Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112d.jpg" align="left" border="0" height="265" width="353">
MFG IP in the e-Zone rose in September laying a foundation for
continued economic recovery. Over three months the annual rate of IP
growth is now 1.9% compared to flat over six months and lower by 13.8%
over 12-months. 
 

To be sure the lift off in IP is less than in indicators such
as the Markit MFG PMI index or the jump in orders. But it takes longer
for actual output to be put to work than for indicators of improvement
to show progress. The large countries are showing more rapid increases
in growth than is EMU as a whole. 
 

For Germany three-month growth is up at an 18.7% annual rate;
that is surpassed by the ever volatile results from Spain that
skyrocketed at a 29% pace over three months. France is up at an 8%
pace; Italy is up at a 4% pace. EU member the UK is lagging as it has
MFG IP up at a tiny 0.5% pace over three-months. For this group
six-month growth rates are all positive and the three-month results
show acceleration compared to six months. Over 12-months IP in all
countries still is falling rapidly, at a double-digit pace. 
 

By industry the consumer sector continues to lag. Consumer
durables output is off on the month and over three months it is down by
-2.1% countered by a three-month rise of 1.6% in consumer nondurables
output. Capital goods output is up at a 6.6% pace over three-months.
Intermediate goods output is flying at a 13% annual rate of expansion
as commodities and raw goods lead the cycle 
 

These figures confirm the trend we already have seen.
Consumers are lagging and raw goods are rising strongly. Investment is
picking up. Still consumer sentiment is one of the stronger barometers
for EMU even though consumer spending and the output of consumer goods
has been lagging. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" colspan="11">
E-zone
MFG IP</th>
</tr>
</thead>
<tbody>
<tr class="grey5">
<td class="firstcol">Saar
except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey4">
<td class="firstcol" style="white-space: nowrap;">Ezone
Detail</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Jul 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>12Mo</td>
<td>Q-3</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG</td>
<td>0.3%</td>
<td>0.3%</td>
<td>-0.1%</td>
<td>1.9%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>-2.3%</td>
<td>-13.8%</td>
<td>-16.5%</td>
<td> 0.9%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Consumer</td>
<td ="">0.3%</td>
<td>-0.4%</td>
<td>0.5%</td>
<td>1.4%</td>
<td>-0.8%</td>
<td>1.7%</td>
<td>-0.6%</td>
<td>-3.2%</td>
<td>-4.9%</td>
<td> 1.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">C-Durables</td>
<td>-6.0%</td>
<td>5.2%</td>
<td>0.6%</td>
<td>-2.1%</td>
<td>8.3%</td>
<td>-10.7%</td>
<td>-4.2%</td>
<td>-19.2%</td>
<td>-15.0%</td>
<td>--</td>
</tr>
<tr class="grey3">
<td class="firstcol">C-Non-durables</td>
<td>1.1%</td>
<td>-1.1%</td>
<td>0.4%</td>
<td>1.6%</td>
<td>-1.9%</td>
<td>3.4%</td>
<td>0.4%</td>
<td>-0.8%</td>
<td>-3.4%</td>
<td>--</td>
</tr>
<tr class="grey3">
<td class="firstcol">Intermediate</td>
<td>0.6%</td>
<td>1.0%</td>
<td>1.4%</td>
<td>13.0%</td>
<td>13.4%</td>
<td>10.7%</td>
<td>7.3%</td>
<td>-16.6%</td>
<td>-19.6%</td>
<td> 14.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Capital</td>
<td>1.7%</td>
<td>1.4%</td>
<td>-1.4%</td>
<td>6.6%</td>
<td>0.5%</td>
<td>3.0%</td>
<td>0.2%</td>
<td>-18.7%</td>
<td>-22.2%</td>
<td> 2.1%</td>
</tr>
<tr class="grey2">
<td colspan="11" class="firstcol">Main
E-zone Countries and UK IP in MFG</td>
</tr>
<tr class="grey5">
<td class="firstcol">&nbsp;</td>
<td colspan="3">
Mo/Mo</td>
<td> Sep 
09</td>
<td> Aug 
09</td>
<td> Sep 
09</td>
<td> Aug 
09</td>
<td> Sep 
09</td>
<td> Aug 
09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey4">
<td class="firstcol">MFG
Only</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Jul 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>12Mo</td>
<td>Q:3 
Date</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany:</td>
<td>3.2%</td>
<td>2.1%</td>
<td>-1.0%</td>
<td>18.4%</td>
<td>7.1%</td>
<td>14.9%</td>
<td>9.6%</td>
<td>-14.3%</td>
<td>-19.2%</td>
<td> 15.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol" style="">France:IPx
Construct'n</td>
<td>-1.5%</td>
<td>2.8%</td>
<td>0.7%</td>
<td>8.0%</td>
<td>15.5%</td>
<td>6.3%</td>
<td>7.2%</td>
<td>-10.4%</td>
<td>-10.0%</td>
<td> 12.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy</td>
<td>-5.7%</td>
<td>5.9%</td>
<td>1.1%</td>
<td>4.0%</td>
<td>32.7%</td>
<td>3.0%</td>
<td>5.9%</td>
<td>-16.9%</td>
<td>-13.5%</td>
<td> 12.9%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Spain</td>
<td>0.7%</td>
<td>-3.0%</td>
<td>9.1%</td>
<td>29.2%</td>
<td>47.0%</td>
<td>19.5%</td>
<td>6.9%</td>
<td>-12.4%</td>
<td>-10.6%</td>
<td> 33.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">UK:
EU
member</td>
<td>1.7%</td>
<td>-2.0%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>-4.0%</td>
<td>0.2%</td>
<td>-2.5%</td>
<td>-9.4%</td>
<td>-11.6%</td>
<td> -0.5%</td>
</tr>
</tbody>
</table>
</body></html>

MFG IP in the e-Zone rose in September laying a foundation for continued economic recovery. Over three months the annual rate of IP growth is now 1.9% compared to flat over six months and lower by 13.8% over 12-months. To be sure the [...]

EMU MFG Still Digging Its Way Out

Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112e.jpg" width="353">
The Mortgage Bankers Association indicated that mortgage applications rose 3.2% last week and remained up by nearly one-half from last year. But the overall figure masks conflicting trends between mortgage applications for purchase (down) and for refinance (up).
Applications to purchase a home fell hard for the fifth consecutive week and they are down by one-quarter during the period. The decline, no doubt, partially reflects the expiration of an up-to $8,000 Federal tax credit for first-time homebuyers. The credit, however, was recently extended to April of next year. During the last ten years there has been a 51% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales. The correlation has lessened recently. Applications to refinance mortgages rose solidly last week and were up by one-half from the June low due to declines in interest rates.
The effective interest rate on conventional 15-year mortgages fell last week to 4.61% which is near the recent low and down from the June average of 5.21%. For 30-year mortgages, the rate also fell last week to 5.11% after reaching a high of 5.79% in early-June. Interest rates on 15-year and 30-year mortgages are closely correlated (&gt;90%) with the rate on 10-year Treasury securities. Rates on adjustable one-year mortgages rose to 6.94% last week which was the highest level since November of last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112f.jpg" width="353">
During the last twelve months, the number of fixed-rate mortgage applications has risen 43.0% while the number of adjustable-rate mortgage applications has roughly tripled.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.The figures for weekly mortgage applications are available in Haver&#39;s SURVEYW database.
Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States, 1967&#150;2006 from the Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/research/SR/SR436.pdf">here</a>. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA Mortgage Applications (SA, 3/16/90=100)</a></th>
<th scope="col">11/06/09</th>
<th scope="col">10/30/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>627.5</td>
<td>608.3</td>
<td>47.6%</td>
<td>642.9</td>
<td>652.6</td>
<td>584.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>220.9</td>
<td>250.3</td>
<td>-22.3</td>
<td>345.4</td>
<td>424.9</td>
<td>406.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,998.2</td>
<td>2,693.7</td>
<td>140.2</td>
<td>2,394.1</td>
<td>1,997.9</td>
<td>1,634.0</td>
</tr>
<tr>
<td class="firstcol">15-Year Effective Interest Rate (%)</td>
<td>4.61%</td>
<td>4.67%</td>
<td>5.98% (11/08)</td>
<td>5.9%</td>
<td>6.2%</td>
<td>6.3%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Mortgage Bankers Association indicated that mortgage applications rose 3.2% last week and remained up by nearly one-half from last year. But the overall figure masks conflicting trends between mortgage applications for purchase [...]

U.S. Weekly Mortgage Applications Rise Overall But Purchases Slacken

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112a.jpg" align="right" border="0" height="265" width="353">
U.S. job
market continues to improve. That's the message from the Labor
Department's report of another decline last week in initial claims for
jobless insurance. They're down to 502,000 from 514,000 during the
prior week which was revised up from 512,000. The latest figures are
the lowest of this year and are down sharply from the March peak of
674,000 claims. The four-week moving average of claims fell to 519,750
and the latest weekly figure was lower than Consensus expectations for
510,000.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112b.jpg" align="right" border="0" height="265" width="353">
Continuing claims for unemployment insurance during the
latest week fell a sharp 139,000 to the lowest level since mid-March.
The decline reflects the improved job market but may also be a function
of the exhaustion of benefits. Continuing claims provide an indication
of workers' ability to find employment. The four-week average of
continuing claims fell modestly to 5,790,750 and have fallen 14.5% from
their peak. This series dates back to 1966.&nbsp;Extended benefits
for unemployment insurance fell and reversed the prior week's increase.
Through late-October extended benefits averaged 523,061.The insured
rate of unemployment slipped 4.3%, the lowest since mid-March. 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/091112c.jpg" align="right" border="0" height="265" width="353">
The highest insured unemployment
rates in the week ending October 24 were in Puerto Rico (6.4%), Oregon
(5.4), Nevada (5.2), Pennsylvania (4.9), California (4.8), Arkansas
(4.8), Wisconsin (4.8), Alaska (4.8), Michigan (4.5), North Carolina
(4.5), and South Carolina (4.5). The lowest insured unemployment rates
were in North Dakota (1.1%), South Dakota (1.1), Virginia (2.0),
Wyoming (2.6), Maine (2.5), Texas (2.5), Colorado (2.9), Maryland
(3.2), Mississippi (3.5), New York (3.5), Georgia (3.7) and Florida
(3.8).The unemployment insurance claims data is available in Haver's WEEKLY
database and the state data is in the REGIONW
database.The Exchange Rate: What's in It for Prices? from
the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q3/brq309_exchange-rate.pdf">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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">11/07/09</th>
<th scope="col">10/31/09</th>
<th scope="col">10/24/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>502</td>
<td>514</td>
<td>532</td>
<td>-1.4%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>5,631</td>
<td>5,770</td>
<td>43.2%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.3</td>
<td>4.4</td>
<td>3.1 (11/'08)</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

U.S. job market continues to improve. That's the message from the Labor Department's report of another decline last week in initial claims for jobless insurance. They're down to 502,000 from 514,000 during the prior week which was [...]

U.S. Weekly Initial Jobless Insurance Claims Fall Again To 2009 Low

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112a.jpg" align="right" border="0" height="265" width="353">U.S. job
market continues to improve. That's the message from the Labor
Department's report of another decline last week in initial claims for
jobless insurance. They're down to 502,000 from 514,000 during the
prior week which was revised up from 512,000. The latest figures are
the lowest of this year and are down sharply from the March peak of
674,000 claims. The four-week moving average of claims fell to 519,750
and the latest weekly figure was lower than Consensus expectations for
510,000.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112b.jpg" align="right" border="0" height="265" width="353">Continuing
claims for unemployment insurance during the
latest week fell a sharp 139,000 to the lowest level since mid-March.
The decline reflects the improved job market but may also be a function
of the exhaustion of benefits. Continuing claims provide an indication
of workers' ability to find employment. The four-week average of
continuing claims fell modestly to 5,790,750 and have fallen 14.5% from
their peak. This series dates back to 1966.&nbsp;Extended benefits
for unemployment insurance fell and reversed the prior week's increase.
Through late-October extended benefits averaged 523,061.
The insured
rate of unemployment slipped 4.3%, the lowest since mid-March. 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/091112c.jpg" align="right" border="0" height="265" width="353">The
highest insured unemployment
rates in the week ending October 24 were in Puerto Rico (6.4%), Oregon
(5.4), Nevada (5.2), Pennsylvania (4.9), California (4.8), Arkansas
(4.8), Wisconsin (4.8), Alaska (4.8), Michigan (4.5), North Carolina
(4.5), and South Carolina (4.5). The lowest insured unemployment rates
were in North Dakota (1.1%), South Dakota (1.1), Virginia (2.0),
Wyoming (2.6), Maine (2.5), Texas (2.5), Colorado (2.9), Maryland
(3.2), Mississippi (3.5), New York (3.5), Georgia (3.7) and Florida
(3.8).
The unemployment insurance claims data is available in Haver's
WEEKLY
database and the state data is in the REGIONW
database.
The Exchange Rate: What's in It for Prices? from
the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q3/brq309_exchange-rate.pdf">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/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">11/07/09</th>
<th scope="col">10/31/09</th>
<th scope="col">10/24/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>502</td>
<td>514</td>
<td>532</td>
<td>-1.4%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>5,631</td>
<td>5,770</td>
<td>43.2%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.3</td>
<td>4.4</td>
<td>3.1 (11/'08)</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>

 U.S. Weekly Mortgage Applications
Rise Overall But Purchases Slacken 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 12, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112e.jpg" align="left" border="0" height="265" width="353">
The Mortgage Bankers Association indicated that mortgage
applications rose 3.2% last week and remained up by nearly one-half
from last year. But the overall figure masks conflicting trends between
mortgage applications for purchase (down) and for refinance (up).
Applications to purchase a home fell hard
for the fifth consecutive week and they are down by one-quarter during
the period. The decline, no doubt, partially reflects the expiration of
an up-to $8,000 Federal tax credit for first-time homebuyers. The
credit, however, was recently extended to April of next year. During
the last ten years there has been a 51% correlation between the y/y
change in purchase applications and the change in new plus existing
single family home sales. The correlation has lessened recently.
Applications to refinance mortgages rose solidly
last week and were up by one-half from the June low due to declines in
interest rates.
The effective interest rate on conventional 15-year mortgages
fell last week to 4.61% which is near the recent low and down from the
June average of 5.21%. For 30-year mortgages, the rate also fell last
week to 5.11% after reaching a high of 5.79% in early-June. Interest
rates on 15-year and 30-year mortgages are closely correlated
(&gt;90%) with the rate on 10-year Treasury securities. Rates on
adjustable one-year mortgages rose to 6.94% last week which was the
highest level since November of last year.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112f.jpg" align="right" border="0" height="265" width="353">
During the last twelve months, the number of fixed-rate
mortgage applications has risen 43.0% while the number of
adjustable-rate mortgage applications has roughly tripled.
The Mortgage Bankers Association surveys between 20 to 35 of
the top lenders in the U.S. housing industry to derive its refinance,
purchase and market indexes. The weekly survey covers roughly 50% of
all U.S. residential mortgage applications processed each week by
mortgage banks, commercial banks and thrifts. Visit the Mortgage
Bankers Association site <a href="http://www.mbaa.org">here</a>.The figures for weekly mortgage
applications are available in Haver's SURVEYW
database.
Unequal We Stand: An Empirical Analysis of
Economic Inequality in the United States, 1967&#8211;2006 from
the Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/research/SR/SR436.pdf">here</a>. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYW/@S5/@S5.HTM">MBA
Mortgage Applications (SA, 3/16/90=100)</a></th>
<th scope="col">11/06/09</th>
<th scope="col">10/30/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Market Index</td>
<td>627.5</td>
<td>608.3</td>
<td>47.6%</td>
<td>642.9</td>
<td>652.6</td>
<td>584.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>220.9</td>
<td>250.3</td>
<td>-22.3</td>
<td>345.4</td>
<td>424.9</td>
<td>406.9</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,998.2</td>
<td>2,693.7</td>
<td>140.2</td>
<td>2,394.1</td>
<td>1,997.9</td>
<td>1,634.0</td>
</tr>
<tr>
<td class="firstcol">15-Year Effective Interest Rate
(%)</td>
<td>4.61%</td>
<td>4.67%</td>
<td>5.98% (11/08)</td>
<td>5.9%</td>
<td>6.2%</td>
<td>6.3%</td>
</tr>
</tbody>
</table>
 EMU MFG Still Digging Its Way Out 
by <a href="/comment/Brusca.html">Robert
Brusca </a> November 12, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091112d.jpg" align="left" border="0" height="265" width="353">
MFG IP in the e-Zone rose in September laying a foundation for
continued economic recovery. Over three months the annual rate of IP
growth is now 1.9% compared to flat over six months and lower by 13.8%
over 12-months. 
 

To be sure the lift off in IP is less than in indicators such
as the Markit MFG PMI index or the jump in orders. But it takes longer
for actual output to be put to work than for indicators of improvement
to show progress. The large countries are showing more rapid increases
in growth than is EMU as a whole. 
 

For Germany three-month growth is up at an 18.7% annual rate;
that is surpassed by the ever volatile results from Spain that
skyrocketed at a 29% pace over three months. France is up at an 8%
pace; Italy is up at a 4% pace. EU member the UK is lagging as it has
MFG IP up at a tiny 0.5% pace over three-months. For this group
six-month growth rates are all positive and the three-month results
show acceleration compared to six months. Over 12-months IP in all
countries still is falling rapidly, at a double-digit pace. 
 

By industry the consumer sector continues to lag. Consumer
durables output is off on the month and over three months it is down by
-2.1% countered by a three-month rise of 1.6% in consumer nondurables
output. Capital goods output is up at a 6.6% pace over three-months.
Intermediate goods output is flying at a 13% annual rate of expansion
as commodities and raw goods lead the cycle 
 

These figures confirm the trend we already have seen.
Consumers are lagging and raw goods are rising strongly. Investment is
picking up. Still consumer sentiment is one of the stronger barometers
for EMU even though consumer spending and the output of consumer goods
has been lagging. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" colspan="11">
E-zone
MFG IP</th>
</tr>
</thead>
<tbody>
<tr class="grey5">
<td class="firstcol">Saar
except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey4">
<td class="firstcol" style="white-space: nowrap;">Ezone
Detail</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Jul 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>12Mo</td>
<td>Q-3</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG</td>
<td>0.3%</td>
<td>0.3%</td>
<td>-0.1%</td>
<td>1.9%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>-2.3%</td>
<td>-13.8%</td>
<td>-16.5%</td>
<td> 0.9%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Consumer</td>
<td ="">0.3%</td>
<td>-0.4%</td>
<td>0.5%</td>
<td>1.4%</td>
<td>-0.8%</td>
<td>1.7%</td>
<td>-0.6%</td>
<td>-3.2%</td>
<td>-4.9%</td>
<td> 1.0%</td>
</tr>
<tr class="grey3">
<td class="firstcol">C-Durables</td>
<td>-6.0%</td>
<td>5.2%</td>
<td>0.6%</td>
<td>-2.1%</td>
<td>8.3%</td>
<td>-10.7%</td>
<td>-4.2%</td>
<td>-19.2%</td>
<td>-15.0%</td>
<td>--</td>
</tr>
<tr class="grey3">
<td class="firstcol">C-Non-durables</td>
<td>1.1%</td>
<td>-1.1%</td>
<td>0.4%</td>
<td>1.6%</td>
<td>-1.9%</td>
<td>3.4%</td>
<td>0.4%</td>
<td>-0.8%</td>
<td>-3.4%</td>
<td>--</td>
</tr>
<tr class="grey3">
<td class="firstcol">Intermediate</td>
<td>0.6%</td>
<td>1.0%</td>
<td>1.4%</td>
<td>13.0%</td>
<td>13.4%</td>
<td>10.7%</td>
<td>7.3%</td>
<td>-16.6%</td>
<td>-19.6%</td>
<td> 14.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Capital</td>
<td>1.7%</td>
<td>1.4%</td>
<td>-1.4%</td>
<td>6.6%</td>
<td>0.5%</td>
<td>3.0%</td>
<td>0.2%</td>
<td>-18.7%</td>
<td>-22.2%</td>
<td> 2.1%</td>
</tr>
<tr class="grey2">
<td colspan="11" class="firstcol">Main
E-zone Countries and UK IP in MFG</td>
</tr>
<tr class="grey5">
<td class="firstcol">&nbsp;</td>
<td colspan="3">
Mo/Mo</td>
<td> Sep 
09</td>
<td> Aug 
09</td>
<td> Sep 
09</td>
<td> Aug 
09</td>
<td> Sep 
09</td>
<td> Aug 
09</td>
<td>&nbsp;</td>
</tr>
<tr class="grey4">
<td class="firstcol">MFG
Only</td>
<td>Sep 
09</td>
<td>Aug 
09</td>
<td>Jul 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>12Mo</td>
<td>Q:3 
Date</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany:</td>
<td>3.2%</td>
<td>2.1%</td>
<td>-1.0%</td>
<td>18.4%</td>
<td>7.1%</td>
<td>14.9%</td>
<td>9.6%</td>
<td>-14.3%</td>
<td>-19.2%</td>
<td> 15.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol" style="">France:IPx
Construct'n</td>
<td>-1.5%</td>
<td>2.8%</td>
<td>0.7%</td>
<td>8.0%</td>
<td>15.5%</td>
<td>6.3%</td>
<td>7.2%</td>
<td>-10.4%</td>
<td>-10.0%</td>
<td> 12.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy</td>
<td>-5.7%</td>
<td>5.9%</td>
<td>1.1%</td>
<td>4.0%</td>
<td>32.7%</td>
<td>3.0%</td>
<td>5.9%</td>
<td>-16.9%</td>
<td>-13.5%</td>
<td> 12.9%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Spain</td>
<td>0.7%</td>
<td>-3.0%</td>
<td>9.1%</td>
<td>29.2%</td>
<td>47.0%</td>
<td>19.5%</td>
<td>6.9%</td>
<td>-12.4%</td>
<td>-10.6%</td>
<td> 33.1%</td>
</tr>
<tr class="grey1">
<td class="firstcol">UK:
EU
member</td>
<td>1.7%</td>
<td>-2.0%</td>
<td>0.4%</td>
<td>0.5%</td>
<td>-4.0%</td>
<td>0.2%</td>
<td>-2.5%</td>
<td>-9.4%</td>
<td>-11.6%</td>
<td> -0.5%</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Weekly Initial JoblessInsurance Claims Fall Again To 2009 Low

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111g.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s machinery orders rose by 6% in September. Core
machinery orders spurted by 10.5%. Foreign demand is the whole of the
pickup as domestic orders fell by 5.4% while foreign orders rose by
25.9% both in September.
The three month metrics show that core orders are still not
out of the woods; their three month growth rate is just 2.9% annualized
the same as their six month growth rate. Still these two horizon growth
rates are better than the -21.8% Year-over-year performance. Core
machinery orders are no longer falling but they are not rising very
rapidly.
The same sort of shortfalls exist across countries
Moreover Japan like Germany is benefiting from external
growth. Over three months, foreign demand is up at a 180% annual rate
that is an acceleration from a 60.4% annual rate over six months and
those numbers reverse the 42% drop in foreign demand Yr/Yr. Still,
domestic demand is wanting. Over three months it is up at a 19.9% pace,
better than the -1% rate over six months, and that is an improvement
from the drop of 14.9% Yr/Yr.
On balance Japan&#8217;s orders are on the mend. Even domestic
orders are showing a push into positive territory. But these series are
very volatile and given the volatility the recent domestic growth
figures are not very impressive. Much more impressive is the growth in
foreign orders that seems to be jumpstarting Japan as a whole. 

As the global economy turns to recovery one key challenge is
going to be to see if surplus and deficit countries begin to make
adjustments. Note that Japan and Germany, traditional exporting powers,
continue to get a lot of their stimulus from overseas. China&#8217;s trade
surplus was up this month. How is the US going to keep the lid on its
deficit if everyone else is running surpluses? Large structural trade
imbalances and the persisting investment flows they imply was one of
the main sources of instability in this past cycle. Is anything going
to change?

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" colspan="8">Japan
Machinery Orders</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">m/m %</td>
<td colspan="4">Saar %</td>
</tr>
<tr class="odd">
<td class="firstcol">SA</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>3-Mos</td>
<td>6-Mos</td>
<td>12-Mos</td>
<td>12-Mo Ago</td>
</tr>
<tr>
<td class="firstcol">Total</td>
<td>6.0%</td>
<td>-1.9%</td>
<td>7.5%</td>
<td>56.1%</td>
<td>2.6%</td>
<td>-26.5%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">Core Orders*</td>
<td>10.5%</td>
<td>0.5%</td>
<td>-9.3%</td>
<td>2.9%</td>
<td>2.8%</td>
<td>-21.8%</td>
<td>-3.7%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Total Orders</td>
</tr>
<tr>
<td class="firstcol">Foreign Demand</td>
<td>25.9%</td>
<td>-15.7%</td>
<td>21.8%</td>
<td>180.0%</td>
<td>60.4%</td>
<td>-42.2%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">Domestic demand</td>
<td>-5.4%</td>
<td>7.1%</td>
<td>3.4%</td>
<td>19.9%</td>
<td>-1.0%</td>
<td>-14.9%</td>
<td>-2.8%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">* Excl ships and electric power</td>
</tr>
</tbody>
</table>
</body></html>

Japan’s machinery orders rose by 6% in September. Core machinery orders spurted by 10.5%. Foreign demand is the whole of the pickup as domestic orders fell by 5.4% while foreign orders rose by 25.9% both in September. The three month [...]

Japan Machinery Orders Dig Out

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111c.jpg" align="right" border="0" height="265" width="353">
The Bureau of Labor Statistics reported in its Job Openings
&amp; Labor Turnover Survey (JOLTS) that job availability improved
during September by 2.4% from August. The rise in the number
of job openings followed a 0.6% August uptick that was
revised from the initial report of a slight decline. Despite these
improvements, however, openings were off 25.9% from September of last
year. The series dates back to December 2000.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111d.jpg" align="right" border="0" height="265" width="353">

Factory sector job openings rose sharply for the second
consecutive month but they
remained down 42.4% y/y. The recent rise in the actual
number of construction sector job openings paused last month. Though
still down 59.2% y/y in September, openings were roughly double the
series' low reached in February. The
level of professional &amp; business services job openings posted
its second consecutive monthly gain (-25.2% y/y) and education
&amp; health sectors job openings (-12.3% y/y) reversed most of an
August decline. Openings in retail trade have risen slightly from their
April low (-9.8% y/y) while government sector job openings reflected
reduced tax revenues and fell to a new series' low (-38.1% y/y.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111e.jpg" align="right" border="0" height="265" width="353">

The job openings rate rose slightly from
the series' low reached this summer to 1.9%. These rates were down from
more than 3% in 2007. Recent gains have been led by the factory
&amp; construction sectors. The job openings rate is the
number of job openings on the last business day of the month as a
percent of total employment plus job openings.
The hires rate held steady at 3.1%, up
slightly from the May-June low of 3.0%, and still was nearly the lowest
in the series' short eight year history.The hires rate is the
number of hires during the month divided by employment.The
actual number of hires also was off its low but was still down by 11.0%
year-to-year. Factory sector hiring recently has picked up slightly but
remains off 14.1% y/y while construction sector hiring has moved
sideways since the winter (-3.3% y/y). Leisure &amp; hospitality
industry jobs fell 6.0% to a new series' low (19.8%) as did retail
sector hiring (-19.1%). In the professional &amp; business services
industry hires slipped after two strong monthly gains (-11.2% y/y)
while jobs in the education &amp; health services jobs gave back
the July increase but remained up 3.6% y/y.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111f.jpg" align="right" border="0" height="265" width="353">
The job separations rate remained at the
series' low of 3.3% with the actual number of separations off 11.2%
year-to-year. Separations include quits, layoffs, discharges,
and other separations as well as retirements.
The JOLTS survey dates only to December 2000 but has followed
the movement in nonfarm payrolls, though the actual correlation between
the two series is low.
A description of the Jolts survey and the latest release from
the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/pdf/jolts.pdf">here</a>
and the figures are available in Haver's USECON
database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM" style="color: white;">JOLTS (Job Openings &amp; Labor
&nbsp;Turnover Survey)</a> </th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Sept. '08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td colspan="7">Job Openings, Total&nbsp;&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Rate (%)</td>
<td>1.9</td>
<td>1.8</td>
<td>2.4</td>
<td>2.3</td>
<td>3.1</td>
<td>3.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total (000s)</td>
<td>2,480</td>
<td>2,423</td>
<td>3,346</td>
<td>3,224</td>
<td>4,382</td>
<td>4,606</td>
</tr>
<tr>
<td colspan="7">Hires, Total</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Rate (%)</td>
<td>3.1</td>
<td>3.1</td>
<td>3.3</td>
<td>41.1</td>
<td>46.1</td>
<td>47.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total (000s)</td>
<td>4,010</td>
<td>4,040</td>
<td>4,505</td>
<td>56,486</td>
<td>63,666</td>
<td>64,879</td>
</tr>
</tbody>
</table>
</body></html>

The Bureau of Labor Statistics reported in its Job Openings & Labor Turnover Survey (JOLTS) that job availability improved during September by 2.4% from August. The rise in the number of job openings followed a 0.6% August uptick that [...]

JOLTS: U.S. Job Openings Improved While Hiring Remains Steady

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111a.jpg" align="right" border="0" height="265" width="353">It appears
that consumer malaise continued early this month. During the latest
week, chain store sales slipped 0.1% after having been roughly
unchanged during October and down moderately in September.
Nevertheless, the sharp down-trend in sales of earlier this year
appears over.
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's SURVEYW database.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111b.jpg" align="right" border="0" height="265" width="353">

Prospects for an improvement in sales continue to appear limited. The
leading indicator of sales has been roughly unchanged since the spring
of this year. On the other hand, a backslide in spending also seems
unlikely. The sharp declines of the leading indicator of sales from
2007 to early-2009 are over.
 This composite leading economic indicator
is compiled from four series: (1) the MBA's volume index of mortgage
applications 
for home purchase (2) the ABC News/Money magazine's survey of consumer
buying conditions (3) new filings for jobless benefits and (4) the
30-year government bond yield.
Employment growth: Cyclical
movements or structural change from the Federal Reserve Bank
of Chicago is available <a href="http://www.chicagofed.org/publications/economicperspectives/ep_4qtr2009_part3_rissman.pdf">here
</a>.
The
Current State of the Economy and a Look to the Future (With Reference
to William &#8216;Sidestroke&#8217; Miles, W. Somerset Maugham, Don Ameche and
Kenneth Arrow) is the title of yesterday'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></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM" style="color: rgb(0, 0, 0);">ICSC-UBS (SA,
1977=100)</a></th>
<th scope="col">11/07/09</th>
<th scope="col">10/31/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain
Store Sales</td>
<td>490.9</td>
<td>491.3</td>
<td>2.9%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
</body></html>

It appears that consumer malaise continued early this month. During the latest week, chain store sales slipped 0.1% after having been roughly unchanged during October and down moderately in September. Nevertheless, the sharp down- [...]

Weekly Chain Store Sales Slip Following Several Lackluster Weeks

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111a.jpg" align="right" border="0" height="265" width="353">It appears
that consumer malaise continued early this month. During the latest
week, chain store sales slipped 0.1% after having been roughly
unchanged during October and down moderately in September.
Nevertheless, the sharp down-trend in sales of earlier this year
appears over.
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's SURVEYW database.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111b.jpg" align="right" border="0" height="265" width="353">Prospects
for an improvement in sales continue to appear limited. The
leading indicator of sales has been roughly unchanged since the spring
of this year. On the other hand, a backslide in spending also seems
unlikely. The sharp declines of the leading indicator of sales from
2007 to early-2009 are over.
 This composite leading economic indicator
is compiled from four series: (1) the MBA's volume index of mortgage
applications 
for home purchase (2) the ABC News/Money magazine's survey of consumer
buying conditions (3) new filings for jobless benefits and (4) the
30-year government bond yield.
Employment growth: Cyclical
movements or structural change from the Federal Reserve Bank
of Chicago is available <a href="http://www.chicagofed.org/publications/economicperspectives/ep_4qtr2009_part3_rissman.pdf">here
</a>.
The
Current State of the Economy and a Look to the Future (With Reference
to William &#8216;Sidestroke&#8217; Miles, W. Somerset Maugham, Don Ameche and
Kenneth Arrow) is the title of yesterday'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></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM" style="color: rgb(0, 0, 0);">ICSC-UBS (SA,
1977=100)</a></th>
<th scope="col">11/07/09</th>
<th scope="col">10/31/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain
Store Sales</td>
<td>490.9</td>
<td>491.3</td>
<td>2.9%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
JOLTS: U.S. Job Openings Improved
While Hiring Remains Steady 
by <a href="/comment/Moeller.html">Tom
Moeller</a> November 11, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111c.jpg" align="right" border="0" height="265" width="353">
The Bureau of Labor Statistics reported in its Job Openings
&amp; Labor Turnover Survey (JOLTS) that job availability improved
during September by 2.4% from August. The rise in the number
of job openings followed a 0.6% August uptick that was
revised from the initial report of a slight decline. Despite these
improvements, however, openings were off 25.9% from September of last
year. The series dates back to December 2000.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111d.jpg" align="right" border="0" height="265" width="353">

Factory sector job openings rose sharply for the second
consecutive month but they
remained down 42.4% y/y. The recent rise in the actual
number of construction sector job openings paused last month. Though
still down 59.2% y/y in September, openings were roughly double the
series' low reached in February. The
level of professional &amp; business services job openings posted
its second consecutive monthly gain (-25.2% y/y) and education
&amp; health sectors job openings (-12.3% y/y) reversed most of an
August decline. Openings in retail trade have risen slightly from their
April low (-9.8% y/y) while government sector job openings reflected
reduced tax revenues and fell to a new series' low (-38.1% y/y.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111e.jpg" align="right" border="0" height="265" width="353">

The job openings rate rose slightly from
the series' low reached this summer to 1.9%. These rates were down from
more than 3% in 2007. Recent gains have been led by the factory
&amp; construction sectors. The job openings rate is the
number of job openings on the last business day of the month as a
percent of total employment plus job openings.
The hires rate held steady at 3.1%, up
slightly from the May-June low of 3.0%, and still was nearly the lowest
in the series' short eight year history.The hires rate is the
number of hires during the month divided by employment.The
actual number of hires also was off its low but was still down by 11.0%
year-to-year. Factory sector hiring recently has picked up slightly but
remains off 14.1% y/y while construction sector hiring has moved
sideways since the winter (-3.3% y/y). Leisure &amp; hospitality
industry jobs fell 6.0% to a new series' low (19.8%) as did retail
sector hiring (-19.1%). In the professional &amp; business services
industry hires slipped after two strong monthly gains (-11.2% y/y)
while jobs in the education &amp; health services jobs gave back
the July increase but remained up 3.6% y/y.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111f.jpg" align="right" border="0" height="265" width="353">
The job separations rate remained at the
series' low of 3.3% with the actual number of separations off 11.2%
year-to-year. Separations include quits, layoffs, discharges,
and other separations as well as retirements.
The JOLTS survey dates only to December 2000 but has followed
the movement in nonfarm payrolls, though the actual correlation between
the two series is low.
A description of the Jolts survey and the latest release from
the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/pdf/jolts.pdf">here</a>
and the figures are available in Haver's USECON
database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM" style="color: white;">JOLTS (Job Openings &amp; Labor
&nbsp;Turnover Survey)</a> </th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">Sept. '08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td colspan="7">Job Openings, Total&nbsp;&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Rate (%)</td>
<td>1.9</td>
<td>1.8</td>
<td>2.4</td>
<td>2.3</td>
<td>3.1</td>
<td>3.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total (000s)</td>
<td>2,480</td>
<td>2,423</td>
<td>3,346</td>
<td>3,224</td>
<td>4,382</td>
<td>4,606</td>
</tr>
<tr>
<td colspan="7">Hires, Total</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Rate (%)</td>
<td>3.1</td>
<td>3.1</td>
<td>3.3</td>
<td>41.1</td>
<td>46.1</td>
<td>47.6</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total (000s)</td>
<td>4,010</td>
<td>4,040</td>
<td>4,505</td>
<td>56,486</td>
<td>63,666</td>
<td>64,879</td>
</tr>
</tbody>
</table>
Japan Machinery Orders Dig Out 
by <a href="/comment/Brusca.html">Robert
Brusca</a> November 11, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091111g.jpg" align="left" border="0" height="265" width="353">
Japan&#8217;s machinery orders rose by 6% in September. Core
machinery orders spurted by 10.5%. Foreign demand is the whole of the
pickup as domestic orders fell by 5.4% while foreign orders rose by
25.9% both in September.
The three month metrics show that core orders are still not
out of the woods; their three month growth rate is just 2.9% annualized
the same as their six month growth rate. Still these two horizon growth
rates are better than the -21.8% Year-over-year performance. Core
machinery orders are no longer falling but they are not rising very
rapidly.
The same sort of shortfalls exist across countries
Moreover Japan like Germany is benefiting from external
growth. Over three months, foreign demand is up at a 180% annual rate
that is an acceleration from a 60.4% annual rate over six months and
those numbers reverse the 42% drop in foreign demand Yr/Yr. Still,
domestic demand is wanting. Over three months it is up at a 19.9% pace,
better than the -1% rate over six months, and that is an improvement
from the drop of 14.9% Yr/Yr.
On balance Japan&#8217;s orders are on the mend. Even domestic
orders are showing a push into positive territory. But these series are
very volatile and given the volatility the recent domestic growth
figures are not very impressive. Much more impressive is the growth in
foreign orders that seems to be jumpstarting Japan as a whole. 

As the global economy turns to recovery one key challenge is
going to be to see if surplus and deficit countries begin to make
adjustments. Note that Japan and Germany, traditional exporting powers,
continue to get a lot of their stimulus from overseas. China&#8217;s trade
surplus was up this month. How is the US going to keep the lid on its
deficit if everyone else is running surpluses? Large structural trade
imbalances and the persisting investment flows they imply was one of
the main sources of instability in this past cycle. Is anything going
to change?

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th scope="col" colspan="8">Japan
Machinery Orders</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">m/m %</td>
<td colspan="4">Saar %</td>
</tr>
<tr class="odd">
<td class="firstcol">SA</td>
<td>Sep-09</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>3-Mos</td>
<td>6-Mos</td>
<td>12-Mos</td>
<td>12-Mo Ago</td>
</tr>
<tr>
<td class="firstcol">Total</td>
<td>6.0%</td>
<td>-1.9%</td>
<td>7.5%</td>
<td>56.1%</td>
<td>2.6%</td>
<td>-26.5%</td>
<td>-2.5%</td>
</tr>
<tr>
<td class="firstcol">Core Orders*</td>
<td>10.5%</td>
<td>0.5%</td>
<td>-9.3%</td>
<td>2.9%</td>
<td>2.8%</td>
<td>-21.8%</td>
<td>-3.7%</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol">Total
Orders</td>
</tr>
<tr>
<td class="firstcol">Foreign Demand</td>
<td>25.9%</td>
<td>-15.7%</td>
<td>21.8%</td>
<td>180.0%</td>
<td>60.4%</td>
<td>-42.2%</td>
<td>-3.5%</td>
</tr>
<tr>
<td class="firstcol">Domestic demand</td>
<td>-5.4%</td>
<td>7.1%</td>
<td>3.4%</td>
<td>19.9%</td>
<td>-1.0%</td>
<td>-14.9%</td>
<td>-2.8%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">* Excl ships
and electric power</td>
</tr>
</tbody>
</table>
</body></html>

Weekly Chain Store Sales SlipFollowing Several Lackluster Weeks

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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Michael J. Moran

260109A.jpg

260109B.jpg

Nonfarm payrolls rose 50,000 in December, continuing a pattern of modest increases that began in early 2025 and intensified last spring. The December results were constrained by an outright decline in the goods-producing sector, with both construction companies and manufacturers shedding workers. The private service sector was in the plus column, but the gain of 58,000 was not especially impressive. The retail trade sector was notably soft (-25,000), and a drop of 9,000 among firms in the business-service area was disappointing.

Revisions to results in October and November were more notable than the new figures for December, as downward adjustments of 76,000 more than offset the gain in December and left a net decline in the fourth quarter. Several areas contributed to the revisions (retail trade, construction, health care, transportation & warehousing, business services).

Not only were the recent job numbers soft, but the average workweek among those employed eased 0.1 hour to 34.2 hours. The reading was still within the range of observations from the past two years, but it moved to the bottom of the range. A dip of 0.1 hour might seem trivial, but when applied to 160 million workers, it represents a constraint on production. This decline added to the soft tone of the report.

260109C.jpg

Although the payroll numbers were soft, the unemployment rate dipped 0.1 percentage point to 4.4%. The drop reflected a jump of 232,000 in employment as measured by the survey of households. This employment measure is more volatile than the payroll figures from the survey of business establishments, and thus the gain might contain a healthy dose of random volatility. Still, it offered encouragement in that December marked the fifth consecutive gain, perhaps signaling that the bottom was not falling out of the labor market. 

Average hourly earnings also suggested that the labor market still had a pulse. December showed an increase of 0.3% in average hourly earnings, and results in the prior month were firmer than previously estimated (0.2% growth rather than 0.1%). The underlying trend is still cooling, but the year-over-year advance of 3.8% still represents a gain in real earnings.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

- Modest job growth in December, and downward revisions in October & November.
- The unemployment rate, though, inched lower.

A Soft Tone in the Labor Market

Winnie Tapasanun

260109F17.jpg

260109G17.jpg

Total housing starts fell 4.6% m/m in October to a seasonally adjusted annual rate of 1.246 million units—below expectations—following a 1.2% increase to 1.306 million in September and a 9.1% drop to 1.291 million in August (-8.5% m/m, 1.307 million previously), data from the U.S. Census Bureau showed. The Action Economics Forecast Survey had expected 1.321 million starts for October. The October figure marked the lowest level since May 2020 and represented the second m/m decline in three months after m/m increases in July and June. The year-on-year rate was at -7.8% in October, the steepest y/y drop since November 2024, following -3.8% in September and -1.2% in October 2024. Overall, starts remained 31.5% below the April 2022 peak of 1.820 million.

Single-family starts rebounded 5.4% (-7.8% y/y) to 874,000 in October, the highest level since July, after declines of 4.6% to 829,000 in September and 8.6% to 869,000 in August (890,000 previously). They reached a high of 1.218 million in November 2021 and a high of 1.273 in December 2020. Multi-family starts plunged 22.0% (-7.9% y/y) to 372,000, the lowest level since May, following a 13.0% September gain to 477,000 and a 10.0% August drop to 422,000 (417,000 previously). They reached a high of 629,000 units in November 2022 and a high of 616,000 units in April 2022.

By region, housing starts delivered a mixed performance. Starts in the West slumped 21.9% (-25.9% y/y) to 243,000 in October, the lowest level since July, after a 1.6% increase in September. Starts in the Northeast slid 0.6% (+41.3% y/y) to 154,000, the third m/m slide in four months, after a 58.2% September surge. To the upside, starts in the South rebounded 1.2% (-2.1% y/y) to 650,000 in October after a 3.6% decline in September and starts in the Midwest rose 0.5% (-20.7% y/y) to 199,000 after a 10.4% September decrease; for both regions, October represented the first m/m increase since July. Notably, the South continued to lead all regions with 650,000 starts, accounting for 52.2% of total U.S. housing starts; the region previously peaked at 1.044 million in April 2022.

Building permits fell 0.2% (-1.1% y/y) to 1.412 million in October, the sixth m/m fall in seven months, following a 6.4% rise to 1.415 million in September and a 2.3% decline to 1.330 million in August. They remained well below a high of 1.920 million in January 2022 and a high of 1.855 million in January 2021. Single-family permits fell 0.5% (-9.4% y/y) to 876,000, the second m/m fall in three months, after a 2.6% September increase to 880,000. They reached highs of 1.243 million in both January 2022 and January 2021. In contrast, multi-family permits rose 0.2% (16.3% y/y) to 536,000, the highest level since February 2024, after a 13.3% September gain to 535,000. They reached a peak of 817,000 units in February 2023 and a high of 787,000 units in June 2022. Regionally, permits fell m/m in the South (-3.3%; -3.9% y/y), the Midwest (-2.0%; -0.5% y/y), and the Northeast (-1.4%; +5.8% y/y), but increased m/m in the West (+9.1%; +2.1% y/y).

The housing starts and building permits figures can be found in Haver’s **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

260109H17.jpg

260109I17.jpg

- Housing starts -4.6% (-7.8% y/y) to 1.246 mil. in Oct.; second m/m fall in three months.
- Single-family starts up to a three-month high; multi-family starts down to a five-month low.
- Housing starts m/m down the West and Northeast but up in the South and Midwest.
- Building permits fall for the sixth time in seven months, led by a drop in single-family permits.

U.S. Housing Starts Decline in October; Lowest Level Since May ’20

260109E.jpg

German industrial production advanced by 0.8% month-to-month in November performing better than had been expected. Consumer goods output fell by 0.3% month-to-month, capital goods output soared with a 4.9% gain, while intermediate goods output fell back by 0.8%.  

On the whole, manufacturing output had been expected to be weak. But looking at manufacturing alone, rather than total industrial production, the gain was even stronger at 2.1% month-to-month. Real manufacturing orders in November rose by 5.6%, real sales in manufacturing rose by 2.7%. This is solid performance.

**Survey data have been weak and listless**
However, apart from anecdotal evidence, as monthly data unfold, the kinds of numbers that we have to look at first are various economic surveys that come from diffusion data. The ZEW’s current index was slightly stronger month-to-month at a still very weak -78.7 (net) reading compared to -80 in October although both of those were weaker than the ZEW net September reading of -76.4. IFO manufacturing weakened month-to-month in November at 87.1 compared to 88.1 in October and it was slightly weaker than its September value as well. IFO manufacturing expectations slipped to 94.1 in November from 96.9 in October although expectations were slightly higher than their level in September. The EU Commission index weakened in November to -18.9 from -18.1 in October although there was an improvement from -20.1 in September.

These comparisons show us that the survey data which we had in hand before getting the industrial production reading from Germany had given us a lot of weak readings and a lot of very weak momentum.

**Compare survey data to IP data using ranking technique**
We can compare industrial production data to survey data using two different columns in this table. The first is the queue standing column where we see the industrial production data with rankings mostly in their 50th percentile: intermediate goods have a ranking of 37.7% with construction at 33.4%; they are the weaker exceptions. We rank IP data by sector according to their annual growth rates compared to past growth rates.  However, by comparison the survey data (that we rank on levels) range between 12.1% and 29.8%; all of those are very weak readings. No wonder a focus on survey data leads to a weak upcoming assessment of production data. We can also look at a slightly more up-to-date, but shorter ranking, from January 2021. There we see that the industrial production data average rankings from the mid-60th percentile up to the 81.4 percentile for total industrial production. Surveys generally have rankings in the 20th and 30th percentile with the exception of IFO manufacturing expectations which reaches 67.8%, which is a solid reading.

260109.jpg

**Survey data signals should be downgraded?**
These comparisons show us that while it's hard to compare industrial output directly to the diffusion readings if we take those two metrics over the same timeline and compare the level of the diffusion index to the growth rate of the manufacturing index we get the capability to compare the two on more even footing. When we do that, we see that manufacturing data are doing better than the survey data very broadly speaking. So, while there's some surprise on the strength of manufacturing data, maybe we should place a greater emphasis on it because those data come from a real accounting process rather than from a survey process that is much less closely linked to magnitudes. And, essentially, we are really much more interested in magnitudes than just if something is higher and lower.

**Other Europe doing ‘well’, too**
Not so incidentally the industrial production readings for France, Spain, Portugal, and Norway, all of whom are fairly early reporters of industrial production data, rank well on the queue standing column as well as in the shorter rank standing column from January 2021. In fact, for these countries the difference in ranking between the two periods is not markedly different, certainly not as markedly different as it is for Germany. On the whole, it may be that Europe has been doing better than we thought because we've been spending too much time looking at the more up-to-date survey data on a PMI basis, rather than waiting for the more traditional and lagging industrial production reports that are accounting-based data and more thorough.

Germany

German Industrial Production Perks Up-Surprise!

Andrew Cates

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


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**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.

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**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.

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**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.

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**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.

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**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.

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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).

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Charts of the Week: Cooling Inflation, Diverging Growth

Sandy Batten

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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.

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- 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.