Louise Curley

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119d.jpg" style="width: 353px; height: 265px;" align="right">According
to
the January ZEW indicator, the percentage of German investors and
analysts optimistic about the outlook six months ahead declined for the
fourth month.&nbsp; The percent balance is now 47.2% compared with
the recent peak of 57.7% in September, however, it is still well above
the long term average of 27.1%.&nbsp; At the same time, more of
these investors see improvement in current conditions although the
pessimists still outweigh the optimists.&nbsp; The percent balance
between those who see improvement in current conditions and those who
see deterioration was -56.6% in January, 2010, compared with -60.6% in
December and the peak of -92.8% in May of 2009.&nbsp; The disparity
between the participants' views of current conditions and expectations
is not unusual as can be seen in the first chart.</p>
<p> The impact on the
Euro Area of the financial difficulties in Greece that have come to the
surface during the survey period may have had some dampening effect on
expectations and outweighed some of the more favorable economic
developments. Over the past month or so, the Euro has declined 5.5%
from $1.5120 to $1.4279 today and exports continue to rise.&nbsp;
The second chart shows the movement in the Euro on a daily basis and
the trend in monthly exports over the past year.</p>
<p> Along with the
improvement in the appraisal of current conditions there has been a
general improvement in the outlook for profits in the 13 industries
that ZEW monitors.&nbsp; The positive appraisal for profits in
Banking, Chemical, Steel/Metal, Electronic, Machinery, Utilities,
Service, Telecommunications, and Information Technology industries
increased in January and the negative percent balance for profits in
the Vehicles/Automotive industry was reduced.&nbsp; The percent
balances on only three industries declined--Insurance,
Consumption/Trade and Construction in January, but the profit outlook
in these industries has shown improvement since the low point reached
in October 2008 as can be seen in the third chart.&nbsp; There are
now only two industries where the percent balances on the profit
outlook are negative--Consumption/Trade (-12.1%) and
Vehicles/Automotive (-23.2%).&nbsp;</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119e.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">ZEW
INDICATORS (% Balance)</th>
<th scope="col"><b>Jan 10</b></th>
<th scope="col"><b>Dec 09</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Sep 09</b></th>
<th scope="col"><b>Aug 09</b></th>
<th scope="col"><b>July 09</b></th>
<th scope="col"><b>June 09</b></th>
<th scope="col"><b>May 09</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Current Conditions</td>
<td>-56.6</td>
<td>-60.6</td>
<td>-65.6</td>
<td>-72.2</td>
<td>-74.0</td>
<td>-77.2</td>
<td>-88.3</td>
<td>-89.7</td>
<td>92.8</td>
</tr>
<tr>
<td class="firstcol">Expectations 6
Months Ahead</td>
<td>47.2</td>
<td>50.4</td>
<td>51.1</td>
<td>56.0</td>
<td>57.7</td>
<td>56.1</td>
<td>39.5</td>
<td>44.8</td>
<td>31.1</td>
</tr>
</tbody>
</table>
</span>
</body></html>

According to the January ZEW indicator, the percentage of German investors and analysts optimistic about the outlook six months ahead declined for the fourth month. The percent balance is now 47.2% compared with the recent peak of [...]

German Investors More Cautious On The General Outlook But Still See Improvement In The Profit Outlook

Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119a.jpg" style="width: 353px; height: 265px;" align="right">
The U.S.
economic recession brought with it the highest level of misery in over
twenty five years. The December misery index reached 12.7% which was up
from 11.8% during November. The index is calculated as the sum of the
unemployment rate and the y/y change in the consumer price index. Not
only was the index level its highest since 1983, but the 5.2 point
increase versus December '08 was the quickest since the "credit crunch"
recession of 1980.</p><p>Higher unemployment accounts the index's
stretch into double digits. At 10.0%, not only is the unemployment rate
high but its 2.6 percentage point increase over the last twelve months
is nearly the quickest since 1975. (Before the current reading, the 4.0
point rise as of June set the record.)</p><p> Low inflation has
ameliorated some of the pain caused by higher unemployment, but the
positive effect is about to diminish. The 2.8% gain in the CPI versus
last year was down sharply from the 1980 peak of 14.6% when oil prices
spiked. However, the misery index soon will reflect the increase in
energy prices.&nbsp;
</p><p>The <b> Misery Index is calculated by Haver Analytics</b>.
It is the sum of the unemployment rate and the year-over-year
percentage change in the CPI-U from the Bureau of Labor
Statistics.·&nbsp; <strong>The Fed's Monetary Policy
Response to the Current Crisis</strong> is from the San Francisco
Federal Reserve published last May and it can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-17.pdf">here</a>.</p>

<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119c.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"></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>December '08</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Misery Index (%)</td>
<td>12.7</td>
<td>11.8</td>
<td>7.5</td>
<td>8.9</td>
<td>9.7</td>
<td>7.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Unemployment Rate (%)</td>
<td>10.0</td>
<td>10.0</td>
<td>7.4</td>
<td>9.3</td>
<td>5.8</td>
<td>4.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Consumer Prices (Y/Y
%)</td>
<td>2.7</td>
<td>1.8</td>
<td>0.1</td>
<td>-0.4</td>
<td>3.8</td>
<td>2.9</td>
</tr>
</tbody>
</table>
</span></body></html>

The U.S. economic recession brought with it the highest level of misery in over twenty five years. The December misery index reached 12.7% which was up from 11.8% during November. The index is calculated as the sum of the unemployment [...]

Misery Reaches Highest Since 1983

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119a.jpg" style="width: 353px; height: 265px;" align="right">The
U.S.
economic recession brought with it the highest level of misery in over
twenty five years. The December misery index reached 12.7% which was up
from 11.8% during November. The index is calculated as the sum of the
unemployment rate and the y/y change in the consumer price index. Not
only was the index level its highest since 1983, but the 5.2 point
increase versus December '08 was the quickest since the "credit crunch"
recession of 1980.</p>
<p>Higher unemployment accounts the index's
stretch into double digits. At 10.0%, not only is the unemployment rate
high but its 2.6 percentage point increase over the last twelve months
is nearly the quickest since 1975. (Before the current reading, the 4.0
point rise as of June set the record.)</p>
<p> Low inflation has
ameliorated some of the pain caused by higher unemployment, but the
positive effect is about to diminish. The 2.8% gain in the CPI versus
last year was down sharply from the 1980 peak of 14.6% when oil prices
spiked. However, the misery index soon will reflect the increase in
energy prices.&nbsp;
</p>
<p>The <b> Misery Index is calculated by Haver Analytics</b>.
It is the sum of the unemployment rate and the year-over-year
percentage change in the CPI-U from the Bureau of Labor
Statistics.·&nbsp; <strong>The Fed's Monetary Policy
Response to the Current Crisis</strong> is from the San Francisco
Federal Reserve published last May and it can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-17.pdf">here</a>.</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119b.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119c.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"></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>December '08</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Misery Index (%)</td>
<td>12.7</td>
<td>11.8</td>
<td>7.5</td>
<td>8.9</td>
<td>9.7</td>
<td>7.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Unemployment Rate (%)</td>
<td>10.0</td>
<td>10.0</td>
<td>7.4</td>
<td>9.3</td>
<td>5.8</td>
<td>4.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Consumer Prices (Y/Y
%)</td>
<td>2.7</td>
<td>1.8</td>
<td>0.1</td>
<td>-0.4</td>
<td>3.8</td>
<td>2.9</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">German Investors More Cautious On
The General Outlook
But Still See Improvement In The Profit Outlook
</span><br>
<span id="byline">by <a href="/comment/Curley.html">Louise
Curley</a> January 19, 2010</span>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119d.jpg" style="width: 353px; height: 265px;" align="right">According
to
the January ZEW indicator, the percentage of German investors and
analysts optimistic about the outlook six months ahead declined for the
fourth month.&nbsp; The percent balance is now 47.2% compared with
the recent peak of 57.7% in September, however, it is still well above
the long term average of 27.1%.&nbsp; At the same time, more of
these investors see improvement in current conditions although the
pessimists still outweigh the optimists.&nbsp; The percent balance
between those who see improvement in current conditions and those who
see deterioration was -56.6% in January, 2010, compared with -60.6% in
December and the peak of -92.8% in May of 2009.&nbsp; The disparity
between the participants' views of current conditions and expectations
is not unusual as can be seen in the first chart.</p>
<p> The impact on the
Euro Area of the financial difficulties in Greece that have come to the
surface during the survey period may have had some dampening effect on
expectations and outweighed some of the more favorable economic
developments. Over the past month or so, the Euro has declined 5.5%
from $1.5120 to $1.4279 today and exports continue to rise.&nbsp;
The second chart shows the movement in the Euro on a daily basis and
the trend in monthly exports over the past year.</p>
<p> Along with the
improvement in the appraisal of current conditions there has been a
general improvement in the outlook for profits in the 13 industries
that ZEW monitors.&nbsp; The positive appraisal for profits in
Banking, Chemical, Steel/Metal, Electronic, Machinery, Utilities,
Service, Telecommunications, and Information Technology industries
increased in January and the negative percent balance for profits in
the Vehicles/Automotive industry was reduced.&nbsp; The percent
balances on only three industries declined--Insurance,
Consumption/Trade and Construction in January, but the profit outlook
in these industries has shown improvement since the low point reached
in October 2008 as can be seen in the third chart.&nbsp; There are
now only two industries where the percent balances on the profit
outlook are negative--Consumption/Trade (-12.1%) and
Vehicles/Automotive (-23.2%).&nbsp;</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119e.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">ZEW
INDICATORS (% Balance)</th>
<th scope="col"><b>Jan 10</b></th>
<th scope="col"><b>Dec 09</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Sep 09</b></th>
<th scope="col"><b>Aug 09</b></th>
<th scope="col"><b>July 09</b></th>
<th scope="col"><b>June 09</b></th>
<th scope="col"><b>May 09</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Current Conditions</td>
<td>-56.6</td>
<td>-60.6</td>
<td>-65.6</td>
<td>-72.2</td>
<td>-74.0</td>
<td>-77.2</td>
<td>-88.3</td>
<td>-89.7</td>
<td>92.8</td>
</tr>
<tr>
<td class="firstcol">Expectations 6
Months Ahead</td>
<td>47.2</td>
<td>50.4</td>
<td>51.1</td>
<td>56.0</td>
<td>57.7</td>
<td>56.1</td>
<td>39.5</td>
<td>44.8</td>
<td>31.1</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">U.S. Home Builders&#8217; Index Dips
Again</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> January 19, 2010</span>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119g.jpg" style="width: 353px; height: 265px;" align="right">According
to The National Association of Home Builders, housing market activity
slipped again from its earlier improved level. The
Association&nbsp; reported that its January Composite Housing
Market Index edged lower to 15 from 16 in December and from 19 last
September. Nevertheless, the index remained nearly double the low of 8
last January. The index is compiled from survey questions asking
builders to rate market conditions as &#8220;good&#8221;, &#8220;fair&#8221;, &#8220;poor&#8221; or &#8220;very
high&#8221; to &#8220;very low&#8221;.<span> </span>The figure is a
diffusion index, therefore, numerical results over 50 indicate a
predominance of &#8220;good&#8221; readings. In the West the index fell hard to a
reading of 16 from 19 in December but remained up by four times since
January '09. In all other regions the m/m declines were moderate and
levels remained up sharply from January 2009.</p>
<p>The present
sales index slipped to 15 which was down from the August high but the
sub-index of sales during the next six months held steady&nbsp;
m/m. Improvement from 2009 was moderate.&nbsp;The Home Builders'
Association also reported that traffic of prospective buyers slipped
from December to the lowest level since March.</p>
<p>The
Home Builders' Housing Opportunity Index, which is the share of homes
sold that could be considered affordable to a family earning the median
income, fell in 3Q '09 to 70.1%. It had jumped earlier to a record high
of 72.5% buoyed by lower home prices, lower interest rates and higher
income. (There is a break in the series from 2002 to
2003.)</p>
<p>The NAHB has compiled the <b>Housing Market
Index</b> since 1985.<span> </span>The weights
assigned to the individual index components are .5920 for single family
detached sales, present time; .1358 for single family detached sales,
next six months; and .2722 for traffic of prospective buyers. The
results, along with other housing and remodeling indexes from NAHB
Economics, are included in Haver&#8217;s <b>SURVEYS</b> database.</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119h.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100119i.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/SURVEYS/@S4/@S4.HTM" style="color: black;">Nat'l Association of Home Builders</a></b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>&nbsp;January '09</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Housing Market Index
(All Good=100)</td>
<td>15</td>
<td>16</td>
<td>17</td>
<td>8</td>
<td>15</td>
<td>16</td>
<td>27</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family Sales</td>
<td>15</td>
<td>16</td>
<td>17</td>
<td>6</td>
<td>13</td>
<td>16</td>
<td>27</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Single-Family Sales:
Next Six Months</td>
<td>26</td>
<td>26</td>
<td>28</td>
<td>17</td>
<td>24</td>
<td>25</td>
<td>37</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Traffic of
Prospective Buyers</td>
<td>12</td>
<td>13</td>
<td>13</td>
<td>8</td>
<td>13</td>
<td>14</td>
<td>21</td>
</tr>
</tbody>
</table>
</span>
</body></html>

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100118a.jpg" align="right" border="0" height="265" width="353"></p>
<p>A lot of data from Japan were released today: Industrial
Production, Operating Rates, Retail and Wholesale Trade, Cash Earnings
and Input and Output prices. All the data, except for the input and
output prices which are for December, are for November,</p>
<p>Input prices in the manufacturing industry have risen and
fallen faster than output prices as shown in the first chart.<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100118b.jpg" style="width: 353px; height: 265px;" align="right" height="265" width="353">
The
swings in the price of oil probably account for much of the greater
volatility in input prices than in output prices. While other factors
influence profits, in the manufacturing industry, the performance of
input and output prices has tended to depress profits.</p>
<p>
One of the other factors influencing profits is employment
cost and here the results for manufacturing are positive. Although the
year to year changes in monthly cash wages have recovered from the big
decline of more than 13% in June they were still 4.2% below the year
ago figure in November, as shown in the second chart</p>
<p>Both industrial production and operating rates continue to
improve from the big year over year decline reached in February of this
year, as can be seen in the third chart. Industrial production, which
had declined 37% from February 2008 to February 2009, was 5.5% below
the year ago figure in November. Comparable figures for operating rates
are 44% and 4.1%.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100118c.jpg" style="width: 312px; height: 265px;" height="265" width="312"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100118d.jpg" style="width: 312px; height: 265px;" height="265" width="353">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>JAPAN&nbsp;
(Y/Y% Changes)</b></th>
<th scope="col"><b>Dec 09</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Sep 09</b></th>
<th scope="col"><b>Aug 09</b></th>
<th scope="col"><b>July 09</b></th>
<th scope="col"><b>June 09</b></th>
<th scope="col"><b>May 09</b></th>
<th scope="col"><b>Apr 09</b></th>
<th scope="col"><b>Mar 09</b></th>
<th scope="col"><b>Feb 09</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Input Prices (Manufacturing)</td>
<td>-3.50</td>
<td>-8.15</td>
<td>-13.40</td>
<td>-17.30</td>
<td>-19.69</td>
<td>-19.30</td>
<td>-17.33</td>
<td>-15.10</td>
<td>-13.68</td>
<td>-7.93</td>
<td>-8.85</td>
</tr>
<tr>
<td class="firstcol">Output Prices (Manufacturing)</td>
<td>-3.68</td>
<td>-5.72</td>
<td>-8.18</td>
<td>-10.38</td>
<td>-11.30</td>
<td>-11.33</td>
<td>-9.21</td>
<td>-7.82</td>
<td>-6.03</td>
<td>-4.54</td>
<td>-8.81</td>
</tr>
<tr class="odd">
<td class="firstcol">Cash Earnings (Manufacturing)</td>
<td>&nbsp;</td>
<td>-4.17</td>
<td>-2.61</td>
<td>-2.79</td>
<td>-4.37</td>
<td>-8.66</td>
<td>-13.27</td>
<td>-5.34</td>
<td>-5.30</td>
<td>-5.88</td>
<td>-5.42</td>
</tr>
<tr>
<td class="firstcol">Industrial Production
(Manufacturing)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>&nbsp;</td>
<td>-5.48</td>
<td>-13.99</td>
<td>-17.28</td>
<td>-18.94</td>
<td>-22.66</td>
<td>-24.63</td>
<td>-27.72</td>
<td>-30.71</td>
<td>-35.02</td>
<td>-36.88</td>
</tr>
<tr class="odd">
<td class="firstcol">Operating Rates&nbsp;
(Manufacturing)</td>
<td>&nbsp;</td>
<td>-4.07</td>
<td>-16.52</td>
<td>-20.04</td>
<td>-20.31</td>
<td>-24.79</td>
<td>-26.93</td>
<td>-32.46</td>
<td>-35.46</td>
<td>-41.15</td>
<td>-44.31</td>
</tr>
<tr>
<td class="firstcol">Wholesale Trade</td>
<td>&nbsp;</td>
<td>-18.75</td>
<td>-24.22</td>
<td>-27.14</td>
<td>-28.04</td>
<td>-29.82</td>
<td>-28.67</td>
<td>-30.35</td>
<td>-27.78</td>
<td>-28.22</td>
<td>-25.74</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Trade</td>
<td>&nbsp;</td>
<td>-1.10</td>
<td>-0.98</td>
<td>-1.35</td>
<td>-1.80</td>
<td>-2.40</td>
<td>-2.91</td>
<td>-2.74</td>
<td>-2.81</td>
<td>-3.80</td>
<td>-5.73</td>
</tr>
</tbody>
</table>
</body></html>

A lot of data from Japan were released today: Industrial Production, Operating Rates, Retail and Wholesale Trade, Cash Earnings and Input and Output prices. All the data, except for the input and output prices which are for December, [...]

Japan Data Show Improvement but Indicators Still Below a Year Ago

Japan Data Show Improvement butIndicators Still Below a Year Ago

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100115i.jpg" style="width: 353px; height: 265px;" align="right">
Improvement
in consumer attitudes continues. The Reuters/University of Michigan
Index of Consumer Sentiment for mid-January ticked up to 72.8 from 72.5
last month. Though the latest figure fell short of Consensus
expectations for a reading of 74.0 it was well improved from the low
last fall. During the last ten years there has been a two-thirds
correlation between the level of sentiment and the three-month change
real consumer spending.</p><p>Sentiment about current economic
conditions increased another 3.8% after its 13.4% jump from November.
The latest was the highest level since March of 2008. Assessments of
current financial conditions improved modestly m/m to the highest since
September of last year. Buying conditions for large household goods,
including furniture, refrigerators, stoves &amp; televisions, also
moved up 4.7% to the highest level since January
2008.</p><p> The mid-January reading on expected economic
conditions fell for the third month in the last four. The 2.0% decline
left it down 8.2% from the September high. The outlook for personal
finances during the next twelve months fell hard to the lowest level
since last March but expectations for business conditions during the
year improved and have more-than doubled since last February.
Expectations for business conditions during the next five years were
unchanged m/m though improved from the 2008 low.</p><p>Expected price
inflation during the next year rose m/m to 3.3% and it was up from the
December 2008 reading of 1.7%.&nbsp;Respondents' view of government
policy, which may eventually influence economic expectations, held
steady following the sharp December decline. Just twelve percent of
respondents thought that a good job was being done by government versus
35% who thought a poor job was being done.</p><p> The
Reuters/University of Michigan survey data are not seasonally adjusted.
The reading is based on telephone interviews with about 500 households
at month-end.&nbsp; These mid-month results are based on about 320
interviews. The summary indexes are in Haver's <b>USECON </b>database
with details in the proprietary <b>UMSCA </b>database.</p><p>
<b>Personal Saving and Economic Growth</b> from the
Federal Reserve bank of St. Louis is available here <a href="http://research.stlouisfed.org/publications/es/09/ES0946.pdf">here</a>.&nbsp;</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100115j.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100115k.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/@EF/@EF14/@EF1402/@EF1402.HTM" style="color: white;"><b>University of Michigan</b></a></th>
<th scope="col"><b>Mid-January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>Jan y/y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Consumer Sentiment</td>
<td>72.8</td>
<td>72.5</td>
<td>67.4</td>
<td><span>19.0%</span></td>
<td>66.3</td>
<td>63.8</td>
<td>85.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current Conditions</td>
<td>81.0</td>
<td>78.0</td>
<td>68.8</td>
<td>21.8</td>
<td>69.6</td>
<td>73.7</td>
<td>101.2</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Expectations</td>
<td>67.5</td>
<td>68.9</td>
<td>66.5</td>
<td>16.8</td>
<td>64.1</td>
<td>57.3</td>
<td>75.6</td>
</tr>
</tbody>
</table>
</span></body></html>

Improvement in consumer attitudes continues. The Reuters/University of Michigan Index of Consumer Sentiment for mid-January ticked up to 72.8 from 72.5 last month. Though the latest figure fell short of Consensus expectations for a [...]

Michigan Consumer Sentiment Edges Higher

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100115f.jpg" style="width: 353px; height: 265px;" align="right">For the U.S.
factory sector, 2009 was rough but activity improved as the year went
on. For the year as a whole industrial production fell 9.7% following a
lesser 2008 decline. In June, however, the decline in activity troughed
and since then is up 4.7% helped by an expected 0.6% December increase.
Though the latest gain was all due to a rise in utility output with
arrival of a winter cold snap, factory sector output alone is up 4.6%
from its trough.</p><p> Output of consumer goods rose 0.6% during December.
Production here is up 4.8% from its trough due to a one-third rise in
auto products output and a 4.4% gain in clothing. Computers, video
&amp; audio output lagged with a 2.2% rate of increase during the
last six months while output of appliances, furniture &amp;
carpeting slipped 0.1%. The latter figure, however, shows some
stabilization after an 18.0% full year decline. Business equipment
output rose 0.9% last month (-9.6% y/y) and reversed the November
decline. Moreover, since the June bottom activity has risen
3.2%.</p><p>Capacity utilization rose further to 72.0%, its highest
level since December 2008 but for the year as a whole the utilization
rate dropped to 70.2%. In the factory sector alone utilization held
steady m/m at 68.8% but dropped to 67.0% for the year from 75.0% in
2008. Utilization in the primary metals area has risen sharply to 58.9%
from a 2009 average of 51.0% with the rebound in output. There's also
been rise in utilization in the motor vehicle sector to 52.2% from a
low of 36.8% in June but it was 77.0% in 2005. In rise in utilization
was accompanied by a 0.1% m/m decline in capacity which was part of a
1.0% December-to-December decline.</p><p>The industrial
production data are available in Haver's <b>USECON</b>
database.</p><p><strong>Is the Great Moderation Over? An
Empirical Analysis </strong>from the Federal Reserve Bank of
Kansas City is available&nbsp; <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/pdf/09q4Clark.pdf">here</a>.</p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100115g.jpg" style="width: 312px; height: 265px;">
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100115h.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Industrial
Production (SA,%)</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><b>Total Output</b></td>
<td>0.6</td>
<td>0.6</td>
<td>0.2</td>
<td>-2.1</td>
<td>-9.7</td>
<td>-2.2</td>
<td>1.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;Manufacturing</td>
<td>0.0</td>
<td>0.9</td>
<td>-0.2</td>
<td>-1.9</td>
<td>-11.2</td>
<td>-3.2</td>
<td>1.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Consumer
Goods</td>
<td>0.6</td>
<td>0.0</td>
<td>0.6</td>
<td>0.3</td>
<td>-5.1</td>
<td>-2.6</td>
<td>0.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Business
Equipment</td>
<td>0.9</td>
<td>-0.7</td>
<td>0.6</td>
<td>-9.6</td>
<td>-12.6</td>
<td>-1.1</td>
<td>2.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Construction
Supplies</td>
<td>-2.0</td>
<td>1.5</td>
<td>-1.6</td>
<td>-10.1</td>
<td>-17.7</td>
<td>-6.3</td>
<td>-2.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Materials</td>
<td>0.8</td>
<td>1.2</td>
<td>0.1</td>
<td>-0.2</td>
<td>-10.8</td>
<td>-1.9</td>
<td>2.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Utilities</td>
<td>6.0</td>
<td>-2.4</td>
<td>2.6</td>
<td>-0.8</td>
<td>-2.6</td>
<td>0.3</td>
<td>3.4</td>
</tr>
<tr class="odd">
<td class="firstcol"><b>Capacity Utilization
(%)</b></td>
<td>72.0</td>
<td>71.5</td>
<td>71.0</td>
<td>72.7 (Dec. '08)</td>
<td></td>
<td>77.5</td>
<td>80.6</td>
</tr>
</tbody>
</table>
</span></body></html>

For the U.S. factory sector, 2009 was rough but activity improved as the year went on. For the year as a whole industrial production fell 9.7% following a lesser 2008 decline. In June, however, the decline in activity troughed and [...]

Industrial Output In December Is Lifted By Utilities

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
<br>

<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100115e.jpg" align="left" border="0" height="265" width="353"></p>
<p>Exports in the Euro-Area faltered and fell in November,
dropping for the second month in a row. Even so over three months
export growth is at a strong 16.8% pace and is steadily accelerating.
Imports are at a three month annual rate of 8.5% and also are
accelerating. Despite the relatively better export performance since
exports have dropped for two months running there is concern about
export prospects. With the drop in exports this month as imports
advanced the e-Zone trade surplus naturally receded.</p>
<p>Globally export volume trends are still tuning higher and the
pace appears to be accelerating. In the e-Zone Germany&#8217;s Yr/Yr export
volume performance improved marked between October and November,
improving from a Yr/Yr growth rate of -14% to -3%. The UK (an EU
country) and Japan also made substantial improvements in that period.
US trade made its surge earlier, from August to September.</p>
<p>But for the Zone as a whole exports are not so clearly on
better footing even though they are improving on trend. It could be
that the Zone countries are simply improving at different speeds and
that prevents the overall assessment from improving as rapidly as in
the individual large G-10 countries where exports appear to be doing
much better.</p>
<p>The trends continue to favor positive appraisals of e-Zone
trade but the last two months&#8217; exports have raised some concerns.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="6" scope="col">Euro-Area
TradeTrends For Goods </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">m/m%</td>
<td colspan="3">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Nov-09</td>
<td>Oct-09</td>
<td>3M</td>
<td>6M</td>
<td>12M</td>
</tr>
<tr>
<td class="firstcol">Balance*</td>
<td>&#8364;&nbsp; 3,926 </td>
<td>&nbsp;&#8364;&nbsp;&nbsp; 4,726 </td>
<td>&nbsp;&#8364;&nbsp;&nbsp; 4,142 </td>
<td>&nbsp;&#8364;&nbsp;&nbsp; 3,610 </td>
<td>&nbsp;&#8364;&nbsp;&nbsp; 1,098 </td>
</tr>
<tr class="odd">
<td colspan="6">Exports</td>
</tr>
<tr>
<td class="firstcol">All Exp</td>
<td>-0.4%</td>
<td>-0.1%</td>
<td>16.8%</td>
<td>10.8%</td>
<td>-9.3%</td>
</tr>
<tr>
<td class="firstcol">Food and Drinks</td>
<td>--</td>
<td>-1.8%</td>
<td>-1.9%</td>
<td>-5.9%</td>
<td>-13.4%</td>
</tr>
<tr>
<td class="firstcol">Raw materials</td>
<td>--</td>
<td>4.0%</td>
<td>29.7%</td>
<td>17.2%</td>
<td>-6.3%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>--</td>
<td>1.7%</td>
<td>24.2%</td>
<td>6.5%</td>
<td>-16.3%</td>
</tr>
<tr class="odd">
<td colspan="6">IMPORTS</td>
</tr>
<tr>
<td class="firstcol">All IMP</td>
<td>0.3%</td>
<td>-1.0%</td>
<td>8.5%</td>
<td>5.7%</td>
<td>-16.1%</td>
</tr>
<tr>
<td class="firstcol">Food and Drinks</td>
<td>--</td>
<td>-5.3%</td>
<td>-16.4%</td>
<td>-14.2%</td>
<td>-11.8%</td>
</tr>
<tr>
<td class="firstcol">Raw materials</td>
<td>--</td>
<td>1.5%</td>
<td>82.1%</td>
<td>12.9%</td>
<td>-32.9%</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>--</td>
<td>-1.6%</td>
<td>-3.0%</td>
<td>-4.6%</td>
<td>-18.2%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">*Eur mlns;
mo or period
average; Gray shaded areas lag one month</td>
</tr>
</tbody>
</table>
</body></html>

Exports in the Euro-Area faltered and fell in November, dropping for the second month in a row. Even so over three months export growth is at a strong 16.8% pace and is steadily accelerating. Imports are at a three month annual rate [...]

EMU Trade Surplus Shrinks

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

Service Health

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

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

260109G17.jpg

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.

260109H17.jpg

260109I17.jpg

- 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

260109E.jpg

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.

260109.jpg

**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.

Germany

German Industrial Production Perks Up-Surprise!

Andrew Cates

**Global growth**
This first chart below highlights a still-fragmented global growth picture, with momentum and current activity levels varying markedly across economies. India stands out at the top-left of the chart, combining a very strong composite PMI reading with some recent cooling in momentum, suggesting activity remains robust even as growth rates moderate. Brazil and Spain sit at another end of the spectrum, pairing solid expansionary PMI levels with strong positive three-month momentum, signalling accelerating activity into year-end. By contrast, much of continental Europe — including France, Germany and Italy — remains clustered close to the 50 threshold, with modest (or no) improvements in momentum and only tentative signs of underlying expansion, underscoring the euro area’s sluggish growth backdrop. The US occupies a middle ground by remaining in expansionary territory, but recent momentum has softened, consistent with a gradual cooling rather than a downturn. Overall, the chart reinforces the message that while global growth remains positive, it is neither synchronised nor particularly strong.


260108Z1.jpg

**Supply chain pressures and inflation surprises**
The NY Fed’s Global Supply Chain Pressure Index has remained subdued in recent months, reinforcing the view that supply-side frictions are no longer a material source of inflation risk. After the extreme dislocations of 2021–22, the index has settled close to, and at times below, its long-run average, consistent with largely normalised delivery times, inventories and transportation costs. The latest reading for December 2025, however, does point to some marginal tightening in supply-chain conditions, though from very low levels and still well within historical norms. Still, this modest firming has so far coincided with a broadly benign profile for inflation surprises across the G10. While geopolitical risks and trade fragmentation remain medium-term considerations, the current signal from global supply chains continues to point to limited immediate upside pressure on inflation.

260108Z2.jpg

**Policy rate expectations**
In the meantime, policy-rate expectations across the major economies continue to diverge, reflecting differences in inflation dynamics and where central banks sit in their respective cycles. The latest Blue Chip survey of Financial Forecasts points to further easing over the next 12 months in the UK and the US. By contrast, expectations for the euro area and Canada are more subdued, in part because both central banks are already at a more advanced stage of their easing campaigns, leaving less scope for additional near-term adjustment. Australia stands apart, with lingering inflation pressures tempering expectations for rate cuts despite softer growth momentum. Japan, meanwhile, remains at a very different point in the cycle: having only recently begun a less accommodative campaign from ultra-loose policy, it is the sole major economy where forecasters still anticipate modest further policy tightening rather than easing.

260108Z3.jpg

**Venezuela, the oil market and implications**
Venezuela’s outsized share of _world crude oil proved reserves_ — nearly one-fifth of the global total — looms large in market narratives even as its _actual production_ has languished well below historic highs. At the start of 2026, dramatic political and strategic events — including the capture of President Nicolás Maduro by U.S. forces and a tightening U.S. oil blockade that has halted Venezuelan exports — have injected fresh uncertainty into oil markets. While immediate impacts on global prices have been modest amid ample global supplies, geopolitical risk premiums have briefly lifted crude benchmarks, reflecting market sensitivity to potential supply disruptions and future policy shifts. In the short run, sustained low exports and production cuts due to storage constraints could tighten crude balances marginally, but most analysts see limited influence on overall market fundamentals this year. Over the longer term, however, any successful revival of Venezuelan output — contingent on massive investment, infrastructure rehabilitation and changes to sanctions policy — could eventually expand heavy crude availability and weigh on prices, with broader implications for OPEC+ dynamics and energy security in the Western Hemisphere.

260108Z4.jpg

**China’s excess capacity and traded goods price disinflation** 
China’s export sector looks set to remain a key swing factor for the global economy in the year ahead, not least because of persistent surplus manufacturing capacity and weak domestic demand. As the chart illustrates, periods of falling relative export prices have tended to coincide with rising export volumes, highlighting China’s ability — and willingness — to clear excess capacity through external markets. With producer prices still under pressure and policy support focused more on supply than demand, the risk is that excess capacity is once again exported via more aggressive price competition, rather than absorbed domestically. If sustained, this dynamic would reinforce global disinflation forces, intensify competitive pressures on manufacturers elsewhere, and heighten trade tensions, particularly in sectors already sensitive to Chinese overcapacity such as autos, machinery and green technologies. In that sense, China’s export pricing behaviour may prove as important for the global inflation and trade outlook in 2026 as any shift in domestic growth momentum.

260108Z5.jpg

**Public sector indebtedness**
This next chart, drawn up by the IMF, underlines a defining feature of the post-pandemic macro landscape: public debt is not only higher than before Covid, but is set to keep rising — and at a faster pace — with the largest economies doing much of the heavy lifting. The clustering of the biggest bubbles in the upper-right quadrant shows that countries accounting for roughly two-thirds of global GDP have already experienced sizeable increases in debt-to-GDP ratios since 2019 and are projected to see further rises through the second half of the decade. This combination of elevated starting points and ongoing fiscal expansion reflects the persistence of structural pressures — higher interest costs, ageing populations, defence spending and climate-related investment — rather than temporary crisis measures. For the global economy, the implication is a world in which fiscal policy remains active but increasingly constrained, raising difficult questions about debt sustainability, the tolerance for higher real interest rates, and the scope for counter-cyclical fiscal support when the next downturn arrives.

260108Z6.jpg

Over the past few weeks, global financial markets have taken comfort from cooling inflation, resilient earnings and continued upside surprises in the dataflow, with equity markets extending gains as confidence in a soft-landing outcome has firmed. While AI-related optimism was questioned toward the end of last year, amid valuation concerns and uncertainty over near-term payoffs, sentiment has improved again in recent days. Latest business surveys suggest little immediate cause for alarm on the global growth front (chart 1), despite clear signs of divergence across regions. At the same time, there are few near-term inflation concerns evident in the data, with global supply-chain pressures remaining subdued (chart 2). Taken together, these developments leave little immediate challenge to the prevailing outlook for monetary policy, with expectations for further gradual easing across several major economies remaining broadly intact (chart 3). At the same time, geopolitical shocks — most notably the upheaval in Venezuela — have reignited focus on energy market risks and sovereign debt uncertainties, adding complexity to oil price expectations and fiscal trajectories (chart 4). Shifting focus, China’s role also continues to remain pivotal: surplus industrial capacity and competitive export pricing continue to shape global trade and exert disinflationary influence (chart 5). Against this backdrop, public debt levels that are both elevated and still rising in many large economies underscore the structural imbalances that could limit policy flexibility and amplify market sensitivities in the immediate months ahead (chart 6).

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/1jXNsSMGpl60LzAx0fmibN?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Cooling Inflation, Diverging Growth

Sandy Batten

260108N1.jpg

260108O1.jpg

Nonfarm business labor productivity (output per hour) exhibited further robust growth in Q3, increasing 4.9% q/q SAAR following an upwardly revised 4.1% quarterly increase in Q2 (previously +3.3%). A quarterly gain of 4.1% was expected by the Action Economics Forecast Survey. Compared to a year ago, productivity rose 1.9% in Q3 versus 1.5% in Q2. Since productivity growth began to accelerate at the beginning of 2023, it has grown at a well above trend 2.7% annual rate. Strong productivity is a key factor for boosting real incomes and restraining inflation pressures going forward.

Nonfarm business output increased 5.4% q/q in Q3 on top of a 5.2% quarterly rise in Q2 while hours worked edged up just 0.5% q/q, down from 1.0% in Q2. Compensation growth picked up to 2.9% q/q in Q3 from a downwardly revised 1.1% q/q in Q2 (previously +4.3%) although compensation growth from a year ago slowed to 3.2% in Q3 from 3.5%. As a result, unit labor costs declined 1.9% q/q in Q3 following a downwardly revised 2.9% quarterly decline in Q2 (previously +1.0%). On a y/y basis, unit labor costs advanced only 1.2% y/y in Q2, the smallest annual gain since Q3 2023.

Growth of factory output slowed to 2.6% q/q in Q3 from 2.9% in Q2. However, hours worked fell 0.7% in Q3 after having been unchanged in Q2. Consequently, factory productivity growth accelerated to 3.3% from 2.9% in Q2. Factory compensation growth picked up to 4.8% q/q in Q3 from 4.0% in Q2, resulting in a pickup in unit labor cost growth to 1.5% from 1.1% in Q2.

The productivity and labor cost data are available in Haver’s **USECON** database. The Action Economics expectations figures are in the **AS1REPNA** database.

260108P1.jpg

260108Q1.jpg

- Nonfarm business output per hour rose 4.9% q/q SAAR in Q3 on top of an upward revision to Q2.
- Compensation increased 2.9% in Q3 resulting in a 1.9% quarterly decline in unit labor costs.

Economy in Brief

Jump to:

German Investors More Cautious On The General Outlook But Still See Improvement In The Profit Outlook

Misery Reaches Highest Since 1983

Misery Reaches Highest Since 1983

Japan Data Show Improvement but Indicators Still Below a Year Ago

Japan Data Show Improvement butIndicators Still Below a Year Ago

Michigan Consumer Sentiment Edges Higher

Industrial Output In December Is Lifted By Utilities

EMU Trade Surplus Shrinks