Tom Moeller

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<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.
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.
<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.
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.
<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.
The unemployment insurance
claims data is available in Haver's WEEKLY database
and the state data is in the REGIONW database.
 The
minutes to the latest meeting of the Federal Open Market
Committee can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20091216.pdf">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a ;=";" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM" style="color: black;">Unemployment Insurance (000s)</a></th>
<th scope="col">1/1/10</th>
<th scope="col">12/25/09</th>
<th scope="col">12/18/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>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>

Euro-Nowhere Man Retail Sales In
Europe Are Going Nowhere - But Not Very Fast 
by <a href="/comment/Brusca.html">Robert
Brusca</a> January 7, 2010


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107d.jpg" align="left" border="0" height="265" width="353">
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
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.
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.
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.
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.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="6" scope="col"> Euro-Area
Retail Sales</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>

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 InsuranceClaims Nudge Higher

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106g.jpg" align="left" border="0" height="265" width="353">
Total orders in the EMU area have fallen m/m in October after
six straight months of increasing. The Yr/Yr drop in orders is a still
substantial 15.2%. Foreign orders Yr/Yr are off by 13.4% while domestic
orders are off by 16.1%. Over three months the Zone&#8217;s domestic orders
are much weaker, falling at a 15.6% pace compared to foreign orders
that are off by just 3.5%. Over six months domestic orders and foreign
orders are up, and foreign orders are up on that span at a 20% annual
rate.
Country detail shows that Germany leads the EMU parade among
large economies. Its orders are still up by 3.5% over three months
despite a dip in October. Still all large EU countries are showing a
fall off in orders growth over three months compared to six months.
In a December report released today the Markit services
indices showed that despite this MFG order weakness in October the
services sector in EMU continued to improve though year-end. The EMU
services sector diffusion index from Markit moved up to 53.63 in Dec.
from 53.04 in Nov. While down on the month France shows the most
strength in the service sector among large EMU members
Still, the MFG sector is the cyclical one and orders data,
though lagging, show that some softening was occurring in October. The
more up-to-date market MFG diffusion surveys show us that MFG progress
has continued though year end but has slowed. EMU is being pulled along
by demand from outside of the region. Export orders continue to be the
driving the EMU expansion. Yet, the EMU currency, the euro, continues
to be high-valued, even if off peak, giving reason to wonder how long
the e-zone will be able to continue to be pulled ahead by its external
sector.

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col"> Euro Area and UK Industrial Orders &amp; Sales Trends</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Saar except m/m</td>
<td style="font-weight: bold;" colspan="3">% m/m</td>
<td style="font-weight: bold;">Oct 09</td>
<td style="font-weight: bold;">Oct 09</td>
<td style="font-weight: bold;">Oct 09</td>
<td style="font-weight: bold;">Oct 08</td>
<td style="font-weight: bold;">Oct 07</td>
<td style="font-weight: bold;">Qtr-2 Date</td>
</tr>
<tr>
<td class="firstcol">Euro Area Detail</td>
<td>Oct 09</td>
<td>Sep 09</td>
<td>Aug 09</td>
<td>3Mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Saar</td>
</tr>
<tr>
<td class="firstcol">MFG Sales</td>
<td>0.3%</td>
<td>-0.8%</td>
<td>2.0%</td>
<td>6.0%</td>
<td>4.8%</td>
<td>-14.2%</td>
<td>-3.0%</td>
<td>6.4%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">
Intermediate</td>
<td>-7.1%</td>
<td>6.7%</td>
<td>-3.3%</td>
<td>-15.6%</td>
<td>8.6%</td>
<td>-16.1%</td>
<td>-3.6%</td>
<td>8.6%</td>
<td>9.2%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="10" class="firstcol">MFG Orders</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-2.2%</td>
<td>1.7%</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>18.3%</td>
<td>-12.2%</td>
<td>-15.2%</td>
<td>8.1%</td>
<td>-5.8%</td>
</tr>
<tr>
<td class="firstcol">E-13 Domestic MFG
orders</td>
<td>-7.1%</td>
<td>6.7%</td>
<td>-3.3%</td>
<td>-15.6%</td>
<td>8.6%</td>
<td>-16.1%</td>
<td>-12.6%</td>
<td>8.8%</td>
<td>-22.3%</td>
</tr>
<tr>
<td class="firstcol">E-13 Foreign MFG
orders</td>
<td>-2.6%</td>
<td>7.2%</td>
<td>-5.1%</td>
<td>-3.5%</td>
<td>20.1%</td>
<td>-13.4%</td>
<td>-17.6%</td>
<td>14.8%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Countries:</td>
<td style="font-weight: bold;">Oct 09</td>
<td style="font-weight: bold;">Sep 09</td>
<td style="font-weight: bold;">Aug 09</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">6mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">Qtr-2 Date</td>
</tr>
<tr>
<td class="firstcol">
Germany:</td>
<td>-2.6%</td>
<td>1.5%</td>
<td>2.5%</td>
<td>5.5%</td>
<td>25.0%</td>
<td>-12.6%</td>
<td>-17.3%</td>
<td>11.3%</td>
<td>-4.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
France:</td>
<td>-9.2%</td>
<td>4.9%</td>
<td>2.7%</td>
<td>-8.5%</td>
<td>5.7%</td>
<td>-9.8%</td>
<td>-16.8%</td>
<td>5.7%</td>
<td>-28.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Italy</td>
<td>0.3%</td>
<td>5.5%</td>
<td>-8.7%</td>
<td>-12.6%</td>
<td>5.9%</td>
<td>-15.4%</td>
<td>-14.6%</td>
<td>5.6%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
UK(EU)</td>
<td>11.4%</td>
<td>1.6%</td>
<td>-11.7%</td>
<td>-0.1%</td>
<td>45.3%</td>
<td>1.0%</td>
<td>-9.0%</td>
<td>4.9%</td>
<td>57.4%</td>
</tr>
</tbody>
</table>
</body></html>

Total orders in the EMU area have fallen m/m in October after six straight months of increasing. The Yr/Yr drop in orders is a still substantial 15.2%. Foreign orders Yr/Yr are off by 13.4% while domestic orders are off by 16.1%. Over [...]

EMU Orders Take A Step Back

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106k.jpg" align="right" border="0" height="265" width="353">
Labor market
improvement is counted as fewer jobs lost and more jobs gained. Both
were indicated for December by the outplacement firm of Challenger,
Grey &amp; Christmas Their measure of job cut announcements fell
last month to 45,094, compared to a high of 241,748 in January of last
year. The latest reading was the least number of layoffs since December
2007. Layoffs moderated in the construction, consumer goods, financial,
health care, retail, services and transportation industries. They rose
in the apparel and in the industrial goods industries.
Challenger also samples firms' hiring plans. During December plans
recouped the November decline and were more than triple the year-ago
level.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106l.jpg" align="right" border="0" height="265" width="353">
Plans picked up sharply in the financial and aerospace/defense
industries but more moderately in the government and insurance
industries. The net of hires less layoffs was near its least 2007.
During the last ten years there has been a 67% (inverse) correlation
between the three-month moving average of announced job cuts and the
three-month change payroll employment. Job cut
announcements differ from layoffs. Many are achieved through attrition,
early retirement or just never occur. The Challenger figures are
available in Haver's SURVEYS database.The
Recession in Perspective from the Federal Reserve Bank of
Minneapolis can be found <a href="http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM" style="color: rgb(0, 0, 0);">Challenger, Gray
&amp; Christmas</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>45,094</td>
<td>50,349</td>
<td>55,679</td>
<td>-72.9%</td>
<td>1,288,030</td>
<td>1,223,993</td>
<td>768,264</td>
</tr>
<tr>
<td class="firstcol">Announced Hiring Plans</td>
<td>35,592</td>
<td>10,076</td>
<td>57,520</td>
<td>253.0</td>
<td>272,573</td>
<td>118,600</td>
<td>365,583</td>
</tr>
</tbody>
</table>
</body></html>

Labor market improvement is counted as fewer jobs lost and more jobs gained. Both were indicated for December by the outplacement firm of Challenger, Grey & Christmas Their measure of job cut announcements fell last month to 45,094, [...]

Challenger Indicates Further Improvement in the Labor Market

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106h.jpg" align="right" border="0" height="265" width="353">
The
nonmanufacturing sector has improved from its worst condition at
year-end 2008 but it has yet to show much expansion. The December
figure from the Institute for Supply Management (ISM) for the service
&amp; construction sectors improved to 50.1 last month
from&nbsp; below the break-even level of 50 during November. The
latest fell just short of Consensus&nbsp; expectations. For the
year as a whole the index reading of 46.3 was the lowest in the series'
history. Since the series' inception in 1997 there has been a 64%
correlation between the level of the composite index in the
nonmanufacturing sector and the q/q&nbsp; change in real GDP for
the services and the construction sectors.
ISM surveys more than 370
purchasing managers in more than 62 industries including law firms,
hospitals, government and retailers. The nonmanufacturing survey dates
back to July 1997. The figures are available in Haver's USECON
database.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106i.jpg" align="right" border="0" height="265" width="353">Amongst
the components, the business activity
index for the service sector moved back above break-even at 53.7 and
that was up sharply from one year ago. Also, the employment index
improved for the second month and was up sharply from its low in
November 2008. Since the series' inception in 1997 there has been an
80% correlation between the level of the ISM nonmanufacturing
employment index and the m/m change in payroll employment in the
service-producing plus the construction industries.&nbsp;Countering
these gains were declines in the new orders and the speed of vendor
deliveries indexes. This latter reading indicates that delivery speeds
quickened. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106j.jpg" align="right" border="0" height="265" width="353">Pricing
power improved for the third straight month, but
just slightly. The pricing index rose m/m to 58.7 and was up sharply
from one year ago. Since its inception ten years ago, there has been a
73% correlation between the price index and the q/q change in the GDP
services chain price index.
 Beginning with the January 2008
Nonmanufacturing <cite>Report On Business</cite>®, the
composite index is calculated as an indicator of the overall economic
condition for the non-manufacturing sector. It is a composite index
based on the diffusion indices of four of the indicators (business
activity, new orders, employment and supplier deliveries) with equal
weights. The latest report from the ISM can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.
News About the Future and Economic Fluctuations
from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q4/brq409_future-and-economic-fluctuations.pdf">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM" style="color: rgb(0, 0, 0);">ISM Nonmanufacturing Survey</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Dec. '08</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Composite Index</td>
<td>50.1</td>
<td>48.7</td>
<td>50.6</td>
<td>40.1</td>
<td>46.3</td>
<td>47.4</td>
<td>53.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Business
Activity</td>
<td>53.7</td>
<td>49.6</td>
<td>55.2</td>
<td>38.9</td>
<td>48.1</td>
<td>47.4</td>
<td>56.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; New
Orders</td>
<td>52.1</td>
<td>55.1</td>
<td>55.6</td>
<td>38.9</td>
<td>48.0</td>
<td>47.0</td>
<td>54.8</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Employment</td>
<td>44.0</td>
<td>41.6</td>
<td>41.1</td>
<td>34.5</td>
<td>40.0</td>
<td>43.8</td>
<td>52.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;
Supplier
Deliveries</td>
<td>50.5</td>
<td>48.5</td>
<td>50.5</td>
<td>48.0</td>
<td>49.0</td>
<td>51.1</td>
<td>51.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Index</td>
<td>58.7</td>
<td>57.8</td>
<td>53.0</td>
<td>36.1</td>
<td>49.4</td>
<td>66.0</td>
<td>63.8</td>
</tr>
</tbody>
</table>






</body></html>

The nonmanufacturing sector has improved from its worst condition at year-end 2008 but it has yet to show much expansion. The December figure from the Institute for Supply Management (ISM) for the service & construction sectors [...]

U.S. ISM Nonmanufacturing Index Improves To Break-Even

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106a.jpg" align="right" border="0" height="265" width="353">
U.S.
unit sales of&nbsp; light vehicles during December
recovered slightly, but by hardly enough to salvage losses earlier in
the year. Sales rose 2.9% m/m to 11.25M units according to the Autodata
Corporation and were slightly stronger than Consensus expectations for
11.0M. To the upside, December sales rose 22.7% from the February '09
low. For the year as a whole, however, sales fell 21.6% from the 2008
average. At 10.37M units vehicle purchases last year were at their
lowest level since 1982. (Seasonal adjustment of these figures is
provided by the U.S. Bureau of Economic Analysis).Sales of domestically
made vehicles rose 3.1% last month to 8.42M units. They now
have recovered by nearly one-third from the February low but for the
year as a whole fell by nearly one-quarter from 2008. Sales of fuel
efficient cars rose 9.1% for the month and have risen by nearly
one-half from the January low. For the year as a whole sales fell
19.8%. Light truck sales slipped 2.0% m/m during December but were
25.8% above the low. For 2009, sales fell 25.2% as gasoline prices
rose.Imported light vehicle sales rose 2.4% from
November to 2.82M and were up 12.4% from the recession low in April.
For 2009 sales fell a lesser 18.3% from the 2008 average. Sales of
imported autos inched up another 0.8% m/m and 12.1% from the low. Sales
for 2009 were 18.2% below 2008 while imported light truck sales rose
5.8% during December and by 12.9% from the low. For all of 2009
imported light trick sales fell 18.5%. Overall,
import's share of the U.S. light vehicle market during
December was roughly stable m/m at 25.1%. It reached a new high of
27.6% during all of last year versus 26.5% during 2008. (Imported
vehicles are those produced outside the United States.) Imports' share
of the U.S. car market totaled 31.5% versus 34.3% during all of last
year, which was up just slightly from 2008, while the share of the
light truck market was 17.8%, down from 19.6% last year and from 18.3%
in 2008.The U.S. vehicle sales figures can be
found in Haver's USECON database.Automotive
Industry Outlook: Understanding the Impact on Workers and Communities
from the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2010/cfljanuary2010_270a.pdf">here</a>.&nbsp;
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106b.jpg" border="0" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106c.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"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED09/@ED0901/@ED0901.HTM%22" style="color: rgb(0, 0, 0);">Light Vehicle Sales
(SAAR, Mil. Units)</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Dec. Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>11.25</td>
<td>10.93</td>
<td>10.46</td>
<td>8.7%</td>
<td>10.37</td>
<td>13.22</td>
<td>16.16</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>6.01</td>
<td>5.65</td>
<td>5.50</td>
<td>13.9</td>
<td>5.46</td>
<td>6.76</td>
<td>7.58</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.11</td>
<td>3.77</td>
<td>3.64</td>
<td>15.8</td>
<td>3.56</td>
<td>4.44</td>
<td>5.06</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.89</td>
<td>1.88</td>
<td>1.87</td>
<td>10.1</td>
<td>1.90</td>
<td>2.32</td>
<td>2.52</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.24</td>
<td>5.28</td>
<td>4.96</td>
<td>0.2</td>
<td>4.91</td>
<td>6.46</td>
<td>8.60</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.31</td>
<td>4.40</td>
<td>4.12</td>
<td>2.6</td>
<td>3.95</td>
<td>5.28</td>
<td>7.10</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>0.93</td>
<td>0.88</td>
<td>0.84</td>
<td>-10.3</td>
<td>0.96</td>
<td>1.18</td>
<td>1.47</td>
</tr>
</tbody>
</table>
</body></html>

U.S. unit sales of light vehicles during December recovered slightly, but by hardly enough to salvage losses earlier in the year. Sales rose 2.9% m/m to 11.25M units according to the Autodata Corporation and were slightly stronger [...]

U.S. Vehicle Sales Improve At YearendBut For 2009 Were The Lowest In Twenty Seven Years

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106d.jpg" align="right" border="0" height="265" width="353">
Though
private sector payrolls fell again last month, the 84,000 worker
decline was the least since March 2008. The latest report from the
payroll processor ADP, in their National Employment Report, indicated
that the December decline in private nonfarm payrolls followed a
145,000 November drop that was less than initially reported. The latest
reading was the twenty-third consecutive monthly decline. For 2009 as a
whole payrolls fell by 4.4% which was the sharpest in the series' brief
eight year history.ADP
compiled the estimate from its database of individual companies'
payroll information. Macroeconomic Advisers, LLC, the St. Louis
economic consulting firm, developed the methodology for transforming
the raw data into an economic indicator.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106e.jpg" align="right" border="0" height="265" width="353">The U.S.
Bureau of Labor
Statistics will report December payroll employment this Friday. For comparison, the November decline of
145,000 in ADP's measure of private nonfarm payrolls was accompanied by
a loss of 18,000 jobs in the BLS measure of private sector payrolls.
According to ADP and Macro-Advisers, the
correlation between the monthly percentage change in the ADP estimate
and that in the BLS data is 0.90.
ADP reported that the decline in service-producing
industry employment
ended last month with a gain of 12,000 (-2.5% y/y). It was the first
rise since March of 2008. Small-sized payrolls grew 11,000 (-2.1% y/y)
while medium-sized payrolls rose 10,000 (-2.7% y/y). These increases
were offset by a 9,000 decline (-2.8% y/y) in large service producing
payrolls.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106f.jpg" align="right" border="0" height="265" width="353">In the
goods
producing sector employment fell 96,000 during December (-12.0% y/y)
and that was deeper than the November drop. Nevertheless, the
three-month annual rate of decline eased again to -6.4% versus -17.3%
at its worst last March. Small-sized payrolls fell 36,000 (-11.9% y/y),
about the same as a 35,000 drop (-11.7% y/y) in medium-sized payrolls.
Large payrolls fell 25,000 (-12.7% y/y). In the manufacturing sector
alone, payrolls fell 43,000 (-11.0% y/y). That was about the same as
the November decline but the three-month change moderated to -4.9% from
-17.4% last March.
&nbsp;The
ADP National Employment Report data is maintained in Haver's USECON
database; historical figures date back to December 2000. The figures in
this report cover only private sector jobs and exclude employment in
the public sector.&nbsp;The
full ADP National Employment Report can be found <a href="http://www.adpemploymentreport.com/pdf/FINAL_Report_December_09.pdf">here
</a>and the
ADP methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf" title="blocked::http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf">here</a>.·&nbsp;Earnings Losses of Job
Losers During the 2001 Economic Downturn from the Federal
Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q4/brq409_earnings-losses-of-job-losers.pdf">here</a>.&nbsp;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM" style="color: rgb(255, 255, 255);">ADP National Employment
Report</a></th>
<th scope="col">December</th>
<th scope="col">November</th>
<th scope="col">October</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Nonfarm Private
Payroll
Employment (m/m Chg., 000s)</td>
<td>-84</td>
<td>-145</td>
<td>-178</td>
<td>-4.2%</td>
<td>-4.4%</td>
<td>-0.5%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Small
Payroll (1-49)</td>
<td>-25</td>
<td>-59</td>
<td>-69</td>
<td>-3.6</td>
<td>-3.8</td>
<td>-0.0</td>
<td>1.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium
Payroll (50-499)</td>
<td>-25</td>
<td>-44</td>
<td>-65</td>
<td>-4.5</td>
<td>-5.0</td>
<td>-0.5</td>
<td>1.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large
Payroll (&gt;500)</td>
<td>-34</td>
<td>-42</td>
<td>-44</td>
<td>-5.0</td>
<td>-5.1</td>
<td>-1.6</td>
<td>-0.1</td>
</tr>
</tbody>
</table>






</body></html>

Though private sector payrolls fell again last month, the 84,000 worker decline was the least since March 2008. The latest report from the payroll processor ADP, in their National Employment Report, indicated that the December decline [...]

ADP Report:U.S. December Payroll Employment Decline Is Smallest Since March 2008

ADP Report:U.S. December PayrollEmployment Decline Is Smallest Since March 2008

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100105l.jpg" width="353">
The Holiday spirit, or perhaps after-Christmas discounts, prompted a surge in spending late in 2009. During the latest week, chain store sales jumped 1.5% from the prior week to lift sales to the highest level since August 2008. The late-year surge raised y/y sales growth to 2.5% which was just below the firmest since the middle of 2008. 
The ICSC-Goldman Sachs retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart. During the last ten years there has been a 69% correlation between the year-to-year growth in chain store sales and the growth in general merchandise retail sales. The weekly figures are available in Haver&#39;s SURVEYW database.
Perhaps heralding the sales improvement was the leading indicator of chain store sales. It slipped marginally early in December but its level was near the highest since January of last year.
This composite leading economic indicator is compiled from four series: (1) the MBA&#39;s volume index of mortgage applications for home purchase (2) the ABC News/Money magazine&#39;s survey of consumer buying conditions (3) new filings for jobless benefits and (4) the 30-year government bond yield.
The Current State of the Economy and a Look to the Future (With Reference to William &#145;Sidestroke&#146; Miles, W. Somerset Maugham, Don Ameche and Kenneth Arrow) is the title of yesterday&#39;s speech by Dallas Fed Governor Richard W. Fisher and it can be found <a href="http://dallasfed.org/news/speeches/fisher/2009/fs091110.cfm">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM" style="COLOR: #000000">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">01/01/10</th>
<th scope="col">12/25/09</th>
<th scope="col">12/18/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2009</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>497.6</td>
<td>490.1</td>
<td>488.1</td>
<td>2.5 %</td>
<td>0.1%</td>
<td>1.4%</td>
<td>2.8%</td>
</tr>
</tbody>
</table>


</html>

The Holiday spirit, or perhaps after-Christmas discounts, prompted a surge in spending late in 2009. During the latest week, chain store sales jumped 1.5% from the prior week to lift sales to the highest level since August 2008. The [...]

Weekly Chain Store Sales Improve Sharply

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.

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**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

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**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.

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- 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

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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.

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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.