88 bahts in the
third quarter, 910 in the second and 74,368 in the first quarter of
2009.
Quarterly changes in the major components of GDP for the two
countries are shown in the accompanying charts and in the table
below.&nbsp; Additional data for Taiwan and Thailand can be found
in the Haver Data Base:&nbsp; EMERGEPR
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222f.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100222g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Q/Q
Percent Changes (ex where noted)</th>
<th scope="col">Q4 09&nbsp;</th>
<th scope="col">Q3 09</th>
<th scope="col">Q2 09</th>
<th scope="col">Q1 09</th>
<th scope="col">Q4 08</th>
<th scope="col">Q3 08</th>
<th scope="col">Q2 08</th>
<th scope="col">Q1 08</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">GDP:&nbsp;
Taiwan</td>
<td>4.23</td>
<td>2.45</td>
<td>4.25</td>
<td>-2.55</td>
<td>-3.62</td>
<td>-3.62</td>
<td>-0.33</td>
<td>1.26</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>3.63</td>
<td>1.68</td>
<td>2.03</td>
<td>-1.45</td>
<td>-5.04</td>
<td>-0.49</td>
<td>-0.22</td>
<td>1.70</td>
</tr>
<tr class="odd">
<td class="firstcol">Private
Consumption:&nbsp; Taiwan</td>
<td>4.52</td>
<td>0.77</td>
<td>0.65</td>
<td>0.39</td>
<td>0.38</td>
<td>-1.192</td>
<td>-0.78</td>
<td>0.30</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>2.97</td>
<td>1.78</td>
<td>0.17</td>
<td>-3.43</td>
<td>0.25</td>
<td>0.87</td>
<td>-0.13</td>
<td>1.11</td>
</tr>
<tr class="odd">
<td class="firstcol">Fixed Capital
Formation:&nbsp; Taiwan</td>
<td>10.07</td>
<td>7.68</td>
<td>22.38</td>
<td>-30.52</td>
<td>-10.46</td>
<td>-2.31</td>
<td>-8.93</td>
<td>-7.20</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>-1.66</td>
<td>5.81</td>
<td>5.04</td>
<td>-11.68</td>
<td>-4.53</td>
<td>1.37</td>
<td>-1.59</td>
<td>-0.34</td>
</tr>
<tr class="odd">
<td class="firstcol">Exports of Gds
&amp; Serv:&nbsp; Taiwan</td>
<td>6.08</td>
<td>7.92</td>
<td>12.20</td>
<td>-7.32</td>
<td>-17.35</td>
<td>-2.45</td>
<td>-1.0</td>
<td>2.62</td>
</tr>
<tr>
<td class="firstcol">Thailand</td>
<td>7.69</td>
<td>2.39</td>
<td>-3.40</td>
<td>-6.66</td>
<td>-11.90</td>
<td>-1.33</td>
<td>2.52</td>
<td>1.96</td>
</tr>
<tr class="odd">
<td class="firstcol">Chg in
Inventories: Taiwan (Mil 2006NT$)</td>
<td>-2555</td>
<td>-52762</td>
<td>-29882</td>
<td>-75142</td>
<td>37228</td>
<td>42424</td>
<td>25900</td>
<td>46269</td>
</tr>
<tr>
<td class="firstcol">Thailand
(mil 1988Bahts)</td>
<td>1806</td>
<td>-17367</td>
<td>-910</td>
<td>-74368</td>
<td>21240</td>
<td>30930</td>
<td>-106</td>
<td>6497</td>
</tr>
</tbody>
</table>


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The U.S. economy regained forward momentum last month. The January Chicago Fed National Activity Index (CFNAI) from the Federal Reserve Bank of Chicago rose to a reading of 0.02 from a little-revised -0.58 in December. Also pointing [...]

Chicago Fed Index Increases ToNearly Highest Since 2007

Carol Stone, CBE

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219e.jpg" style="width: 353px; height: 265px;" align="right">Yesterday,
February 18, the Federal Reserve Board announced several changes to the
extraordinary liquidity measures it instituted to help alleviate the
recent financial crisis. Just last week, Tom Moeller described here how
extensive those liquidity provisions have been for just one part of the
program, the Term Auction Facility. Even as that effort winds down &#8211; it
will be concluded altogether with a final auction on March 8,
yesterday&#8217;s announced said &#8211; the Fed Board is also pulling back or
diminishing some of its other emergency operations. In particular, the
old &#8220;discount window&#8221;, which is now also called &#8220;primary credit&#8221;, sees
its rate raised from 50 basis points (0.50%) to 75 basis points
(0.75%). · As the Fed&#8217;s statement explains, this move increases the
spread of the primary credit, or discount, rate to 50 basis points over
the high end of the FOMC&#8217;s target for the federal funds rate, as shown
in the chart. The chart also shows the altered treatment of the
discount window beginning in 2003. Previously, the discount rate
hovered just below coincident fed funds rates, but it was changed in
January that year to a penalty rate, pegged at some spread over the
funds rate. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219f.jpg" style="width: 353px; height: 265px;" align="right"> Generally this has been 1 percentage point, 100 basis
points. Part of the emergency liquidity boost beginning in August 2007
was making these funds cheaper for borrowing banks by cutting the
spread, first to 50 basis points, and then in March 2008, to 25 basis
points, where it has been until today, when the hike to 50 took
effect.The second graph shows the amount of this primary credit. This
is similar to, but not exactly the same as the old &#8220;adjustment credit&#8221;
in the pre-2003 procedures. The idea then was that banks avoided the
discount window like the plague, so there was rarely any use of it at
all. You can see the spike over the 9/11 period, which was, up to
mid-2008, by far the record amount of borrowing. The philosophy was
changing though; the rate was made higher than other sources of funds,
but banks theoretically wouldn&#8217;t be stigmatized by availing themselves
of it. In the easy-money period of those mid-2000s, hardly any ever
needed to anyway. All this changed in 2007 and 2008. The Fed Board cut
the spread with the express intention of helping banks get money. At
the peak in late October and early November 2008, banks were borrowing
more than $100 billion in this one facility alone. More recently, this
has shrunk markedly, to &#8220;just&#8221; $14.3 billion in the Fed&#8217;s statement
week ended this past Wednesday.Some wonder if this action by the Fed
is a &#8220;tightening&#8221;, even though their statement argues that it is not.
It certainly is the first action involving a rate. But they have
already reined in their &#8220;quantitative&#8221; easing substantially, and this
newest can thus be seen as part of a progression toward non-emergency
conditions. They further indicated that the maturity of the primary
credit borrowing, which has been as long as 90 days, will be shortened
to the more typical overnight on March 18. So there are several steps
here, and in one sense, they are reactive, not pro-active. They seem to
be a response to smoother money market conditions rather that an
attempt to disrupt the markets and alter the underlying demand
conditions. So technically, this would not be a &#8220;tightening&#8221;. But it is
a &#8220;de-easing&#8221;, which must, by definition, come first.The Fed&#8217;s
statement is&nbsp;<a href="http://www.federalreserve.gov/newsevents/press/monetary/20100218a.htm">here</a>
. The rates and borrowing amounts are contained in Haver&#8217;s DAILY and
WEEKLY databases, with monthly averages in USECON.
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Yesterday, February 18, the Federal Reserve Board announced several changes to the extraordinary liquidity measures it instituted to help alleviate the recent financial crisis. Just last week, Tom Moeller described here how extensive [...]

The Fed De-Eases Bank Lending Terms

Robert Brusca

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219d.jpg" style="width: 353px; height: 265px;" align="left">
The Markit
PMIs are sensitive gauges measuring the breadth of the expansion in
manufacturing and services industries in the e-Zone. This month the MFG
PMI was above its neutral reading of 50 for the fifth month in a row.
In each of these five months MFG has accelerated improving its mark
above the neutral 50 readings.&nbsp;
Not so for services.
 For the
services, the index was also above 50 &#8211; and for the sixth consecutive
month. But the services gauge has now fallen for two months in a row.
It is not building momentum, it is losing momentum. The services
reading at 51.97 is now the weakest reading for this sector since
September 2009 when it first popped above the neutral 50 mark and began
to signal growth. Since this sector is the job-creating sector,
backtracking in services is very worrisome. True, the services sector
still is expanding. At 51.97 it stands above the neutral mark of 50.
But momentum is being lost and the margin above 50 for services is
small. The services reading is below its lifetime average of 53.67 so
it is far below normal even though the sector it technically still
registering growth. Growth does not imply normalcy.&nbsp;
Compare that to
the manufacturing index which at 54.13 has been steadily accelerating
and stands above its lifetime average reading of 51.12. Manufacturing
seems to be pointing the way ahead.
 But from other reports we know
that one of the problems in the Zone is that it has benefitted from
export led growth, and that has favored the manufacturing sector. It&#8217;s
a problem because the very name suggests that the Zone has not
cultivated its own domestic demand. And we see that loud and clear in
this report. While some services do get exported, goods are far more
likely to be exported than are services. The strength in manufacturing
stems from some considerable strength in Euro-Area export orders.
Meanwhile, the weakness at home has held back domestic demand. Just
today the UK (an EU member not an EMU member) posted a sharp drop in
retail sales, although weather seems to have been a prime culprit
there. The overriding point for Europe is that it has not cultivated
domestic demand; it is living off of demand rebounds elsewhere. And
Europe is too big to be carried for long in that fashion by the global
economy.&nbsp;The weakness in its own services sector reasonably leads us
to wonder if Europe&#8217;s export growth will be enough to sustain it until
job growth, the services sector and domestic demand- three highly
inter-linked factors - kick into gear.&nbsp;
Suffice it to say that
Europe&#8217;s report is not reassuring and its growth seems to be as much at
risk as at anytime in this nascent expansion period.
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col">FLASH
Readings
</th>
</tr>
<tr class="even">
<th colspan="3" scope="col">Markit PMIs for the
Euro-Area</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Feb-10</td>
<td>54.13</td>
<td>51.97</td>
</tr>
<tr>
<td class="firstcol">Jan-10</td>
<td>52.39</td>
<td>52.50</td>
</tr>
<tr>
<td class="firstcol">Dec-09</td>
<td>51.59</td>
<td>53.63</td>
</tr>
<tr>
<td class="firstcol">Nov-10</td>
<td>51.20</td>
<td>53.04</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">Segment
Averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>51.73</td>
<td>52.67</td>
</tr>
<tr>
<td class="firstcol">6-MO</td>
<td>50.57</td>
<td>52.36</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>44.78</td>
<td>48.47</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">136-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>60.47</td>
<td>62.36</td>
</tr>
<tr>
<td class="firstcol">Low</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>76.4%</td>
<td>55.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Range</td>
<td>26.92</td>
<td>23.12</td>
</tr>
<tr class="odd">
<td class="firstcol">Q3-2007</td>
<td>51.12</td>
<td>53.67</td>
</tr>
</tbody>
</table>

</body></html>

The Markit PMIs are sensitive gauges measuring the breadth of the expansion in manufacturing and services industries in the e-Zone. This month the MFG PMI was above its neutral reading of 50 for the fifth month in a row. In each of [...]

Disturbing Mixed Message From The Markit PMIs In EMU

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219a.jpg" style="width: 353px; height: 265px;" align="right">Consumer
price inflation remains under wraps. That's the message from this
morning's report by the U.S. Bureau of Labor Statistics that the
January CPI rose 0.2% for the fifth consecutive month. The increase was
slightly lower than Consensus expectations for a 0.3% gain though it
was part of the CPI's accelerated y/y increase of 2.7% versus the -2.0%
reading as of last July. On Wednesday the seasonally adjusted CPI
figures were revised back to 2005.&nbsp;
The acceleration noted above is the result of higher energy prices
which rose 2.8% last month and by 19.8% during the last twelve. For
January the rise reflected a 4.4% spurt in gasoline prices which have
risen by one-half during the last twelve months. Fuel oil prices also
jumped 6.9% (13.6% y/y) but natural gas &amp; electricity prices
were roughly unchanged from December and down 4.6% y/y.&nbsp;
Food &amp;
beverage prices continued weak. They posted a moderate
0.2% January increase but a 0.2% decline versus last year. Dairy prices
jumped 2.1% in January yet remained down 5.1% y/y. Fruit &amp;
vegetable costs showed the same pattern. They rose 1.3% last month but
were off 1.2% y/y. In the same vein, prices for meats, poultry, fish
&amp; eggs rose 0.4% but were down 3.2% y/y. The restraint on the
monthly food price increase came from a 0.5% decline in cereal
&amp; bakery product prices (-1.5% y/y) and a modest 0.1% uptick
(1.6% y/y) in the cost of eating out. Alcoholic beverage prices also
rose just 0.1% (1.5% y/y) following strength during the last fifteen
years.&nbsp;
Core consumer
prices remained weak. They posted a 0.1% decline, the first negative
reading since 1982, as earlier strength in core goods prices
tapered off. Their 0.1% January uptick was part of a reduced 1.7% (AR)
increase during the last three months. That compares to a 5.4%
three-month gain as of last April. The monthly increase in tobacco
prices tapered off to 0.4% (29.5% y/y) and new &amp; used motor
vehicles prices rose just 0.2% (5.4% y/y). Also easing were apparel
prices which fell 0.1% (+1.7% y/y). It was the third decline in the
last four months. Continuing weak were prices for household furnishings
&amp; operation, off 0.1% (-1.2% y/y) for the ninth straight month
of decline.&nbsp;
Core services
prices continued weak with a 0.2% decline (+0.9% y/y), the
first drop since 1982. Weakness in the housing market caused a 0.5%
decline in shelter prices which are off 0.3% y/y. Owners equivalent
rent of primary residences, a measure not equivalent to other house
price measures, slipped further from a June peak and rose just 0.4%
during the last twelve months. Elsewhere in services, public
transportation prices fell 1.8% (+2.8% y/y) while medical care services
prices continued steadily upward by 0.5% (3.5% y/y). Finally, education
costs remained strong with a 0.3% increase (4.6% y/y) but recreation
prices slipped for the fifth straight month (0.4% y/y).&nbsp;
The chained CPI, which adjusts for shifts in consumption
patterns rose 0.4% last month and rose 3.6% year-to-year. Conversely,
chained prices less food &amp; energy slipped marginally (+1.5%
y/y).&nbsp;
The consumer price data is available in Haver's USECON
database while detailed figures can be found in the CPIDATA database.

Modifications
to the terms of the discount window
lending programs by the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/20100218a.htm">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer
Price Index</a> 
(%)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Jan. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.2</td>
<td>0.2</td>
<td>0.2</td>
<td>2.7</td>
<td>-0.3</td>
<td>3.8</td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>-0.1</td>
<td>0.1</td>
<td>0.0</td>
<td>1.5</td>
<td>1.7</td>
<td>2.3</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>0.1</td>
<td>0.1</td>
<td>0.2</td>
<td>3.0</td>
<td>1.3</td>
<td>0.1</td>
<td>-0.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>-0.2</td>
<td>0.1</td>
<td>-0.0</td>
<td>0.9</td>
<td>1.9</td>
<td>3.1</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>2.8</td>
<td>0.8</td>
<td>2.2</td>
<td>19.8</td>
<td>-18.1</td>
<td>13.7</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.2</td>
<td>0.1</td>
<td>0.1</td>
<td>-0.2</td>
<td>-0.2</td>
<td>5.4</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM" style="color: black;">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.4</td>
<td>0.8</td>
<td>0.0</td>
<td>3.6</td>
<td>-0.4</td>
<td>3.3</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>-0.0</td>
<td>0.1</td>
<td>-0.2</td>
<td>1.5</td>
<td>1.3</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>


</body></html>

Consumer price inflation remains under wraps. That's the message from this morning's report by the U.S. Bureau of Labor Statistics that the January CPI rose 0.2% for the fifth consecutive month. The increase was slightly lower than [...]

CPI Firms With Energy Prices But Core Prices Decline

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219a.jpg" style="width: 353px; height: 265px;" align="right">Consumer
price inflation remains under wraps. That's the message from this
morning's report by the U.S. Bureau of Labor Statistics that the
January CPI rose 0.2% for the fifth consecutive month. The increase was
slightly lower than Consensus expectations for a 0.3% gain though it
was part of the CPI's accelerated y/y increase of 2.7% versus the -2.0%
reading as of last July. On Wednesday the seasonally adjusted CPI
figures were revised back to 2005.&nbsp;
The acceleration noted above is the result of higher energy prices
which rose 2.8% last month and by 19.8% during the last twelve. For
January the rise reflected a 4.4% spurt in gasoline prices which have
risen by one-half during the last twelve months. Fuel oil prices also
jumped 6.9% (13.6% y/y) but natural gas &amp; electricity prices
were roughly unchanged from December and down 4.6% y/y.&nbsp;
Food &amp;
beverage prices continued weak. They posted a moderate
0.2% January increase but a 0.2% decline versus last year. Dairy prices
jumped 2.1% in January yet remained down 5.1% y/y. Fruit &amp;
vegetable costs showed the same pattern. They rose 1.3% last month but
were off 1.2% y/y. In the same vein, prices for meats, poultry, fish
&amp; eggs rose 0.4% but were down 3.2% y/y. The restraint on the
monthly food price increase came from a 0.5% decline in cereal
&amp; bakery product prices (-1.5% y/y) and a modest 0.1% uptick
(1.6% y/y) in the cost of eating out. Alcoholic beverage prices also
rose just 0.1% (1.5% y/y) following strength during the last fifteen
years.&nbsp;
Core consumer
prices remained weak. They posted a 0.1% decline, the first negative
reading since 1982, as earlier strength in core goods prices
tapered off. Their 0.1% January uptick was part of a reduced 1.7% (AR)
increase during the last three months. That compares to a 5.4%
three-month gain as of last April. The monthly increase in tobacco
prices tapered off to 0.4% (29.5% y/y) and new &amp; used motor
vehicles prices rose just 0.2% (5.4% y/y). Also easing were apparel
prices which fell 0.1% (+1.7% y/y). It was the third decline in the
last four months. Continuing weak were prices for household furnishings
&amp; operation, off 0.1% (-1.2% y/y) for the ninth straight month
of decline.&nbsp;
Core services
prices continued weak with a 0.2% decline (+0.9% y/y), the
first drop since 1982. Weakness in the housing market caused a 0.5%
decline in shelter prices which are off 0.3% y/y. Owners equivalent
rent of primary residences, a measure not equivalent to other house
price measures, slipped further from a June peak and rose just 0.4%
during the last twelve months. Elsewhere in services, public
transportation prices fell 1.8% (+2.8% y/y) while medical care services
prices continued steadily upward by 0.5% (3.5% y/y). Finally, education
costs remained strong with a 0.3% increase (4.6% y/y) but recreation
prices slipped for the fifth straight month (0.4% y/y).&nbsp;
The chained CPI, which adjusts for shifts in consumption
patterns rose 0.4% last month and rose 3.6% year-to-year. Conversely,
chained prices less food &amp; energy slipped marginally (+1.5%
y/y).&nbsp;
The consumer price data is available in Haver's USECON
database while detailed figures can be found in the CPIDATA database.

Modifications
to the terms of the discount window
lending programs by the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/20100218a.htm">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80101/@E80101.HTM">Consumer
Price Index</a> 
(%)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Jan. y/y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total&nbsp;</td>
<td>0.2</td>
<td>0.2</td>
<td>0.2</td>
<td>2.7</td>
<td>-0.3</td>
<td>3.8</td>
<td>2.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Total less Food &amp; Energy</td>
<td>-0.1</td>
<td>0.1</td>
<td>0.0</td>
<td>1.5</td>
<td>1.7</td>
<td>2.3</td>
<td>2.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Goods less Food
&amp; Energy</td>
<td>0.1</td>
<td>0.1</td>
<td>0.2</td>
<td>3.0</td>
<td>1.3</td>
<td>0.1</td>
<td>-0.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Services less Energy</td>
<td>-0.2</td>
<td>0.1</td>
<td>-0.0</td>
<td>0.9</td>
<td>1.9</td>
<td>3.1</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Energy</td>
<td>2.8</td>
<td>0.8</td>
<td>2.2</td>
<td>19.8</td>
<td>-18.1</td>
<td>13.7</td>
<td>5.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Food &amp;
Beverages</td>
<td>0.2</td>
<td>0.1</td>
<td>0.1</td>
<td>-0.2</td>
<td>-0.2</td>
<td>5.4</td>
<td>3.9</td>
</tr>
<tr>
<td class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@E8/@E801/@E80113/@E80113.HTM" style="color: black;">Chained CPI: Total (NSA)</a>&nbsp;</td>
<td>0.4</td>
<td>0.8</td>
<td>0.0</td>
<td>3.6</td>
<td>-0.4</td>
<td>3.3</td>
<td>2.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Total less Food
&amp; Energy&nbsp;</td>
<td>-0.0</td>
<td>0.1</td>
<td>-0.2</td>
<td>1.5</td>
<td>1.3</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>


Disturbing Mixed Message From The
Markit PMIs In EMU 
by <a href="/comment/Brusca.html">Robert
Brusca</a> February 19, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219d.jpg" style="width: 353px; height: 265px;" align="left">The
Markit
PMIs are sensitive gauges measuring the breadth of the expansion in
manufacturing and services industries in the e-Zone. This month the MFG
PMI was above its neutral reading of 50 for the fifth month in a row.
In each of these five months MFG has accelerated improving its mark
above the neutral 50 readings.&nbsp;
Not so for services.
 For the
services, the index was also above 50 &#8211; and for the sixth consecutive
month. But the services gauge has now fallen for two months in a row.
It is not building momentum, it is losing momentum. The services
reading at 51.97 is now the weakest reading for this sector since
September 2009 when it first popped above the neutral 50 mark and began
to signal growth. Since this sector is the job-creating sector,
backtracking in services is very worrisome. 
 True, the services sector
still is expanding. At 51.97 it stands above the neutral mark of 50.
But momentum is being lost and the margin above 50 for services is
small. The services reading is below its lifetime average of 53.67 so
it is far below normal even though the sector it technically still
registering growth. Growth does not imply normalcy.&nbsp;
Compare that to
the manufacturing index which at 54.13 has been steadily accelerating
and stands above its lifetime average reading of 51.12. Manufacturing
seems to be pointing the way ahead.
 But from other reports we know
that one of the problems in the Zone is that it has benefitted from
export led growth, and that has favored the manufacturing sector. It&#8217;s
a problem because the very name suggests that the Zone has not
cultivated its own domestic demand. And we see that loud and clear in
this report. While some services do get exported, goods are far more
likely to be exported than are services. The strength in manufacturing
stems from some considerable strength in Euro-Area export orders.
Meanwhile, the weakness at home has held back domestic demand. Just
today the UK (an EU member not an EMU member) posted a sharp drop in
retail sales, although weather seems to have been a prime culprit
there. The overriding point for Europe is that it has not cultivated
domestic demand; it is living off of demand rebounds elsewhere. And
Europe is too big to be carried for long in that fashion by the global
economy.&nbsp;
The weakness in its own services sector reasonably leads us
to wonder if Europe&#8217;s export growth will be enough to sustain it until
job growth, the services sector and domestic demand- three highly
inter-linked factors - kick into gear.&nbsp;
Suffice it to say that
Europe&#8217;s report is not reassuring and its growth seems to be as much at
risk as at anytime in this nascent expansion period.
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="3" scope="col">FLASH
Readings
</th>
</tr>
<tr class="even">
<th colspan="3" scope="col">Markit PMIs for the
Euro-Area</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>MFG</td>
<td>Services</td>
</tr>
<tr>
<td class="firstcol">Feb-10</td>
<td>54.13</td>
<td>51.97</td>
</tr>
<tr>
<td class="firstcol">Jan-10</td>
<td>52.39</td>
<td>52.50</td>
</tr>
<tr>
<td class="firstcol">Dec-09</td>
<td>51.59</td>
<td>53.63</td>
</tr>
<tr>
<td class="firstcol">Nov-10</td>
<td>51.20</td>
<td>53.04</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">Segment
Averages</td>
</tr>
<tr>
<td class="firstcol">3-Mo</td>
<td>51.73</td>
<td>52.67</td>
</tr>
<tr>
<td class="firstcol">6-MO</td>
<td>50.57</td>
<td>52.36</td>
</tr>
<tr>
<td class="firstcol">12-Mo</td>
<td>44.78</td>
<td>48.47</td>
</tr>
<tr class="odd">
<td colspan="3" class="firstcol">136-Mo
Range</td>
</tr>
<tr>
<td class="firstcol">High</td>
<td>60.47</td>
<td>62.36</td>
</tr>
<tr>
<td class="firstcol">Low</td>
<td>33.55</td>
<td>39.24</td>
</tr>
<tr>
<td class="firstcol">% Range</td>
<td>76.4%</td>
<td>55.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Range</td>
<td>26.92</td>
<td>23.12</td>
</tr>
<tr class="odd">
<td class="firstcol">Q3-2007</td>
<td>51.12</td>
<td>53.67</td>
</tr>
</tbody>
</table>

The Fed De-Eases Bank Lending Terms 
by <a href="/comment/Stone.html">Carol
Stone</a> February 19, 2010



<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219e.jpg" style="width: 353px; height: 265px;" align="right">Yesterday,
February 18, the Federal Reserve Board announced several changes to the
extraordinary liquidity measures it instituted to help alleviate the
recent financial crisis. Just last week, Tom Moeller described here how
extensive those liquidity provisions have been for just one part of the
program, the Term Auction Facility. Even as that effort winds down &#8211; it
will be concluded altogether with a final auction on March 8,
yesterday&#8217;s announced said &#8211; the Fed Board is also pulling back or
diminishing some of its other emergency operations. In particular, the
old &#8220;discount window&#8221;, which is now also called &#8220;primary credit&#8221;, sees
its rate raised from 50 basis points (0.50%) to 75 basis points
(0.75%). · As the Fed&#8217;s statement explains, this move increases the
spread of the primary credit, or discount, rate to 50 basis points over
the high end of the FOMC&#8217;s target for the federal funds rate, as shown
in the chart. The chart also shows the altered treatment of the
discount window beginning in 2003. Previously, the discount rate
hovered just below coincident fed funds rates, but it was changed in
January that year to a penalty rate, pegged at some spread over the
funds rate. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100219f.jpg" style="width: 353px; height: 265px;" align="right">
Generally this has been 1 percentage point, 100 basis
points. Part of the emergency liquidity boost beginning in August 2007
was making these funds cheaper for borrowing banks by cutting the
spread, first to 50 basis points, and then in March 2008, to 25 basis
points, where it has been until today, when the hike to 50 took
effect.
The second graph shows the amount of this primary credit. This
is similar to, but not exactly the same as the old &#8220;adjustment credit&#8221;
in the pre-2003 procedures. The idea then was that banks avoided the
discount window like the plague, so there was rarely any use of it at
all. You can see the spike over the 9/11 period, which was, up to
mid-2008, by far the record amount of borrowing. The philosophy was
changing though; the rate was made higher than other sources of funds,
but banks theoretically wouldn&#8217;t be stigmatized by availing themselves
of it. In the easy-money period of those mid-2000s, hardly any ever
needed to anyway. All this changed in 2007 and 2008. The Fed Board cut
the spread with the express intention of helping banks get money. At
the peak in late October and early November 2008, banks were borrowing
more than $100 billion in this one facility alone. More recently, this
has shrunk markedly, to &#8220;just&#8221; $14.3 billion in the Fed&#8217;s statement
week ended this past Wednesday.
Some wonder if this action by the Fed
is a &#8220;tightening&#8221;, even though their statement argues that it is not.
It certainly is the first action involving a rate. But they have
already reined in their &#8220;quantitative&#8221; easing substantially, and this
newest can thus be seen as part of a progression toward non-emergency
conditions. They further indicated that the maturity of the primary
credit borrowing, which has been as long as 90 days, will be shortened
to the more typical overnight on March 18. So there are several steps
here, and in one sense, they are reactive, not pro-active. They seem to
be a response to smoother money market conditions rather that an
attempt to disrupt the markets and alter the underlying demand
conditions. So technically, this would not be a &#8220;tightening&#8221;. But it is
a &#8220;de-easing&#8221;, which must, by definition, come first.
The Fed&#8217;s
statement is&nbsp;<a href="http://www.federalreserve.gov/newsevents/press/monetary/20100218a.htm">here</a>
. The rates and borrowing amounts are contained in Haver&#8217;s DAILY and
WEEKLY databases, with monthly averages in USECON.

</body></html>

CPI Firms With Energy Prices ButCore Prices Decline

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218k.jpg" style="width: 353px; height: 265px;" align="right">The
Philadelphia Federal Reserve Bank indicated that its index of regional
factory sector activity rose modestly this month and made up some of a
January decline. At 17.6 the index about matched Consensus expectations
and has been positive since the summer. The series was near its highest
level since early-2005 and compared to figures near -40.0 this past
fall and winter.During the last ten years there has been a 77%
correlation between the level of the Philadelphia Fed Business
Conditions Index and the three-month growth in factory sector
industrial production. There has been a 70% correlation with q/q growth
in real GDP. The latest survey from the Philadelphia Federal Reserve
Bank can be found <a href="http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2010/bos0210.pdf">here.</a>
Amongst the components, new orders, shipments and inventories were
notably strong above break-even. The employment series also rose to its
highest since 2007. During the last ten years there has been a 91%
correlation between the index level and the three-month change in
manufacturing sector payrolls.&nbsp; The prices paid index rose sharply to
its highest level since August of last year and compares to negative
readings this past winter and spring. During the last ten years there
has been a 69% correlation between the prices paid index and the
three-month growth in the intermediate goods PPI. There has been an 80%
correlation with the change in core intermediate goods prices. The
separate index of expected business conditions in six months fell to
its lowest level since October 2008. Many of the index components
including orders, unfilled orders, delivery times and inventories fell
while shipments and capital expenditures rose.The figures from the
Philadelphia Federal Reserve can be found in Haver's SURVEYS
database. News About the Future and Economic Fluctuations from
the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q4/brq409_future-and-economic-fluctuations.pdf">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218l.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218m.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Philadelphia
Fed (%)</th>
<th scope="col">February</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">February '09</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">General Activity Index</td>
<td>17.6</td>
<td>15.2</td>
<td>22.5</td>
<td>-36.1</td>
<td>-7.6</td>
<td>-21.4</td>
<td>5.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders</td>
<td>22.7</td>
<td>3.2</td>
<td>8.3</td>
<td>-28.1</td>
<td>-9.7</td>
<td>-14.7</td>
<td>6.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Number of Employees</td>
<td>7.4</td>
<td>6.1</td>
<td>4.5</td>
<td>-41.1</td>
<td>-23.8</td>
<td>-8.8</td>
<td>6.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Inventories</td>
<td>3.2</td>
<td>-1.6</td>
<td>-5.7</td>
<td>-25.2</td>
<td>-24.0</td>
<td>-16.7</td>
<td>-3.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index</td>
<td>32.4</td>
<td>33.2</td>
<td>36.6</td>
<td>-12.2</td>
<td>-3.9</td>
<td>36.3</td>
<td>26.3</td>
</tr>
</tbody>
</table>
</body></html>

The Philadelphia Federal Reserve Bank indicated that its index of regional factory sector activity rose modestly this month and made up some of a January decline. At 17.6 the index about matched Consensus expectations and has been [...]

Philadelphia Fed Index Increases With Broad-Based Component Strength

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218h.jpg" style="width: 353px; height: 265px;" align="right">
Today's
Labor Department report that initial claims for jobless insurance moved
higher last week after falling during the prior period underscores a
sideways pattern in place since December. Jobless insurance rose 31,000
to 473,000 following a 41,000 decline that was less than reported
initially for the prior week. Down from the recession peak of 674,000
hit last March, claims remained near the lowest level since September
2008. The weekly rise in claims contrasted with Consensus expectations
for a decline to 430,000. The four-week moving average of initial
claims fell slightly to 467,500 and remained just above the cycle low.The latest initial claims figure covers the survey week for February
nonfarm payrolls. There were 3,000 (1.3%) fewer claims in February than
during the January period. During the last ten years there has been an
inverse 84% correlation between the change in payrolls and the level of
initial claims.Continuing claims for unemployment insurance during
the latest week were stable at the cycle low which left them down by
one-third since late-June. Continuing claims are 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;Extended benefits for unemployment
insurance fell to a new cycle low of 205,744. 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 fourth 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 January 30 were in Alaska
(7.3%), Wisconsin (6.4), Pennsylvania (6.4), Montana (6.3), Michigan
(5.7), Washington (5.5), North Carolina (5.3) and Connecticut (5.2).
The lowest insured unemployment rates were in Virginia (2.3), Texas
(2.4), Florida (3.4), Maryland (3.7), Wyoming (3.7), Mississippi (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.The Economy and Why the Federal Reserve Needs to
Supervise Banks from the Federal Reserve Bank of Minneapolis
is available&nbsp; <a href="http://www.minneapolisfed.org/news_events/pres/nrk02-16-10.pdf">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218h.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218j.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">2/13/10</th>
<th scope="col">2/6/10</th>
<th scope="col">1/30/10</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>473</td>
<td>442</td>
<td>483</td>
<td>-25.0%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,563</td>
<td>4,563</td>
<td>-7.8%</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>

Today's Labor Department report that initial claims for jobless insurance moved higher last week after falling during the prior period underscores a sideways pattern in place since December. Jobless insurance rose 31,000 to 473,000 [...]

U.S. Initial Jobless Insurance Claims Move Back Up

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<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218e.jpg" style="width: 353px; height: 265px;" align="right">The uptrend
in the Conference Board's Index of Leading Economic Indicators
continued last month though it lost a little steam. The rise of 0.3%
followed stronger monthly gains dating back to April and the six-month
rate of increase at 9.8% (centered) was its weakest since May. The
leading index is based on actual reports for eight economic data
series. The Conference Board initially estimates two series, consumer
and capital goods orders.&nbsp; The breadth of increase amongst
the component series slipped last month to its lowest since last March.
Barely half of the ten components rose during January versus all of
them during December. During the most recent six months, however, a
stable 80% of the series rose. Prominent in last month's increase was a
steeper interest rate yield curve, vendor performance and weekly
hours.Continuing to suggest economic improvement was the coincident
indicator series which rose 0.2%. The gain lifted the six-month change
to 1.2%, up from -7.9% at its worst in January of last year. Increases
in industrial production, real personal income and business sales have
been modest but compare to sharp declines late in 2008. Declines in
payroll employment also have eased considerably.&nbsp; In a
continued sign that excesses in the U.S. economy are still falling, the
lagging index continues to drop as it has for a year. Leading the
decline have been shortened duration of unemployment, lower commercial
&amp; industrial loans outstanding and retrenchment in consumer
credit. The ratio of coincident-to-lagging indicators (another leading
indicator) also continued higher for the tenth straight month to the
highest level since September of 2008.The Conference
Board figures are available in Haver's BCI
database. Visit the Conference Board's <a href="http://www.conference-board.org">site</a> for
coverage of leading indicator series from around the world. The latest
U.S. Leading Indicators release can be found here <a href="http://www.conference-board.org/pdf_free/economics/bci/justrt.pdf">here</a>.&nbsp;
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218f.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100218g.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;="" href="http://www.haverselect.com/dlx/BCI/BCI.HTM" style="color: black;">Business Cycle Indicators</a>
(%)</th>
<th scope="col">January</th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">Oct. 6-Month % (AR)</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Leading</td>
<td>0.3</td>
<td>1.2</td>
<td>1.1</td>
<td>9.8</td>
<td>0.4</td>
<td>-2.8</td>
<td>-0.4</td>
</tr>
<tr>
<td class="firstcol">Coincident</td>
<td>0.2</td>
<td>0.0</td>
<td>0.3</td>
<td>1.2</td>
<td>-5.1</td>
<td>-1.2</td>
<td>1.4</td>
</tr>
<tr class="odd">
<td class="firstcol">Lagging</td>
<td>-0.1</td>
<td>-0.3</td>
<td>-0.7</td>
<td>-4.6</td>
<td>-1.6</td>
<td>3.2</td>
<td>3.0</td>
</tr>
</tbody>
</table>
</body></html>

The uptrend in the Conference Board's Index of Leading Economic Indicators continued last month though it lost a little steam. The rise of 0.3% followed stronger monthly gains dating back to April and the six-month rate of increase at [...]

U.S. Leading Economic Indicators Suggest Continued Recovery

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.

260112T1.jpg

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.

260112T2.jpg

**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).

260112T3.jpg

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.

260112T4.jpg

**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.

260112T5.jpg

**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.

260112T6.jpg

Asia

Economic Letter from Asia: A Bumpy Start

Michael J. Moran

260109A.jpg

260109B.jpg

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.

260109C.jpg

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

260109F17.jpg

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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.