Tom Moeller

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202a.jpg" align="right" border="0" height="265" width="353">It's the same story as in
prior months, only
more-so. October construction spending was unchanged after revisions
lowered earlier months' activity. September outlays now are reported
down 1.6%, double last months' estimate. Consensus estimates had been
for a slight uptick in October activity.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202b.jpg" align="right" border="0" height="265" width="353">Residential
building activity
did increase 4.4%, but a September gain was revised to a 2.0% decline.
Single-family construction rose 1.9% (-30.7% y/y) for the fifth
consecutive, firm monthly increase. Spending on improvements also
firmed by 8.7% (-7.3% y/y) but September's initially reported 7.2%
increase was revised to a 5.7% decline. Multi-family building continued
down by 2.1% (-43.6% y/y) and was off 55.6% from the January 2007
peak.· Nonresidential building activity fell another 2.5% during
October after a 3.6% September decline that was double the initial
estimate. Since the 2008 peak activity has fallen by 20.6%. Spending in
the food &amp; beverage industry declined 32.5% y/y while
expenditures in the lodging were off by nearly one-half. Commercial
building overall fell 40.0% y/y while office building dropped by more
than one-third. Relatively moderate was the y/y decline in the
education, religious and health care sectors.&nbsp;· Public
construction overall fell a modest 0.4% during October and y/y
expenditures actually rose though tax revenues fell. Building activity
on highways &amp; streets fell just 0.3% m/m (+4.7% y/y) as the
nation's infrastructure received more attention. Public spending on
health care facilities reversed much of the prior month's gain with a
3.2% decline (+12.6% y/y) and building in the education sector rose
1.1% (-0.1% y/y).</p>
<p> The construction put-in-place figures are available
in Haver's <b>USECON </b>database.</p><p> <b>Talking
about Tomorrow&#8217;s Monetary Policy Today</b> from the Federal
Reserve Bank of San Francisco can be found <a href="http://www.frbsf.org/publications/economics/letter/2009/el2009-35.html">
here </a>.</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>Construction
(%)</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>August</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></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>0.0</td>
<td>-1.6</td>
<td>-0.9</td>
<td>-14.4</td>
<td>-6.9</td>
<td>-1.6</td>
<td>6.3</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.3</td>
<td>-3.0</td>
<td>-0.5</td>
<td>-21.9</td>
<td>-11.1</td>
<td>-5.7</td>
<td>5.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>4.2</td>
<td>-2.0</td>
<td>3.1</td>
<td>-23.6</td>
<td>-29.1</td>
<td>-19.7</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-2.5</td>
<td>-3.6</td>
<td>-2.9</td>
<td>-20.6</td>
<td>13.2</td>
<td>23.1</td>
<td>16.2</td>
</tr>
<tr>
<td class="firstcol">Public</td>
<td>-0.4</td>
<td>0.9</td>
<td>-1.7</td>
<td>3.8</td>
<td>5.6</td>
<td>13.1</td>
<td>9.3</td>
</tr>
</tbody>
</table>
</span>
</body></html>

It's the same story as in prior months, only more-so. October construction spending was unchanged after revisions lowered earlier months' activity. September outlays now are reported down 1.6%, double last months' estimate. Consensus [...]

U.S. Construction Flat In October With Downward Revisions To Prior Months

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202i.jpg" align="right" border="0" height="265" width="353">
The
outplacement firm of Challenger, Grey &amp; Christmas indicated
that job cut announcements fell last month to 50,349, compared to a
high of 241,748 in January of this year. The latest reading was the
least number of layoffs since December 2007. Layoffs have moderated
sharply in the apparel, consumer goods, financial, retail, services and
transportation industries. They rose sharply in the health care
industry and moderately in the insurance industry.</p><p>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<em>.</em> Job cut
announcements differ from layoffs. Many are achieved through attrition,
early retirement or just never occur.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202j.jpg" align="right" border="0" height="265" width="353">
These figures are gross layoffs
and do not reflect new hires as do the monthly figures on payroll
employment. At their 2007 low, the latest Challenger figures were then
accompanied by monthly gains in nonfarm payrolls of roughly 160,000.</p><p>
Challenger also provides data on firms' hiring plans. During November
plans fell back to the recession lows after having increased over the
last two months. The net of hires less layoffs nevertheless was near
its least 2007.</p><p>The Challenger figures are available in Haver's <b>SURVEYS</b>
database.</p><p> <b>The Recession in Perspective</b> from the
Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/">here</a>.</p>
<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);"><b>Challenger, Gray
&amp; Christmas</b></a></th>
<th scope="col"><strong>November</strong></th>
<th scope="col"><strong>October</strong></th>
<th scope="col"><strong>September</strong></th>
<th scope="col"><strong>Y/Y</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
<th scope="col"><strong>2006</strong></th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>50,349</td>
<td>55,679</td>
<td>66,404</td>
<td>-72.3%</td>
<td>1,223,993</td>
<td>768,264</td>
<td>839,822</td>
</tr>
<tr>
<td class="firstcol">Announced Hiring Plans</td>
<td>10,076</td>
<td>57,520</td>
<td>25,047</td>
<td>-9.7</td>
<td>118,600</td>
<td>365,583</td>
<td>273,887</td>
</tr>
</tbody>
</table>
</span></body></html>

The outplacement firm of Challenger, Grey & Christmas indicated that job cut announcements fell last month to 50,349, compared to a high of 241,748 in January of this year. The latest reading was the least number of layoffs since [...]

Challenger Layoffs Move To Lowest Since Late-2007

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202f.jpg" align="right" border="0" height="265" width="353"><b>U.S.
unit sales of&nbsp; light vehicles</b> during November showed
that consumers' interest in making big-ticket purchases is recovering
from the recession lows. Sales rose 4.5% m/m to 10.93M units according
to the Autodata Corporation. November sales were stronger than
Consensus expectations for 10.5M and sales have risen 19.2% from the
February low. (Seasonal adjustment of the figures is provided by the
U.S. Bureau of Economic Analysis).</p><p>Sales of <b>domestically
made vehicles</b> rose 5.4% last month to 8.17M units. They now
have recovered 28.2% from the February low. Sales of fuel efficient
cars rose 3.7% and have risen 27.9% from the low. Light truck sales
increased 6.8% m/m and were 28.4% above the low. · <b>Imported
light vehicle</b> sales rose a modest 1.9% to 2.76M but were up
9.7% from the recession low in April. Sales of imported autos inched up
0.6% m/m and 11.2% from the low while imported light truck sales rose
4.8% and 6.7% from the low.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202g.jpg" align="right" border="0" height="265" width="353">
Overall,<b>
import's share </b>of the U.S. light vehicle market fell to
25.2% last month from 25.9% in October. It reached 26.5% during all of
last year. (Imported vehicles are those produced outside the United
States.) Imports' share of the U.S. car market totaled 33.2% versus
34.3% during all of last year while the share of the light truck market
was 16.7%, down from 18.3% last year.</p><p>The U.S.
vehicle sales figures can be found in Haver's<b> USECON </b>database.</p><p><b>The price of gasoline and the demand for fuel
economy: evidence from monthly new vehicles sales data </b>from
the Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/workingpapers/wp2009_15.pdf">
here</a>.</p>
<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);"><b>Light Vehicle Sales
(SAAR, Mil. Units)</b></a></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>Nov. Y/Y</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">Total</td>
<td>10.93</td>
<td>10.46</td>
<td>9.22</td>
<td>4.9%</td>
<td>13.17</td>
<td>16.16</td>
<td>16.54</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>5.65</td>
<td>5.50</td>
<td>5.02</td>
<td>9.7</td>
<td>6.71</td>
<td>7.58</td>
<td>7.77</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>3.77</td>
<td>3.64</td>
<td>3.25</td>
<td>12.7</td>
<td>4.42</td>
<td>5.07</td>
<td>5.31</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.88</td>
<td>1.87</td>
<td>1.77</td>
<td>4.2</td>
<td>2.29</td>
<td>2.52</td>
<td>2.45</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Light Trucks</td>
<td>5.28</td>
<td>4.96</td>
<td>4.20</td>
<td>0.2</td>
<td>6.47</td>
<td>8.60</td>
<td>8.78</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.40</td>
<td>4.12</td>
<td>3.37</td>
<td>2.6</td>
<td>5.29</td>
<td>7.10</td>
<td>7.42</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>0.88</td>
<td>0.84</td>
<td>0.83</td>
<td>-10.3</td>
<td>1.18</td>
<td>1.47</td>
<td>1.37</td>
</tr>
</tbody>
</table>
</span></body></html>

U.S. unit sales of light vehicles during November showed that consumers' interest in making big-ticket purchases is recovering from the recession lows. Sales rose 4.5% m/m to 10.93M units according to the Autodata Corporation. [...]

U.S. Vehicle Sales Move Slightly Higher During November

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<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202c.jpg" align="right" border="0" height="265" width="353">
Payroll
employment fell again last month, but the rate of decline slowed
further. The latest report from the payroll processor ADP, in their
National Employment Report, indicated that private nonfarm payrolls
fell 169,000 during November. That followed a revised 195,000 October
decline which was shallower than reported initially. The latest reading
was the twenty-second consecutive monthly decline. The monthly drop,
however, was the smallest decline since July of last year and
three-quarters the size of the worst reading last March. The
three-month annualized rate of decline in payrolls also eased to 2.1%
from its March record of 7.1%.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202d.jpg" align="right" border="0" height="265" width="353">
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.</p><p>The U.S. Bureau of
Labor Statistics will report November payroll employment this Friday. For comparison, the October decline of
195,000 in ADP's measure of private nonfarm payrolls was accompanied by
a loss of 190,000 jobs in the BLS measure of private sector payrolls.</p><p>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.</p><p>
ADP reported that the decline in small-sized payrolls moderated to
68,000 (-4.1% y/y). Medium-sized payrolls fell 57,000 (-5.1% y/y) and
large payrolls fell by 44,000 (-5.3% y/y). The decline in
service-producing industry employment continued. The November drop of
81,000 (-2.9% y/y) was the twenty-first consecutive monthly decline but
in percentage terms the three-month rate of change moderated to -1.1%,
less than three-quarters, the worst from January through March. The
decline in medium-sized service payrolls amounted to 30,000 (-3.2% y/y)
and small-sized payrolls declined 32,000 (-2.6% y/y). Large service
producing payrolls decreased 19,000 and the y/y decline eased slightly
to -3.2%.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091202e.jpg" align="right" border="0" height="265" width="353">
In the goods
producing sector employment fell 88,000 during November (-12.6% y/y)
but the October decline was revised shallower. Here, the three-month
rate of decline eased again to -7.3% versus -17.3% at its worst.
Small-sized payrolls fell 36,000 (-12.4% y/y) followed by a 27,000
(-12.6% y/y) drop in medium-sized payrolls. Large payrolls fell 25,000
(-13.0% y/y). In the manufacturing sector alone, payrolls fell 44,000
(-11.8% y/y) but the three-month change moderated to -5.8% from -17.4%
at its worst.</p><p>The
ADP National Employment Report data is maintained in Haver's </p></span><strong>USECON</strong><span class="style1" style="font-family: Verdana; font-size: 10pt;">
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, which rose an average 11,083 during the last twelve
months.
<p></p><p>The full ADP
National Employment Report can be found <a href="http://www.adpemploymentreport.com/pdf/FINAL_Report_November_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>.</p><p>
<b>The Estimated Impact of the American Recovery and
Reinvestment Act on Employment and Economic Output as of September 2009</b>
from the Congressional Budget Office can be found <a href="http://cbo.gov/ftpdocs/106xx/doc10682/11-30-ARRA.pdf">here</a>.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><strong><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB25/@EB25.HTM" style="color: rgb(255, 255, 255);">ADP National Employment
Report</a></strong></th>
<th scope="col"><strong>November</strong></th>
<th scope="col"><strong>October</strong></th>
<th scope="col"><strong>September</strong></th>
<th scope="col"><strong>Y/Y</strong></th>
<th scope="col"><strong>2008</strong></th>
<th scope="col"><strong>2007</strong></th>
<th scope="col"><strong>2006</strong></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Nonfarm Private
PayrollEmployment (m/m Chg., 000s)</td>
<td>-169</td>
<td>-195</td>
<td>-220</td>
<td>-4.7%</td>
<td>-0.5%</td>
<td>1.2%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Small
Payroll (1-49)</td>
<td>-68</td>
<td>-77</td>
<td>-88</td>
<td>-4.1</td>
<td>-0.0</td>
<td>1.6</td>
<td>2.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium
Payroll (50-499)</td>
<td>-57</td>
<td>-70</td>
<td>-78</td>
<td>-5.1</td>
<td>-0.5</td>
<td>1.2</td>
<td>1.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large
Payroll (&gt;500)</td>
<td>-44</td>
<td>-48</td>
<td>-54</td>
<td>-5.3</td>
<td>-1.6</td>
<td>-0.1</td>
<td>0.4</td>
</tr>
</tbody>
</table>
</span></body></html>

Payroll employment fell again last month, but the rate of decline slowed further. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell 169,000 during [...]

ADP Report: U.S. Payroll Employment Decline Moderates Further

U.S. Construction Flat In OctoberWith Downward Revisions To Prior Months

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201i.jpg" align="right" border="0" height="265" width="353">
Home sales
continued to rebound in October, spurred by low interest rates and a
tax credit. The National Association of Realtors (NAR) reported that
October pending home sales increased 3.7%. It was the ninth consecutive
monthly gain and sales are up 41.9% from the low. Consensus
expectations had been for a slight m/m sales decline. The index level
of 114.1 was at its highest since March 2006. The base for the index is
2001=100.</p><p>October sales likely were boosted by the
pending expiration of an $8,000 first-time home buyers tax credit. The
credit has since been extended into next year.</p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201j.jpg" align="right" border="0" height="265" width="353">
Only the Western region
of the country failed to participate in the October sales gain. Sales
reversed the September increase but were still up by nearly one-quarter
from last year. Elsewhere, sales in the Northeast more-than made up a
September decline with a 19.9% jump. Sales in the Midwest rose 11.6% to
the highest level since early-2006. Sales in the South were the
laggards again with just a 5.4% gain but they also were up one-third
from the January trough. </p><p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201k.jpg" align="right" border="0" height="265" width="353">
These home sales figures are analogous to
the new home sales data from the Commerce Department in that they
measure existing home sales when the sales contract is signed, not at
the time the sale is closed. The series dates back to
2001.</p><p>The pending home sales data are available in Haver's <b>PREALTOR
</b>database. The number of homes on the market and prices
are in the <b>REALTOR </b>database.</p><p><b>How
Rigid Are Producer Prices?</b> from the Federal Reserve Bank of
New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr407.pdf">here</a>.</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: white;">Pending Home Sales (2001=100)&nbsp;</a></b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>August</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></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>114.1</td>
<td>110.0</td>
<td>103.8</td>
<td>&nbsp;&nbsp; 31.8%</td>
<td>86.8</td>
<td>95.8</td>
<td>112.1&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>100.2</td>
<td>83.6</td>
<td>85.3</td>
<td>44.2</td>
<td>73.1</td>
<td>85.9</td>
<td>98.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>109.6</td>
<td>98.2</td>
<td>90.8</td>
<td>36.5</td>
<td>80.6</td>
<td>89.5</td>
<td>101.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>115.4</td>
<td>109.5</td>
<td>104.6</td>
<td>31.6</td>
<td>89.6</td>
<td>107.3</td>
<td>127.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>127.7</td>
<td>143.8</td>
<td>130.5</td>
<td>22.0</td>
<td>99.5</td>
<td>92.3</td>
<td>109.6</td>
</tr>
</tbody>
</table>
<p></p>
</span>
</body></html>

Home sales continued to rebound in October, spurred by low interest rates and a tax credit. The National Association of Realtors (NAR) reported that October pending home sales increased 3.7%. It was the ninth consecutive monthly gain [...]

U.S. Pending Home Sales Rise Further

Louise Curley

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201g.jpg" align="right" border="0" height="265" width="353">The
Bundesbank announced today that the Registered unemployment rate in
Germany declined in November to 8.1% from 8.2% in the preceding three
months.&nbsp; At the same time, Eurostat reported harmonized
unemployment rates for October.&nbsp; On that basis, the German
unemployment rate began to decline a month earlier, to 7.5% in October
from 7.6% in September.&nbsp; (Germany's national measure of
unemployment is typically greater than that of the harmonized measure
of Eurostat as can be seen in the first chart.&nbsp; Part of the
difference is due to the fact that the national measure includes only
registered workers while the Eurostat measure includes the whole labor
force. In addition there are differences in the unemployment
concept.)</p>
<p>Except for Japan where the
unemployment rate declined to 5.1% in October from 5.3% in September,
most other industrial countries are still experiencing rises in
unemployment.&nbsp; In addition, the rise in the unemployment rate
in Germany during the recession was more muted than that in other
industrial countries--even Japan--as can be seen in the second
chart.&nbsp; (To insure comparability we have used harmonized
unemployment rates.&nbsp; These may be found in Haver's&nbsp;
EUROSTAT data base.)<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201h.jpg" align="right" border="0" height="265" width="353">
</p>
<p>Germany's lower unemployment rate has
been due largely to the "short-term work program" part of its stimulus
program.&nbsp; To encourage companies to maintain employees when
production falls off, the German government has set up a fund which can
be drawn upon to help pay the wages of the employees who have been kept
on.&nbsp; On November 25, the Cabinet agreed to extend the program
for another year beginning in January.</p>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Sep 09</b></th>
<th scope="col"><b>Aug&nbsp; 09</b></th>
<th scope="col"><b>Jul 09</b></th>
<th scope="col">Jun 09&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany:&nbsp; Registered
Unemployment Rate&nbsp; (%)</td>
<td>8.1</td>
<td>8.2</td>
<td>8.2</td>
<td>8.2</td>
<td>8.3</td>
<td>8.3</td>
</tr>
<tr>
<td colspan="7"><b>Harmonized Unemployment
Rates (%) </b></td>
</tr>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>-</td>
<td>7.5</td>
<td>7.6</td>
<td>7.6</td>
<td>7.6</td>
<td>7.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Japan</td>
<td>-</td>
<td>5.1</td>
<td>5.3</td>
<td>5.5</td>
<td>5.7</td>
<td>5.4</td>
</tr>
<tr class="odd">
<td class="firstcol">France</td>
<td>-</td>
<td>10.1</td>
<td>10.0</td>
<td>9.8</td>
<td>9.7</td>
<td>9.5</td>
</tr>
<tr class="odd">
<td class="firstcol">United States</td>
<td>-</td>
<td>10.2</td>
<td>9.8</td>
<td>9.7</td>
<td>9.4</td>
<td>9.5</td>
</tr>
</tbody>
</table>
</span>
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The Bundesbank announced today that the Registered unemployment rate in Germany declined in November to 8.1% from 8.2% in the preceding three months. At the same time, Eurostat reported harmonized unemployment rates for October. On [...]

German Unemployment Rate Declines

Robert Brusca

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091201f.jpg" align="left" border="0" height="265" width="353"></p>
<p>German retail sales rose in October, reversing a drop in
September, but sales continue to show negative momentum. The sequential
nominal rates of growth from 12-months to 6-months to 3-months all are
clustered around a minus 3% growth rate. For real retail sales the
sequential growth rates show a move to more weakness despite the bump
up in sales in October. Real retail sales sequential growth rates are
getting to be more severe negative numbers.</p>
<p>Only clothing and footwear sales are showing any kind of
strength. Footwear and clothing sales are now up Yr/Yr along with car
registrations. Government programs have skewed spending toward car
purchases by offering incentives. Clothing and footwear are just
beginning to pick up. Still there is nothing upbeat about the German
consumer in this report. The rise in spending in October sure beats a
drop. But trends are not reversed or even blunted by this rise after
two months of steep drops.</p><p></p>
</span>
<b><br>
</b>
<table border="0" cellspacing="0" width="100%">
<colgroup><col></colgroup>
<thead><tr>
<th scope="col" colspan="8"> <b>German
Real and Nominal Retail Sales</b></th>
<th><b>QTR</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol"><b>&nbsp;Nominal</b></td>
<td><b>Oct-09</b></td>
<td><b>Sep-09</b></td>
<td><b>Aug-09</b></td>
<td><b>3-MO</b></td>
<td><b>6-MO</b></td>
<td><b>12-MO</b></td>
<td><b>YrAgo</b></td>
<td><b>Saar</b></td>
</tr>
<tr class="odd">
<td class="firstcol">Retaill Ex auto</td>
<td>0.6%</td>
<td>-0.5%</td>
<td>-0.9%</td>
<td>-3.2%</td>
<td>-3.3%</td>
<td>-2.5%</td>
<td>2.0%</td>
<td>-0.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">MV and Parts</td>
<td>0.5%</td>
<td>-0.2%</td>
<td>-1.5%</td>
<td>-4.8%</td>
<td>-3.0%</td>
<td>-1.7%</td>
<td>0.2%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Food Bev &amp; Tobacco</td>
<td>-1.6%</td>
<td>-3.4%</td>
<td>3.7%</td>
<td>-6.0%</td>
<td>-7.0%</td>
<td>-5.0%</td>
<td>1.4%</td>
<td>-15.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Clothing footwear</td>
<td>8.5%</td>
<td>2.9%</td>
<td>-7.4%</td>
<td>14.5%</td>
<td>9.9%</td>
<td>7.1%</td>
<td>1.6%</td>
<td>56.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Car Registrations (units)</td>
<td>-0.1%</td>
<td>-2.7%</td>
<td>-9.5%</td>
<td>-40.1%</td>
<td>-31.4%</td>
<td>24.0%</td>
<td>-8.3%</td>
<td>0.0%</td>
</tr>
<tr>
<td colspan="9"><b>Real</b></td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Ex auto</td>
<td>0.5%</td>
<td>-0.2%</td>
<td>-1.5%</td>
<td>-4.8%</td>
<td>-3.0%</td>
<td>-1.7%</td>
<td>0.2%</td>
<td>-0.8%</td>
</tr>
</tbody>
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</body></html>

German retail sales rose in October, reversing a drop in September, but sales continue to show negative momentum. The sequential nominal rates of growth from 12-months to 6-months to 3-months all are clustered around a minus 3% growth [...]

German Retail Sales Rise But Amass No Momentum

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

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Andrew Cates

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


260108Z1.jpg

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

260108Z2.jpg

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

260108Z3.jpg

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

260108Z4.jpg

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

260108Z5.jpg

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

260108Z6.jpg

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

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

Charts of the Week: Cooling Inflation, Diverging Growth

Sandy Batten

260108N1.jpg

260108O1.jpg

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

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

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

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

260108P1.jpg

260108Q1.jpg

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

U.S. Productivity Jumped in Q3; Unit Labor Costs Fell

Kathleen Stephansen, CBE

260108A2.jpg

260108B2.jpg

Initial claims for unemployment insurance increased by 8,000 to 208,000 in the week ending January 3, from 200,000 in the week ending December 27, revised from 199,000. The four-week moving average of initial claims was 211,750 in the January 3 week, a decline of 7,250 from 219,000, revised from 218,750 in the December 27 week. The January 3 week four-week average was the lowest level since April 27, 2024.

Federal government employees initially filed 479 (NSA) jobless insurance claims in the week ended December 27, after filing 812 claims in the week ended December 20.

Continuing claims for unemployment insurance rose 56,000 to 1.914 million in the week ending December 27, from 1.858 million in the prior week, revised from 1.866 million. The four-week moving average was 1.893 million in the week ending December 27, from 1.872 million in the December 20 week, revised from 1.873 million. The insured unemployment rate stood at 1.2% in the week of December 27, unchanged from previous week of December 20.

Federal government employees’ continuing benefits claims were 12,161 (NSA) in the week of December 20, down from 13,390 (NSA) in the week ended December 13. 

The insured unemployment rate varied greatly across individual states and territories. In the week ending December 20, the highest unemployment rates were in Washington (2.48%), New Jersey (2.38%), Massachusetts (2.27%), and Minnesota and Rhode Island (both 2.22%). The lowest rates were in Florida (0.26%), North Carolina (0.38%), Alabama and Louisiana (both 0.43%), Virgin Islands (0.46%), Virginia (0.47%), and Georgia (0.49%). Rates in other notable states include New York (1.83%), Illinois (1.81%), Pennsylvania (1.72%), and Texas (1.00%). 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.

260108C2.jpg

260108D2.jpg

- Initial claims rose moderately from the prior week.
- Continuing claims increased from the prior week.
- The insured unemployment rate was unchanged.

U.S. Initial Claims for Unemployment Insurance Rose in Latest Week

260108E.jpg

The EU indexes for December 2025 showed slight slippage as the overall index fell to 96.7 from 97.1 in November for the whole of the European Monetary Union. Sectors showed slippage in consumer confidence and retailing; confidence slipped to -13.1 in December from -12.8 in November as the retail rating slipped to -7 in December from -6 in November. The services sector and the industrial sector were each unchanged on the month, with the industrial reading at a net standing of -9 and the services reading at +6. Improving month-to-month was construction where the index rose to a -1 in December from -2 in November.

**Queue standings of sectors**
The queue (or rank) standings for the overall reading as well as the sector readings largely cluster around the lower one-third of the range of values on data back to 1985, where applicable. Retailing and construction are exceptions, with retailing at an above-median standing at a 51.3 percentile and construction at a solid and strong 81.6 percentile standing in December. The weakest reading is for consumer confidence at the 23.1 percentile standing followed by the industrial sector at a 30.5 percentile standing; services check in at a 37.9 percentile standing. The rank standing for the overall monetary union is at 34.4%, just slightly above the bottom one-third mark for all ranked observations over the period.

**Country results**
18 countries report detail in this survey. Seven of the 18 showed declines in December; this is up substantially from November when five showed declines and compares to October when eight countries showed declines. An unfortunate feature of December is that the headline reading for the monetary union weakens as well as readings for each of the four largest monetary union economies Germany, France, Italy, and Spain.

The two largest monetary union economies, Germany and France, have the weakest rank standings among the BIG4 with Germany at a 15.7 percentile standing and France at a 29.5 percentile standing. Italy and Spain each have standings above the 50% mark placing them above their medians for Italy with a reading of 54.2 percentile, while for Spain it's a 61.2 percentile standing.

**Standings across smaller economics**
Across the remaining monetary union countries, six of the 14 readings are above their 50th percentile, while eight of the 14 are below their 50th percentile. Well, the large countries are experiencing a significant split; the rest of the monetary union appears to be in much the same condition, with approximately half of them performing at above-median conditions and half performing at below-median conditions.

**Country stories**
The chart of the monetary union indexes by sector shows us that there has been little change and little trend in these observations. Across countries Germany has definitely been the weakest country among the BIG4, while Italy has been the strongest. Inflation data have showed inflation beginning to heat up in Spain, and Spain does have the strongest queue standing among the four largest monetary union economies - so that might be something to keep an eye on going forward. Conditions in Germany and France are still quite weak and seem unlikely to force an increase in inflation.

**Smaller economies- some specifics**
And so, the rest of the monetary union economies show tiny Malta, which is hardly a price-maker, has a strong 99.6 percentile standing, followed by 70th percentile standings in Greece and then Lithuania. Portugal and Cyprus have readings in their 60th percentiles. For the most part, these are modest readings but above their medians, of course. Among the weak economies in the rest of the union, the weakest is Belgium with a 16.9 percentile standing, followed by Estonia at a 28.4 percentile standing, Luxembourg at a 32.8 percentile standing, and Austria at a 33-percentile standing. After that, Finland’s standing goes to 37.7 percentile with the Netherlands, Slovakia, and Latvia all with readings in their 40th percentiles indicating moderate undershooting relative to their respective medians.

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**Summing up**
On the whole, the EMU area weakened into 2025 with the large economies turning up weaker numbers than what we'd prefer to see and with sectors split although with the important job creating services sector holding steady for two months after having picked up in November. The recent month-to-month weakness stems from consumer confidence and retailing and we have seen some of that play out in data from Germany where retail sales were unexpectedly weak. Broader concerns about unemployment in the monetary union have not moved excessively. In the consumer survey, unemployment expectations are at 51.9% just slightly above their historic median, a relatively normal reading. The weakest readings on the consumer side are from expectations for the financial situation over the next 12 months and the economic situation over the next 12 months. By country, each of the four largest economies has a consumer confidence percentile standing below its historic median. So the consumer is not poised to lead the monetary union out of the wilderness into growth.

Europe

EU Indexes for EMU Weaken at Year-End

Michael J. Moran

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The November report on Job Openings and Labor Turnover (JOLTs) showed a drop of 4.1% in job openings from a downward revised level in October (revised lower by 2.9%). The combined changes pushed the latest total to the lowest level of the year. Although the latest results were soft, they were not deeply disappointing. Openings in November were still within the range of observations from the past two years, and they were in line with the pre-pandemic averages in 2018 and 2019. The November reading was noticeably firmer than observations before 2018. Scaling by the size of the labor force does not change the picture: November results were in the low end of the recent range, but they were similar to results in 2018-19 and they were firm relative to observations in earlier years.

The easing in job openings in the past few years has led to a drop in the ratio of openings to unemployed individuals. However, recent results for this measure also are respectable relative to historical standards. The current reading of 0.913 trails the average of 1.160 in 2018-19, but the shortfall is moderate, and the results in those years represent a strong standard. This ratio never reached the 1.0 threshold until 2018, and the strongest average before 2018 was 0.878 in 2017. Every year before 2017 showed an even lighter average. 

The still-respectable level of job postings suggests that businesses are seeking workers, but they are being cautious in making offers. The hires rate (the number of new hires relative to employment) fell 0.2 percentage point in November to 3.2%, matching the lowest reading in the current cycle. Moreover, results in the past two years have been noticeably shy of the pre-pandemic norms in 2018-19.

Individuals apparently have noticed the reluctance of businesses to hire, as few are quitting their jobs to seek new opportunities. The quits rate has been range bound since mid-2024 at a level that is well below observations in 2018-19.

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

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- Job openings have eased considerably from the elevated levels seen during the post-pandemic recovery, but they are in line with pre-pandemic norms.
- Businesses are not rushing to fill posted positions.