Louise Curley

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111d.jpg" align="left" border="0" height="265" width="353"></p>
<p>Recession continues in Ireland as Industrial production,
announced today, declined 8.0% from 106.2 (2005=100) in Octoberto 97.7%
in November. Ireland makes a distinction between its traditional
industries and those of relatively recent origin. The "Modern" sector
includes the following NACE industries reproduction of recorded music
(182), manufacture of chemicals and chemical products (20), manufacture
of basic pharmaceutical products and pharmaceutical preparations (21),
manufacture of computers, electronic and optical products (26),
manufacture of electric equipment (27) and medical and dental
instruments and supplies (325). All the rest of the industries make up
the traditional sector.</p>
<p>Month to month production in the Modern Sector has been
volatile but has shown little trend. For instance production in the
Modern sector declined 10.5% in November, but was down only 3.8% from a
year ago. Production in the Traditional sector, on the contrary, has
shown a definite downward trend. Although production in the Traditional
sector was down only 2.2% in November, it was 17.7% below the year ago
level. The attached chart shows total Industrial Production for Ireland
and production in the Modern and Traditional sectors. The relative
stability of production in the Modern Sector and the sharp decline of
production in the Traditional Sector are apparent.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>&nbsp;IRELAND</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Nov&nbsp; 08</b></th>
<th scope="col"><b>M/M % Chg</b></th>
<th scope="col"><b>Y/Y/% Chg</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial
Production (2005=100)</td>
<td>97.7</td>
<td>106.2</td>
<td>108.0</td>
<td>-8.00</td>
<td>-9.54</td>
<td>106.5</td>
<td>108.3</td>
<td>103.0</td>
</tr>
<tr>
<td class="firstcol">Traditional Sector</td>
<td>84.4</td>
<td>86.3</td>
<td>102.5</td>
<td>-2.20</td>
<td>-17.66</td>
<td>100.3</td>
<td>104.7</td>
<td>101.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Modern Sector</td>
<td>108.2</td>
<td>121.0</td>
<td>112.6</td>
<td>-10.50</td>
<td>-3.82</td>
<td>111.2</td>
<td>111.0</td>
<td>104.0</td>
</tr>
</tbody>
</table>
</body></html>

Recession continues in Ireland as Industrial production, announced today, declined 8.0% from 106.2 (2005=100) in Octoberto 97.7% in November. Ireland makes a distinction between its traditional industries and those of relatively [...]

Irish Industrial Production: Modern Vs Traditional Sectors

Tom Moeller

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111a.jpg" align="right" border="0" height="265" width="353">Is the
consumer not attempting to borrow or is credit not being extended by
the lender? It's hard to say but the Federal Reserve reported
late-Friday that consumer credit outstanding fell by a record $17.5B
m/m during November following a $4.2B October decline that was revised
slightly deeper from the initial report. The latest was the fourteenth
monthly drop since summer 2008. Moreover, the 3.9% y/y pullback in
credit outstanding set another historic record as consumers retrenched
and took account of debt-laden personal balance sheets along with job
market deterioration. Consumer credit outstanding as a percentage of
disposable income fell to 22.1% from its 2005 high of 24.7%.
Nevertheless, these rates remain up from the low near 16% in
1992.</p>
<p>Usage of non-revolving credit (autos &amp; other
consumer durables), which accounts for nearly two-thirds of the total,
fell $3.8B after a $3.2B October increase. The 0.6% y/y decline
reflected a 13.2% drop in pools of securitized assets, an 11.2% decline
in finance company lending and a 7.2% drop in nonfinancial business
credit extensions. These were mostly offset by the federal government
&amp; Sallie Mae which expanded lending by more than two-thirds y/y
and commercial bank lending which rose 1.1%. The latter figure,
however, was down from 13% growth early in 2008.</p>
<p>Revolving credit
usage fell a record $13.7B during November as part of a pullback that
began late in 2008. The latest was part of a 9.3% y/y decline which
also was by far a record. Versus November 2009, finance companies
lowered lending by 37.9%, commercial bank lending fell 9.8%, pools of
securitized assets fell 5.8%, savings institutions pulled back 3.9%
y/y. Loans from credit unions offset some of these declines with a 6.2%
increase.</p>
<p> These figures are the major input to the Fed's quarterly
Flow of Funds accounts for the household sector.</p>
<p>Credit data are
available in Haver's <b>USECON</b> database. The Flow of
Funds data are in Haver's <b>FFUNDS</b> database.</p>
<p><b>Why
Are Banks Holding So Many Excess Reserves? </b>from the Federal
Reserve Bank of New York is available here <a href="http://www.newyorkfed.org/research/current_issues/ci15-8.pdf">here</a>.&nbsp;</p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111b.jpg" border="0" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111c.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Consumer
Credit Outstanding (m/m Chg, SAAR)</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b>&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-17.5B</td>
<td>&nbsp;$-4.2B</td>
<td>$-8.9B</td>
<td>-3.9%</td>
<td>1.6%</td>
<td>5.6%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-13.7B</td>
<td>$-7.3B</td>
<td>$-8.0B</td>
<td>-9.3%</td>
<td>1.9%</td>
<td>7.8%</td>
<td>5.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-3.8B</td>
<td>$3.2B</td>
<td>$-1.0B</td>
<td>-0.6%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</span>
</body></html>

Is the consumer not attempting to borrow or is credit not being extended by the lender? It's hard to say but the Federal Reserve reported late-Friday that consumer credit outstanding fell by a record $17.5B m/m during November [...]

U.S. Consumer Credit Usage Decline Reaches Historic Proportion

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111a.jpg" align="right" border="0" height="265" width="353">Is the
consumer not attempting to borrow or is credit not being extended by
the lender? It's hard to say but the Federal Reserve reported
late-Friday that consumer credit outstanding fell by a record $17.5B
m/m during November following a $4.2B October decline that was revised
slightly deeper from the initial report. The latest was the fourteenth
monthly drop since summer 2008. Moreover, the 3.9% y/y pullback in
credit outstanding set another historic record as consumers retrenched
and took account of debt-laden personal balance sheets along with job
market deterioration. Consumer credit outstanding as a percentage of
disposable income fell to 22.1% from its 2005 high of 24.7%.
Nevertheless, these rates remain up from the low near 16% in
1992.</p>
<p>Usage of non-revolving credit (autos &amp; other
consumer durables), which accounts for nearly two-thirds of the total,
fell $3.8B after a $3.2B October increase. The 0.6% y/y decline
reflected a 13.2% drop in pools of securitized assets, an 11.2% decline
in finance company lending and a 7.2% drop in nonfinancial business
credit extensions. These were mostly offset by the federal government
&amp; Sallie Mae which expanded lending by more than two-thirds y/y
and commercial bank lending which rose 1.1%. The latter figure,
however, was down from 13% growth early in 2008.</p>
<p>Revolving credit
usage fell a record $13.7B during November as part of a pullback that
began late in 2008. The latest was part of a 9.3% y/y decline which
also was by far a record. Versus November 2009, finance companies
lowered lending by 37.9%, commercial bank lending fell 9.8%, pools of
securitized assets fell 5.8%, savings institutions pulled back 3.9%
y/y. Loans from credit unions offset some of these declines with a 6.2%
increase.</p>
<p> These figures are the major input to the Fed's quarterly
Flow of Funds accounts for the household sector.</p>
<p>Credit data are
available in Haver's <b>USECON</b> database. The Flow of
Funds data are in Haver's <b>FFUNDS</b> database.</p>
<p><b>Why
Are Banks Holding So Many Excess Reserves? </b>from the Federal
Reserve Bank of New York is available here <a href="http://www.newyorkfed.org/research/current_issues/ci15-8.pdf">here</a>.&nbsp;</p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111b.jpg" border="0" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111c.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Consumer
Credit Outstanding (m/m Chg, SAAR)</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b>&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-17.5B</td>
<td>&nbsp;$-4.2B</td>
<td>$-8.9B</td>
<td>-3.9%</td>
<td>1.6%</td>
<td>5.6%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-13.7B</td>
<td>$-7.3B</td>
<td>$-8.0B</td>
<td>-9.3%</td>
<td>1.9%</td>
<td>7.8%</td>
<td>5.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-3.8B</td>
<td>$3.2B</td>
<td>$-1.0B</td>
<td>-0.6%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">Irish Industrial Production:
Modern Vs Traditional Sectors</span><br>
<span id="byline">by <a href="/comment/Curley.html">Louise
Curley
</a> January 11, 2010</span>
<span id="articletext">
<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111d.jpg" align="left" border="0" height="265" width="353"></p>
<p>Recession continues in Ireland as Industrial production,
announced today, declined 8.0% from 106.2 (2005=100) in Octoberto 97.7%
in November. Ireland makes a distinction between its traditional
industries and those of relatively recent origin. The "Modern" sector
includes the following NACE industries reproduction of recorded music
(182), manufacture of chemicals and chemical products (20), manufacture
of basic pharmaceutical products and pharmaceutical preparations (21),
manufacture of computers, electronic and optical products (26),
manufacture of electric equipment (27) and medical and dental
instruments and supplies (325). All the rest of the industries make up
the traditional sector.</p>
<p>Month to month production in the Modern Sector has been
volatile but has shown little trend. For instance production in the
Modern sector declined 10.5% in November, but was down only 3.8% from a
year ago. Production in the Traditional sector, on the contrary, has
shown a definite downward trend. Although production in the Traditional
sector was down only 2.2% in November, it was 17.7% below the year ago
level. The attached chart shows total Industrial Production for Ireland
and production in the Modern and Traditional sectors. The relative
stability of production in the Modern Sector and the sharp decline of
production in the Traditional Sector are apparent.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>&nbsp;IRELAND</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Nov&nbsp; 08</b></th>
<th scope="col"><b>M/M % Chg</b></th>
<th scope="col"><b>Y/Y/% Chg</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial
Production (2005=100)</td>
<td>97.7</td>
<td>106.2</td>
<td>108.0</td>
<td>-8.00</td>
<td>-9.54</td>
<td>106.5</td>
<td>108.3</td>
<td>103.0</td>
</tr>
<tr>
<td class="firstcol">Traditional Sector</td>
<td>84.4</td>
<td>86.3</td>
<td>102.5</td>
<td>-2.20</td>
<td>-17.66</td>
<td>100.3</td>
<td>104.7</td>
<td>101.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Modern Sector</td>
<td>108.2</td>
<td>121.0</td>
<td>112.6</td>
<td>-10.50</td>
<td>-3.82</td>
<td>111.2</td>
<td>111.0</td>
<td>104.0</td>
</tr>
</tbody>
</table>
<span id="articletitle">French Industrial Output Recovers
Lead By A Rebound In Investment Goods </span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> January 11, 2010</span>
<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111e.jpg" align="left" border="0" height="265" width="353"></p>
<p>French IP is on the mend. Yr/Yr its decline has been reduced
to under a 5% drop, at -3.8%. Over six months IP is expanding at a
growth rate of 6.1%. Output of consumer durable goods is holding back
the recovery although output of consumer durables rose in November.
Auto output surged in November.</p>
<p>France is seeing output rise in Q4 at a very modest annual
rate pace of 0.5%. Consumer durables output is falling at a 7% annual
rate in Q4. Consumer nondurables and capital goods output are creeping
ahead in the new quarter. Intermediate goods output is rising at a
strong 6.3%.</p>
<p>The industrial sector globally is making a strong recovery
from a disastrous drop in the recession. France&#8217;s recovery is about as
advanced as that in any major industrial country. Still it has lost
some momentum. This recovery continues to go in fits and starts.
France&#8217;s IP advance in November is heartening but it does not turn up
the speed of the expansion in any clear way.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">French IP Excluding
Construction<br>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td>Nov-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter -to-date</td>
</tr>
<tr>
<td class="firstcol">IP total</td>
<td>1.1%</td>
<td>-0.6%</td>
<td>-1.2%</td>
<td>-2.6%</td>
<td>6.1%</td>
<td>-3.8%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Consumer
Dur</td>
<td>1.2%</td>
<td>-1.5%</td>
<td>-3.1%</td>
<td>-12.9%</td>
<td>-9.1%</td>
<td>-11.7%</td>
<td>-7.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Consumer
Ndur</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>1.9%</td>
<td>7.1%</td>
<td>3.1%</td>
<td>-2.2%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Capital</td>
<td>2.4%</td>
<td>-0.8%</td>
<td>-3.1%</td>
<td>-6.0%</td>
<td>12.4%</td>
<td>-0.7%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Intermed</td>
<td>2.1%</td>
<td>0.1%</td>
<td>-1.6%</td>
<td>2.4%</td>
<td>13.9%</td>
<td>-3.7%</td>
<td>6.3%</td>
</tr>
<tr class="grey2">
<td colspan="8" class="firstcol">Memo</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Auto</td>
<td>11.1%</td>
<td>-5.7%</td>
<td>-17.0%</td>
<td>-42.9%</td>
<td>75.5%</td>
<td>18.6%</td>
<td>-18.6%</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Consumer Credit Usage DeclineReaches Historic Proportion

Robert Brusca

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108e.jpg" align="left" border="0" height="265" width="353"></p>
<p>The OECD trend-adjusted leading indicators are showing strong
increases compared to past business cycles. The chart shows that
Europe, Japan, and the US have not been as synchronous and stronger
since the expansion from the 1973-75 recession. The expansion from the
1981-82 recession was stronger (at least eventually) for the US but it
took Japan until very late in the cycle to get stronger and Europe
never did show the strength in that cycle that it is showing now, while
it is still early in the cycle. Japan is not yet hitting a home run;
its LEI rise (which is positive over six-months) is still small, but it
also lagged in the recovery from the recession of 1981-82.</p>
<p>On balance the OECD data are impressive. They point to a
recovery in progress. Push the pessimists aside. The main industrial
economies are leading the way forward. It is important to look at the
trends a to not get to caught up in the month to month numbers which
always ebb and flow but whose natural ebb and flow seems more daunting
when the economy is still sputtering.</p>
<p>What we learn in looking at the these indicators and these
various economies&#8217; monthly releases is how much the stock markets
remains priced for good news but bond markets continue to mark jagged
paths as they go from fearing strong growth and inflation to showing
disappointment over current indicators that fall short of robustness.
This sort of back and forth is very much the usual way of things early
in economic recoveries. This recovery is so early in fact that the
label &#8216;recovery&#8217; has yet to be made official by the recession-dating
arbiters.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="5" scope="col"> <b>OECD
Trend-Restored Leading Indicators</b></th>
</tr>
</thead>
<tbody>
<tr style="font-weight: bold;" class="odd">
<td colspan="5" class="firstcol">Growth
Progression-SAAR</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">3Mos</td>
<td style="font-weight: bold;">6Mos</td>
<td style="font-weight: bold;">12mos</td>
<td style="font-weight: bold;">Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>11.4%</td>
<td>13.7%</td>
<td>6.3%</td>
<td>-9.7%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>12.2%</td>
<td>14.4%</td>
<td>5.7%</td>
<td>-10.4%</td>
</tr>
<tr>
<td class="firstcol">OECD.Euro-Area</td>
<td>12.4%</td>
<td>14.9%</td>
<td>8.5%</td>
<td>-11.0%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>10.8%</td>
<td>12.1%</td>
<td>0.7%</td>
<td>-9.8%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>12.2%</td>
<td>14.2%</td>
<td>4.9%</td>
<td>-10.1%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="5" class="firstcol">Six month
readings at
6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Recent six</td>
<td style="font-weight: bold;">6Mo Ago</td>
<td style="font-weight: bold;">12Mo Ago</td>
<td style="font-weight: bold;">18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>13.7%</td>
<td>-0.7%</td>
<td>-14.9%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>14.4%</td>
<td>-2.4%</td>
<td>-15.9%</td>
<td>-4.6%</td>
</tr>
<tr>
<td class="firstcol">OECD.Eur</td>
<td>14.9%</td>
<td>2.5%</td>
<td>-15.2%</td>
<td>-6.5%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>12.1%</td>
<td>-9.6%</td>
<td>-16.7%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>14.2%</td>
<td>-3.7%</td>
<td>-15.9%</td>
<td>-3.9%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol">Slowdowns
indicated by
BOLD RED</td>

</tr>
</tbody>
</table>
</body></html>

The OECD trend-adjusted leading indicators are showing strong increases compared to past business cycles. The chart shows that Europe, Japan, and the US have not been as synchronous and stronger since the expansion from the 1973-75 [...]

OECD LEIs Are Surging Especially Strong Is The Euro-Area

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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108a.jpg" align="right" border="0" height="265" width="353"></p>
<p>The latest jobs report was disappointing for those who hoped
for improved momentum in hiring, but diminishing weakness continued as
the predominant message. The Bureau of Labor Statistics reported that
nonfarm payrolls fell 85,000 last month after a 4,000 November increase
(revised from -11,000) and a 127,000 October decline (revised from
(-111,000). Together, the three-month average decline of 69,000 was the
smallest of the recent recession. Consensus expectations has been for
no change in December payrolls.</p>
<p>For 2009 as a whole, payrolls declined by 5.0 million, by far
the worst decline since WWII. To emphasize the message of a weak labor
market, the percentage term drop of 3.7% y/y also was the weakest of
the postwar period, edging out a 3.6% decline in 1945.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108b.jpg" align="right" border="0" height="265" width="353">
The payroll employment decline was accompanied by a stable
unemployment rate at 10.0%. Nevertheless, the latest was not far below
the postwar record of 10.8% reached late in 1982. For the year as a
whole the unemployment rate of 9.3% also was just below the record.
Last month, household sector employment fell a hard 589,000 (-3.8% y/y)
following a modest November increase. The decline was accompanied by a
661,000 shrinkage in the labor force (-1.0% y/y). This y/y decline was
the largest since early 1951. The number of individuals not in the
labor force rose a whopping 843,000 (4.2% y/y) with 6,306,000 (14.4%
y/y) who want a job now. (The household survey included modest
benchmark revisions.)</p>
<p>Elsewhere in the household survey of employment, the
unemployment rate including marginally attached workers and those
working part-time for economic reasons held near its high at 17.3%. For
the year as a whole this measure stood at 16.3% versus 10.6% last year
and 8.3% in 2007. The number of job losers on temporary layoff ticked
up 10,000 (0.5% y/y) following huge declines during the prior two
months. The number on permanent layoff fell by 275,000 (+57.2% y/y).
Another measure compromising the employment picture was a rise in the
median duration of unemployment to a record-high 20.5 weeks. The
percent of those unemployed for more than 27 weeks rose to 39.8%.</p>
<p>In the establishment survey, the decline in service sector
hiring of 4,000 owed to a 21,000 drop (-0.3% y/y) in government hiring.
The number of private service sector jobs rose a modest 17,000 (-2.0%
y/y) after a larger November increase.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108c.jpg" align="right" border="0" height="265" width="353">
For the year employment here
fell by 2.6 million (-2.8% y/y). Professional &amp; business
services jobs rose 50,000 during December (-3.1% y/y) while
administrative &amp; support jobs rose 42,400 (-3.9% y/y). That
included a 46,500 (-7.0% y/y) rise in temporary help services
employment which was the fifth consecutive monthly increase. Financial
activities employment rose 4,000 (-3.9% y/y) following declines that
steadily diminished earlier this year. Factory sector employment fell
again last month, by 27,000, which compares to -262,000 last January.
For the year as a whole factory sector jobs fell by 1.4 million and by
a record 10.7%. Construction employment fell another 53,000 and by
nearly one million for 2009 as a whole (-13.5% y/y), also by far the
record.</p>
<p>The diffusion index for private nonfarm payrolls ticked lower
to 40.0% last month but remained double the low of last March. For the
factory sector, the index ticked up m/m to 39.8%. It had fallen to a
low of 6.0% last January. These indexes are harbingers of future
payroll levels.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108d.jpg" align="right" border="0" height="265" width="353">
The length of the average workweek, often a harbinger of
future employment, held steady at 33.2 weeks, its highest level since
February. The workweek in the factory sector also held steady m/m at
40.4 weeks but the figure has been rising since a May low.</p>
<p>Average hourly earnings increased 0.2% after an upwardly
revised November increase. The 2.9% gain for the year as a whole was
its weakest since 2004. Earnings in the factory sector increased 0.3%
and by 2.6% for the year. The durable sector's earnings rose 3.4% y/y
while earnings in the private service sector rose a diminished 3.1%.
Construction sector earnings rose 3.4% y/y though that was up from 1.2%
growth in 2005.</p>
<p>The figures referenced above are available in Haver's <b>USECON</b>
database. Additional detail can be found in the <b>LABOR </b>and
in the <b>EMPL</b> databases.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Employment:
000s</b></th>
<th scope="col"><b>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">Payroll Employment</td>
<td>-85</td>
<td>4</td>
<td>-127</td>
<td>-3.1%</td>
<td>-3.7</td>
<td>-0.4%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-11</td>
<td>-111</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp;
Manufacturing</td>
<td>-27</td>
<td>-35</td>
<td>-48</td>
<td>-9.9</td>
<td>-10.7</td>
<td>-3.3%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; &nbsp;
Construction</td>
<td>-53</td>
<td>-27</td>
<td>-56</td>
<td>-13.7</td>
<td>-13.5</td>
<td>-5.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp; Service
Producing</td>
<td>-4</td>
<td>62</td>
<td>-18</td>
<td>-1.6</td>
<td>-2.2</td>
<td>0.2%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.2</td>
<td>33.2</td>
<td>33.0</td>
<td>33.3 (Dec. '08)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3%</td>
<td>2.2%</td>
<td>2.9</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>10.0%</td>
<td>10.0%</td>
<td>10.1%</td>
<td>7.4% (Dec. '08)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

The latest jobs report was disappointing for those who hoped for improved momentum in hiring, but diminishing weakness continued as the predominant message. The Bureau of Labor Statistics reported that nonfarm payrolls fell 85,000 [...]

U.S. December Payroll Decline Is Modest Disappointment; 2009 Is Weakest Year Since WWII

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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108a.jpg" align="right" border="0" height="265" width="353"></p>
<p>The latest jobs report was disappointing for those who hoped
for improved momentum in hiring, but diminishing weakness continued as
the predominant message. The Bureau of Labor Statistics reported that
nonfarm payrolls fell 85,000 last month after a 4,000 November increase
(revised from -11,000) and a 127,000 October decline (revised from
(-111,000). Together, the three-month average decline of 69,000 was the
smallest of the recent recession. Consensus expectations has been for
no change in December payrolls.</p>
<p>For 2009 as a whole, payrolls declined by 5.0 million, by far
the worst decline since WWII. To emphasize the message of a weak labor
market, the percentage term drop of 3.7% y/y also was the weakest of
the postwar period, edging out a 3.6% decline in 1945.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108b.jpg" align="right" border="0" height="265" width="353">
The payroll employment decline was accompanied by a stable
unemployment rate at 10.0%. Nevertheless, the latest was not far below
the postwar record of 10.8% reached late in 1982. For the year as a
whole the unemployment rate of 9.3% also was just below the record.
Last month, household sector employment fell a hard 589,000 (-3.8% y/y)
following a modest November increase. The decline was accompanied by a
661,000 shrinkage in the labor force (-1.0% y/y). This y/y decline was
the largest since early 1951. The number of individuals not in the
labor force rose a whopping 843,000 (4.2% y/y) with 6,306,000 (14.4%
y/y) who want a job now. (The household survey included modest
benchmark revisions.)</p>
<p>Elsewhere in the household survey of employment, the
unemployment rate including marginally attached workers and those
working part-time for economic reasons held near its high at 17.3%. For
the year as a whole this measure stood at 16.3% versus 10.6% last year
and 8.3% in 2007. The number of job losers on temporary layoff ticked
up 10,000 (0.5% y/y) following huge declines during the prior two
months. The number on permanent layoff fell by 275,000 (+57.2% y/y).
Another measure compromising the employment picture was a rise in the
median duration of unemployment to a record-high 20.5 weeks. The
percent of those unemployed for more than 27 weeks rose to 39.8%.</p>
<p>In the establishment survey, the decline in service sector
hiring of 4,000 owed to a 21,000 drop (-0.3% y/y) in government hiring.
The number of private service sector jobs rose a modest 17,000 (-2.0%
y/y) after a larger November increase.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108c.jpg" align="right" border="0" height="265" width="353">
For the year employment here
fell by 2.6 million (-2.8% y/y). Professional &amp; business
services jobs rose 50,000 during December (-3.1% y/y) while
administrative &amp; support jobs rose 42,400 (-3.9% y/y). That
included a 46,500 (-7.0% y/y) rise in temporary help services
employment which was the fifth consecutive monthly increase. Financial
activities employment rose 4,000 (-3.9% y/y) following declines that
steadily diminished earlier this year. Factory sector employment fell
again last month, by 27,000, which compares to -262,000 last January.
For the year as a whole factory sector jobs fell by 1.4 million and by
a record 10.7%. Construction employment fell another 53,000 and by
nearly one million for 2009 as a whole (-13.5% y/y), also by far the
record.</p>
<p>The diffusion index for private nonfarm payrolls ticked lower
to 40.0% last month but remained double the low of last March. For the
factory sector, the index ticked up m/m to 39.8%. It had fallen to a
low of 6.0% last January. These indexes are harbingers of future
payroll levels.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108d.jpg" align="right" border="0" height="265" width="353">
The length of the average workweek, often a harbinger of
future employment, held steady at 33.2 weeks, its highest level since
February. The workweek in the factory sector also held steady m/m at
40.4 weeks but the figure has been rising since a May low.</p>
<p>Average hourly earnings increased 0.2% after an upwardly
revised November increase. The 2.9% gain for the year as a whole was
its weakest since 2004. Earnings in the factory sector increased 0.3%
and by 2.6% for the year. The durable sector's earnings rose 3.4% y/y
while earnings in the private service sector rose a diminished 3.1%.
Construction sector earnings rose 3.4% y/y though that was up from 1.2%
growth in 2005.</p>
<p>The figures referenced above are available in Haver's <b>USECON</b>
database. Additional detail can be found in the <b>LABOR </b>and
in the <b>EMPL</b> databases.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Employment:
000s</b></th>
<th scope="col"><b>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">Payroll Employment</td>
<td>-85</td>
<td>4</td>
<td>-127</td>
<td>-3.1%</td>
<td>-3.7</td>
<td>-0.4%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-11</td>
<td>-111</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp;
Manufacturing</td>
<td>-27</td>
<td>-35</td>
<td>-48</td>
<td>-9.9</td>
<td>-10.7</td>
<td>-3.3%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; &nbsp;
Construction</td>
<td>-53</td>
<td>-27</td>
<td>-56</td>
<td>-13.7</td>
<td>-13.5</td>
<td>-5.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp; Service
Producing</td>
<td>-4</td>
<td>62</td>
<td>-18</td>
<td>-1.6</td>
<td>-2.2</td>
<td>0.2%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.2</td>
<td>33.2</td>
<td>33.0</td>
<td>33.3 (Dec. '08)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3%</td>
<td>2.2%</td>
<td>2.9</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>10.0%</td>
<td>10.0%</td>
<td>10.1%</td>
<td>7.4% (Dec. '08)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
<span id="articletitle">OECD LEIs Are Surging Especially
Strong Is The Euro-Area</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> January 8, 2010</span>
<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108e.jpg" align="left" border="0" height="265" width="353"></p>
<p>The OECD trend-adjusted leading indicators are showing strong
increases compared to past business cycles. The chart shows that
Europe, Japan, and the US have not been as synchronous and stronger
since the expansion from the 1973-75 recession. The expansion from the
1981-82 recession was stronger (at least eventually) for the US but it
took Japan until very late in the cycle to get stronger and Europe
never did show the strength in that cycle that it is showing now, while
it is still early in the cycle. Japan is not yet hitting a home run;
its LEI rise (which is positive over six-months) is still small, but it
also lagged in the recovery from the recession of 1981-82.</p>
<p>On balance the OECD data are impressive. They point to a
recovery in progress. Push the pessimists aside. The main industrial
economies are leading the way forward. It is important to look at the
trends a to not get to caught up in the month to month numbers which
always ebb and flow but whose natural ebb and flow seems more daunting
when the economy is still sputtering.</p>
<p>What we learn in looking at the these indicators and these
various economies&#8217; monthly releases is how much the stock markets
remains priced for good news but bond markets continue to mark jagged
paths as they go from fearing strong growth and inflation to showing
disappointment over current indicators that fall short of robustness.
This sort of back and forth is very much the usual way of things early
in economic recoveries. This recovery is so early in fact that the
label &#8216;recovery&#8217; has yet to be made official by the recession-dating
arbiters.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="5" scope="col"> <b>OECD
Trend-Restored Leading Indicators</b></th>
</tr>
</thead>
<tbody>
<tr style="font-weight: bold;" class="odd">
<td colspan="5" class="firstcol">Growth
Progression-SAAR</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">3Mos</td>
<td style="font-weight: bold;">6Mos</td>
<td style="font-weight: bold;">12mos</td>
<td style="font-weight: bold;">Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>11.4%</td>
<td>13.7%</td>
<td>6.3%</td>
<td>-9.7%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>12.2%</td>
<td>14.4%</td>
<td>5.7%</td>
<td>-10.4%</td>
</tr>
<tr>
<td class="firstcol">OECD.Euro-Area</td>
<td>12.4%</td>
<td>14.9%</td>
<td>8.5%</td>
<td>-11.0%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>10.8%</td>
<td>12.1%</td>
<td>0.7%</td>
<td>-9.8%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>12.2%</td>
<td>14.2%</td>
<td>4.9%</td>
<td>-10.1%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="5" class="firstcol">Six month
readings at
6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Recent six</td>
<td style="font-weight: bold;">6Mo Ago</td>
<td style="font-weight: bold;">12Mo Ago</td>
<td style="font-weight: bold;">18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>13.7%</td>
<td>-0.7%</td>
<td>-14.9%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>14.4%</td>
<td>-2.4%</td>
<td>-15.9%</td>
<td>-4.6%</td>
</tr>
<tr>
<td class="firstcol">OECD.Eur</td>
<td>14.9%</td>
<td>2.5%</td>
<td>-15.2%</td>
<td>-6.5%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>12.1%</td>
<td>-9.6%</td>
<td>-16.7%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>14.2%</td>
<td>-3.7%</td>
<td>-15.9%</td>
<td>-3.9%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol">Slowdowns
indicated by
BOLD RED</td>
</tr>
</tbody>
</table>
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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107d.jpg" align="left" border="0" height="265" width="353"></p>
<p>While governments around the world have taken strides to pump
up expenditures to keep economies going the consumer, largely, is still
not on board, at least not in Europe.</p>
<p>Total Euro-Area consumer spending is down by 0.3% in November
after being down in earlier months&#8230;seventeen down months in a row in
fact. Over three months the pace of contraction in Euro-consumer
spending remains about the same as over six months and only a bit less
than over 12-months.</p>
<p>Even motor vehicle registrations that had bumped up on special
government assistance plans across the various Zone countries fell in
off in November. German retailers continue to be hard-hit and to look
for a return of the consumer there.</p>
<p>Overnight Australia reported a 1.4% kick to November sales,
one of the few places besides the US where the consumer seems to be
aware that he has a wallet in his pocket or a purse over the shoulder.</p>
<p>Sustained recovery will require a return of the consumer. Even
in Europe the consumer is large proportion of GDP. Right now Europe
continues to benefit from export led growth; China pushes export led
growth; Japan pushes export-led growth. But for all that to work, the
European consumer, and Japanese consumer will have join in. The
consumer in the US appears to be back in gear but there is not enough
there to feed the global economy with US retail demand. The world
economy needs balance. Other countries must get their consumers in gear
because &#8216;everyone wants&#8217; to sell to the US but &#8216;everyone also wants&#8217;
the US trade deficit to shrink and these two &#8216;everyone wants&#8217; are in
deep conflict with each other. So if &#8216;anyone wants&#8217; logic and
consistency something will have to change.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="6" scope="col"> <b>Euro-Area Retail Sales</b></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>Oct-09</td>
<td>Sep-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>-0.2%</td>
<td>-0.2%</td>
<td>-2.6%</td>
<td>-2.4%</td>
<td>-3.9%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.1%</td>
<td>-2.1%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>0.3%</td>
<td>6.7%</td>
<td>9.6%</td>
<td>3.5%</td>
<td>26.9%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">NonFood Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>0.0%</td>
<td>0.6%</td>
<td>-2.1%</td>
<td>-3.6%</td>
<td>-2.7%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>0.6%</td>
<td>0.4%</td>
<td>2.9%</td>
<td>5.3%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
</body></html>

While governments around the world have taken strides to pump up expenditures to keep economies going the consumer, largely, is still not on board, at least not in Europe. Total Euro-Area consumer spending is down by 0.3% in November [...]

Euro-Nowhere Man Retail Sales In Europe Are Going Nowhere - But Not Very Fast

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107a.jpg" align="right" border="0" height="265" width="353">By the
smallest of margins, the job market deteriorated last week but the
trend continued its recent improvement. The Labor Department reported
that initial claims for jobless insurance ticked up 1,000 to open the
New Year at 434,000. Claims stand at the lowest level since late in
August, 2008 and were down from the recession peak of 674,000 hit last
March. Consensus expectations has been for 440,000. The four-week
moving average of initial claims also fell to a new cycle-low of
450,250.</p>
<p>Continuing claims for unemployment insurance during the
latest week again fell sharply. The 179,000 drop was part of a nearly
one-third decline since late-June. Continuing claims were at the lowest
level since 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 5,005,750. This series dates back to
1966.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107b.jpg" align="right" border="0" height="265" width="353">Extended
benefits for unemployment insurance
dropped sharply to 296,534 during the third week of December. The
latest was down by one-half&nbsp; from the peak reached during
November of 597,688.</p>
<p>The insured rate of unemployment also fell to a
new low of 3.6%. 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.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107c.jpg" align="right" border="0" height="265" width="353">The highest insured
unemployment rates in the week ending December 19
were in Alaska (6.7 percent), Oregon (5.9), Puerto Rico (5.8), Nevada
(5.6), Idaho (5.5), Pennsylvania (5.2), Wisconsin (5.2), Montana (5.1),
Washington (5.1), and Michigan (5.0). The lowest insured unemployment
rates were in Virginia (2.0), North Dakota (2.2%), Texas (2.4), Florida
(3.1), Wyoming (3.3), Maryland (3.4), Ohio (3.4), Maine (3.5), New York
(3.6) and Mississippi (3.7). These data are not seasonally adjusted but
the overall insured unemployment rate is.</p>
<p>The unemployment insurance
claims data is available in Haver's <b>WEEKLY</b> database
and the state data is in the <b>REGIONW</b> database.</p>
<p> The
<b>minutes to the latest meeting of the Federal Open Market
Committee</b> can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20091216.pdf">here</a>.&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;=";" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM" style="color: black;">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b>1/1/10</b></th>
<th scope="col"><b>12/25/09</b></th>
<th scope="col"><b>12/18/09</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>434</td>
<td>433</td>
<td>454</td>
<td>-11.1%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,802</td>
<td>4,981</td>
<td>6.0%</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>3.6</td>
<td>3.8</td>
<td>3.5 (1/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</span>
</body></html>

By the smallest of margins, the job market deteriorated last week but the trend continued its recent improvement. The Labor Department reported that initial claims for jobless insurance ticked up 1,000 to open the New Year at 434,000. [...]

U.S. Initial Jobless Insurance Claims Nudge Higher

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

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Andrew Cates

**The Global Monetary Policy Consensus**
The latest Blue Chip Financial Forecasts survey points to a notably more balanced global monetary policy outlook over the coming year. In contrast to the pronounced easing bias that dominated much of the past two years, expectations are now more symmetric, with a similar number of central banks projected to raise rates as to ease policy. Japan is seen delivering further tightening, while Canada is expected to initiate an interest rate hike in coming months. In Australia’s case, this tightening guidance was reinforced this week, with the Reserve Bank lifting its policy rate by 25 basis points. Elsewhere, and in contrast, the euro area, UK and US are expected to move in the opposite direction.

260205Z1.jpg

**US manufacturing activity**
The second chart underscores the recent improvement in US economic momentum, highlighted by an unexpected surge in the January ISM manufacturing PMI. After spending much of the past year hovering below the 50 threshold consistent with stagnation, the index jumped sharply back into expansionary territory, signalling a renewed pickup in industrial activity. This rebound has coincided with a broader run of stronger-than-anticipated US economic data, as reflected in the upswing in the Citigroup Economic Surprise Index. Together, these developments point to a US economy that continues to display notable resilience, complicating expectations of monetary easing in the near term.

260205Z2.jpg

**US Bank Lending Standards and Financial Stress** 
The next chart turns to US financial conditions, highlighting the latest readings from the Senior Loan Officer Opinion Survey. The net proportion of banks tightening lending standards on corporate loans and mortgages is now more modest by historical standards, and well below the extremes seen during past episodes of financial stress. Some easing in credit headwinds has occurred alongside relatively subdued readings on the OFR Financial Stress Index, which continues to hover below its long-run average. Together, these indicators suggest that the US financial system has continued to avoid the kind of acute stress typically associated with sharp slowdowns in credit availability—helping to underpin the recent resilience in economic activity.

260205Z3.jpg

**Semiconductor Sales**
The fourth chart highlights the renewed surge in global semiconductor sales, with momentum strengthening sharply over recent months across the Americas, China and the broader Asia-Pacific region. After the cyclical downturn in 2022–23, sales have rebounded to fresh highs, reflecting a powerful revival in demand for advanced chips and related technologies. This upswing has taken place amid intense investor preoccupation with artificial intelligence, with expectations that AI adoption will drive a sustained wave of capital spending on data centres, cloud infrastructure and high-performance computing. In contrast, semiconductor sales in Europe remain comparatively subdued, reflecting the region’s smaller footprint in high-end chip manufacturing, weaker industrial demand, and the ongoing impact of slower economic growth. While semiconductors are inherently cyclical, markets have increasingly interpreted the current rebound elsewhere as structural rather than purely cyclical—underpinned by the belief that AI represents a transformative and durable source of demand growth.

260205Z4.jpg

**Large-Scale AI Models**
The next chart illustrates the rapid proliferation of large-scale AI models globally, with newly updated data for 2025 pointing to a further sharp acceleration in development activity. The United States continues to lead by a wide margin, while China has also seen a steep rise in model deployment in recent years, underscoring the intensifying technological competition between the two economies. Growth in the UK and other regions has been more modest by comparison, highlighting the increasingly concentrated nature of AI innovation. Taken together with the surge in semiconductor sales, these trends help explain the market’s strong preoccupation with AI as a potential driver of future productivity and investment cycles—although the geographic concentration of activity also raises questions about the uneven distribution of any resulting economic gains.

260205Z5.jpg

**An AI Bubble?** 
The final chart draws on the latest Blue Chip Financial Forecasts special questions, highlighting market participants’ perceptions of the economic gains likely to be delivered by artificial intelligence. While a sizeable share of respondents still believe that financial markets may be overestimating AI’s potential benefits, an increasing proportion now judge current expectations to be broadly accurate, with only a small minority viewing the gains as underestimated. Notably, this represents a softening in scepticism compared with the survey results from last month, when concerns about excessive market optimism were more pronounced. The shift suggests a growing acceptance that AI-related investment and innovation could translate into meaningful economic impacts—though uncertainty remains high around the scale, timing and distribution of these gains.

260205Z6.jpg

Financial markets have experienced renewed gyrations in recent weeks, as shifting geopolitical risks, questions around Federal Reserve independence, renewed talk of US dollar “debasement,” and ongoing enthusiasm surrounding artificial intelligence have combined to drive volatility across asset classes. These cross-currents have also contributed to a degree of rotation away from high-flying technology stocks, as investors reassess valuations and the timing of anticipated AI-driven gains. Against this backdrop, the charts in this week’s COTW highlight several important themes. Policy rate expectations now appear more balanced globally, marking a clear shift away from the one-sided easing bias of the past two years (chart 1), even as resilient US data—underscored by the unexpected jump in the January ISM index and a run of positive economic surprises—continues to complicate the outlook for monetary easing (chart 2). At the same time, US financial conditions remain relatively benign, with limited evidence of widespread credit stress or aggressive tightening in lending standards (chart 3). Meanwhile, the sharp rebound in semiconductor sales and the accelerating rollout of large-scale AI models underscore why investors remain so focused on the AI narrative, even as Europe lags behind due to weaker industrial momentum and a smaller footprint in advanced chip production (charts 4 and 5). Finally, while some scepticism about AI’s ultimate economic impact persists, the latest survey results suggest a moderation in concerns that markets are materially overestimating its gains (chart 6). Taken together, these developments paint a picture of a US economy that remains more resilient than many had anticipated, set against a financial landscape increasingly shaped by powerful—if sometimes competing—narratives around geopolitics, policy, and technological transformation.

Charts of the Week: Balanced Policy, Resilient Data and AI Narratives

260206E.jpg

With the December report, Germany’s production and some of the early European industrial production data reveal a good deal of chaos in terms of the embedded trends. On the month, German industrial production fell by 1.9%, with consumer goods output up by 0.5%, capital goods output falling by 5.3%, and intermediate goods output falling by 1.2%. Among the early reporters in the monetary union—France, Spain, and Portugal—only Spain showed an increase in manufacturing IP in December; however, Spanish industrial production is notoriously volatile.

**Broader IP trends in Germany and elsewhere in Europe**
As for other early industrial production reporters, both Sweden and Norway showed strong-to-solid gains in December and each of them showed two-months of gains in a row. Beyond that, sequential growth rates from 12-months to six-months to three-months show accelerating growth in German consumer goods output against decelerating growth for intermediate goods. Real manufacturing output and real sales show mixed results- no clear trends; however, real manufacturing orders in Germany are off the map strong. 

**German manufacturing/industrial Surveys**
German industrial surveys from the IFO for manufacturing shows persistent weakening as well as for IFO manufacturing expectations, and in the EU Commission industrial index in the last three months. More broadly, Germany shows some modest but ongoing step up all of these based on average levels from 12-months to six-months to three-months for IFO expectations and the EU Commission industrial readings with mixed results for other survey readings.

**IP trends in Europe**
For the early reporting EMU members France, Spain, and Portugal, who report industrial production trends, each show mixed monthly trends against ongoing decelerations for manufacturing output over the broader sequential periods (12-month, to 6-month, to 3-month). However, for other Europe, Sweden and Norway, manufacturing trends are steadily accelerating on this broader timeline.

**A feeling of ‘Deja- What?’**
These combinations of opposed trends mixed with a lack of trends leave us with this sense of confusion about what's going on in manufacturing. For Germany, the extreme strength in orders is reassuring since orders should be forward-looking rather than backward-looking or even contemporaneous. But orders can also be a fickle series and so we'll have to watch it to see if the trends for German orders hold up.

**Current quarter-What’s been happening now**
In addition, current quarter growth for Germany actually looks quite good with industrial production up 3.7% at an annual rate in the current quarter, led by output increases in manufacturing against a decline in the intermediate goods output. Real orders in the quarter are surging at a 44% growth rate, while real sales in manufacturing only had a 0.1% uptick at an annual rate. The industrial indicators for Germany in the quarter show weakness or flatness with the only exception being IFO manufacturing expectations that advanced by a small amount. The three EMU members who report industrial production data show positive growth in the just-completed quarter except for Portugal where industrial production is falling at a 2.9% rate in the fourth quarter. Sweden and Norway, European countries but not monetary union members, show a strong 22% annual rate gain in Sweden against the 3% annual rate decline in Norway.

260206.jpg

**Rankings**
**How growth rates stack up…**
Moving away from short-term trends, the rankings of growth rates of these various metrics using 12-month growth rates on data back to 2006, show below-median growth rates for German industrial production and all three of its major sectors. All of them have rankings below the 50% mark where the median resides. Germany’s manufacturing output growth rate is below its median as is the growth of real sales; and once again real manufacturing orders break out and show a stunning 90th percentile standing, extremely strong compared to other growth rates on this period.

**Indicator rankings are poor**
However, the survey based industrial indicators for Germany, ranked based on their index levels, are all extremely weak and much weaker than German sector or other German metrics. The strongest indicator reading is the 29th percentile standing for IFO manufacturing expectations while the current ZEW index, IFO manufacturing index, and the EU Commission industrial readings, all reside below their 15th percentile. The survey rankings suggest that industrial sentiment is in much worse shape than activity and growth.

**IP elsewhere in Europe**
However, the growth ranking of manufacturing industrial production for the reporting EMU members and other European members are all quite solid, with percentile standings ranging from the 66th up to the 93rd percentile.

**Summing up**
From these data, Germany emerges as the weak economy compared with historic norms based on industrial production growth and indicator readings. However, there's a glimpse of positivity from the growth of real orders, and at the same time, some concern about ongoing sentiment for manufacturing in Germany as distinct from actual performance.

Germany

German IP Reveals Chaotic Trends

Winnie Tapasanun

260205X15.jpg

260205Y15.jpg

**Total job openings** fell 5.6% m/m (-12.9% y/y) to 6.542 million in December after a downwardly revised 7.0% decline to 6.928 million in November (previously -4.1% m/m; 7.146 million), according to the Job Openings and Labor Turnover Survey. December marked the third consecutive m/m fall and the lowest level since September 2020. The job openings rate declined to 3.9% in December, the lowest since April 2020, from 4.2% in November, remaining below a record-high 7.4% in March 2022. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings. Significantly, the drop in job openings also lowered the **ratio of job openings to unemployed individuals** to 0.872 in December—the lowest since March 2021—from 0.890 in November, down from 1.085 in December 2024 and a pre-pandemic 1.211 in February 2020. A reading of 0.872 implies there were about 0.87 open jobs per unemployed person—indicating fewer openings than unemployed workers. December was the fifth time in six months that this ratio remained below 1.0.

**Private sector job openings** fell 6.8% (-12.5% y/y) to 5.804 million in December after a 6.6% fall to 6.227 million in November, registering the third successive m/m decline and the lowest level since September 2020. The private sector job openings rate fell to 4.1% in December, the lowest since April 2020, from 4.4% in November. The December m/m decline in private sector openings reflected drops of 27.7% (-36.9% y/y) in financial activities, 20.2% (-25.5% y/y) in professional & business services, 14.4% (-5.1% y/y) in trade, transportation & utilities, and 5.2% (-12.4% y/y) in private educational & health services. To the upside, private sector openings in the following categories rose m/m in December: other services (21.1%; 11.0% y/y), mining & lodging (17.6%; 0.0% y/y), information (13.5%; -4.7% y/y), manufacturing (8.5%; 0.5% y/y), leisure & hospitality (7.5%; -17.2% y/y), and construction (2.8%; 42.4% y/y). Meanwhile, government job openings rose 5.3% (-15.6% y/y) in December, the first m/m rise in three months, after a 10.6% drop in November.

**Total hiring** rebounded 3.4% (-1.5% y/y) to 5.293 million in December, the first m/m increase since September, following a 4.6% decrease to 5.121 million in November. The hiring rate edged up to 3.3% in December from 3.2% in November, though it remained below pre-pandemic levels. **Private sector hiring** rose 3.1% (-0.4% y/y) to 4.978 million in December, the third m/m rise in four months, after a 4.0% decline to 4.826 million in November. The private sector hiring rate rose to 3.7% in December from 3.5% in November, the same as in October and September. The December m/m increase in private sector hiring was led by a 32.1% jump (42.3% y/y) in information, followed by gains of 24.0% (-4.6% y/y) in financial activities, 23.5% (0.0% y/y) in mining & lodging, 6.5% (-4.8% y/y) in private educational & health services, 4.2% (-4.9% y/y) in trade, transportation & utilities, 3.6% (6.1% y/y) in construction, 3.4% (7.9% y/y) in leisure & hospitality, and 1.8% (-4.3% y/y) in manufacturing. To the downside, private sector hiring in professional & business services (-5.2%; +0.5% y/y) and other services (-4.3%; -16.5% y/y) declined m/m in December. Meanwhile, government hiring rebounded 6.4% (-16.3% y/y) in December, the first m/m rise since September, following a 13.5% drop in November.

**Total separations** rose 2.1% (3.3% y/y) to 5.251 million in December after a 1.5% rise to 5.144 million in November, marking the third m/m increase in four months and the highest level since September. The total separations rate edged up to 3.3% after holding at 3.2% in November and October. Private sector separations rose 1.6% (4.2% y/y) to 4.932 million in December, the highest level since June, while government sector separations jumped 10.4% (-9.1% y/y) to 319,000 following two consecutive m/m declines. **Total quits** (voluntary separations initiated by the employee) increased 0.3% (3.5% y/y) to 3.204 million in December, the third m/m rise in four months and the highest level since June, after a 7.4% rebound in November. The quits rate (a measure of workers’ willingness or ability to leave jobs) held at 2.0% in December and November, slightly below 2.3% in February 2020. Private sector quits eased 0.2% (+4.5% y/y) following an 8.4% November rebound. **Layoffs and discharges** (involuntary separations initiated by the employer) increased 3.6% (5.6% y/y) to 1.762 million in December, up for the third time in four months, after an 8.1% drop in November. The layoffs & discharges rate remained at 1.1% in December and November, marginally below 1.3% in February 2020. Private sector layoffs grew 4.3% (7.8% y/y) following a 7.3% November decrease.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

260205C15.jpg

260205D15.jpg

- Job openings down 5.6% (-12.9% y/y) to 6.542 mil., third straight m/m decline.
- Hiring up 3.4% (-1.5% y/y) to 5.293 mil., first m/m increase since September.
- Separations rise to a three-month high; quits reach a six-month high; layoffs rebound.

U.S. JOLTS: Openings Drop to Lowest Level Since Sept. ’20; Hiring Rebounds in December

Sandy Batten

260205A2.jpg

260205B2.jpg

Initial claims for unemployment insurance jumped 22,000 to 231,000 in the week ended January 31 following an unrevised 209,000 in the prior week. The four-week average rose to 212,250 from 206,250. The Action Economics Forecast Survey looked for 213,000 claims to have been filed. Winter Storm Fern and the accompanying very cold temperatures could have provided a temporary boost. Historically speaking, claims remain at low levels.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—increased by 25,000 to 1.844 million in the week ending January 24, from a downwardly revised 1.819 million in the prior week (previously 1.827 million). The insured unemployment rate remained at 1.2% in the week of January 24, unchanged from the previous eight weeks.

The insured unemployment rate varied greatly across individual states and territories. In the week ending January 17, the highest unemployment rates were in Rhode Island (2.83%), New Jersey (2.77%), Massachusetts (2.67%), Washington (2.54%), and Minnesota (2.45%). The lowest rates were in Florida (0.30%), North Carolina (0.42%), Louisiana (0.43%), Alabama (0.46%), and Arkansas (0.47). Rates in other notable states include Illinois (2.15%), California, (2.08%), New York (2.02%), Pennsylvania (1.91%), and Texas (1.09%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.

260205C2.jpg

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- New claims jumped 22,000 to 231,000, the highest level since December 6.
- Continuing claims rose to 1.844 million from 1.819 million.

U.S. Initial Unemployment Claims Surged in Latest Week

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German real orders in December adjusted for inflation rose strongly again, gaining 7.8% month-to-month after rising 5.7% month-to-month in November. Foreign orders were up by 5.6% in December compared to 5.2% in November. Domestic orders surged by 10.7% in December after rising 6.4% in November and 10% in October.

**Real sales**
Real sales were mixed in December with overall sales falling 1.4% month-to-month mostly on weakness in capital goods sales.

**Broad categorical acceleration**
Many flows are accelerating this month. Sequential growth rates show acceleration. Total real orders accelerate from a year ago, to the current year, to six-months, and to three-months. Sales growth rates for consumer goods, consumer nondurables, and intermediate goods all show accelerations in gear. The exceptions are foreign orders that are not as strong over six months compared to their 12-month growth. And on the sales side, consumer durables sales and capital goods sales are weak.

**Quarter-to-quarter**
Quarterly annualized growth is complete for Q4 with this report. Foreign orders are the ‘weak flow’ expanding at a 13.6% annual rate – certainly not a weak growth rate. But domestic real orders are up at an astounding 101.9% annual rate. The net impact on the total real orders growth is to lift it to a pace of 44.1%. 

**Order ranking is very strong**
The table provides two rankings: one based on the level of variables and the other based on its year-on-year growth. The rankings this month for real orders overall, foreign, and domestic orders all reside in their top 80th to 90th percentiles- extremely strong based on level or growth. Sales do not follow suit. This gives us some reason to suspect that there is some lumpiness involved in the manufacturing data as distinct from strength. That will be something to watch. Overall mining and manufacturing sales growth is essentially at its historic median at a rank of 49.8. However, capital goods, intermediate goods and manufacturing sales all have rankings at or above their medians - as high as a 61-percentile standing for capital goods.

**Industrial confidence**
Industrial confidence for Germany, France, Italy and Spain (the EU’s big-four economies) show rankings based on these survey levels that are much lower at the 11th percentile for Germany, the 42nd and 36th percentiles, for France and Italy, respectively. Spain scores better with a 61.8 percentile standing on its industrial confidence measure. 

On balance, there is now an accelerating profile that is broad in sales trends and especially strong order trends. Perhaps Europe, under the pressure to stimulate its miliary capabilities, has a core of demand to help drive output ahead more consistently. This is something to watch in the coming months.

Economy in Brief

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