Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005d.jpg" align="right" border="0" height="265" width="353">
There is a little good news in today's preliminary estimates
of August retail trade for the Euro Area. The value of trade managed a
small increase of 0.40% after three successive monthly declines. The
volume of trade actually declined by 0.18%. It was only a rise in
prices of 0.58% that accounted for the rise in the value of trade. The
first chart shows indexes of the value, volume and prices of Euro
Retail Trade. (We calculated the index of prices by dividing the index
of value of trade by the index of volume and multiplying the result by
100.).These are preliminary estimates for the whole area because not
all 16 countries have yet reported retail sales data. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005e.jpg" align="right" border="0" height="265" width="353">
France and Italy
are important omissions.Eurostat estimates total sales after a
significant number of countries have reported sales data. Data are
revised as more countries report.Among those countries that have
reported, Austria, Belgium, Portugal, Slovenia, and Germany show
declines in value; Finland showed no change and Slovakia and Spain
showed small gains..The Producer Price Index was also released today
and it, too, shows a small increase in August. While one month rise
does not set a trend, it may be an indication that the deflationary
impact of falling oil prices has run its course.



<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"> EURO
AREA&nbsp; (2005=100)</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul&nbsp; 09</th>
<th scope="col">Aug 08</th>
<th scope="col">M/M %&nbsp;</th>
<th scope="col">Y/Y %&nbsp;</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">Value of Retail Trade</td>
<td>104.57</td>
<td>104.17</td>
<td>108.76</td>
<td>0.40</td>
<td>-3.83</td>
<td>108.7</td>
<td>106.2</td>
<td>103.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Volume of Retail Trade</td>
<td>100.22</td>
<td>100.40</td>
<td>102.64</td>
<td>-0.18</td>
<td>-236</td>
<td>103.0</td>
<td>103.7</td>
<td>102.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Trade Price Index</td>
<td>104.36</td>
<td>103.76</td>
<td>105.96</td>
<td>0.58</td>
<td>-1.51</td>
<td>105.6</td>
<td>102.4</td>
<td>101.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Producers Price Index</td>
<td>106.2</td>
<td>105.95</td>
<td>114.25</td>
<td>0.24</td>
<td>-7.05</td>
<td>111.8</td>
<td>106.6</td>
<td>104.2</td>
</tr>
</tbody>
</table>
</body></html>

There is a little good news in today's preliminary estimates of August retail trade for the Euro Area. The value of trade managed a small increase of 0.40% after three successive monthly declines. The volume of trade actually declined [...]

Retail Sales in The Euro Area Get a Lift From Price Increases

Tom Moeller

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005a.jpg" align="right" border="0" height="265" width="353">Improvement
in service sector activity broadened last month to its highest level
since May of last year. The Composite Index for the nonmanufacturing
sector from the Institute for Supply Management (ISM) rose to 50.9, a
level that indicates there was growth in overall service sector
activity. The latest level was the highest since May of last year and
the figure outpaced Consensus expectations for an increase to 50.0. A
level of the ISM index above 50 indicates rising overall service sector
activity. Since the series' inception in 1997 there has been a 64%
correlation between the level of the composite index index in the
nonmanufacturing sector and the Q/Q change in real GDP for the services
and the construction sectors.
ISM surveys more than 370 purchasing
managers in more than 62 industries including law firms, hospitals,
government and retailers. The nonmanufacturing survey dates back to
July 1997. The figures are available in Haver's USECON database.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005b.jpg" align="right" border="0" height="265" width="353">The
improvement in the index again was broad-based amongst the
component series. The business activity index for the service sector
remained above the break-even level of 50 for the second month. The new
orders series also broached 50, up from November's low of 35.6. In
addition, the employment index rose to 44.2 and that was the highest
level since August of last year. Since the series' inception in 1997
there has been an 80% correlation between the level of the ISM
nonmanufacturing employment index and the m/m change in payroll
employment in the service-producing plus the construction
industries.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005c.jpg" power ebbed service sector despite improvement overall activity pricing gave back more than half august gain declined to just nine percent (nsa of firms reported higher while an increased reporting lower prices since its inception ten years ago there has been a correlation between and q change in the gdp services chain price index align="right" border="0" height="265" width="353">
&gt;Beginning
with the
January 2008 Nonmanufacturing <cite>Report On Business</cite>®,
the composite index is calculated as an indicator of the overall
economic condition for the non-manufacturing sector. It is a composite
index based on the diffusion indices of four of the indicators
(business activity, new orders, employment and supplier deliveries)
with equal weights. The latest report from the ISM can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here.</a>

 Housing's Great Fall: Putting Household
Balance Sheets Together Again from the Federal Reserve Bank
of St. Louis can be found <a href="http://www.stlouisfed.org/publications/re/articles/?id=1716">here.</a>&nbsp;
<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/@EF/@EF03/@EF03.HTM">ISM
Nonmanufacturing Survey</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">September '08</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">Composite Index</td>
<td>50.9</td>
<td>48.4</td>
<td>50.0</td>
<td>47.4</td>
<td>53.5</td>
<td>55.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Business
Activity</td>
<td>55.1</td>
<td>51.3</td>
<td>51.5</td>
<td>47.4</td>
<td>56.0</td>
<td>58.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; New Orders</td>
<td>54.2</td>
<td>49.9</td>
<td>50.6</td>
<td>47.0</td>
<td>54.8</td>
<td>57.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Employment</td>
<td>44.3</td>
<td>43.5</td>
<td>44.2</td>
<td>43.8</td>
<td>52.0</td>
<td>53.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Supplier
Deliveries</td>
<td>50.0</td>
<td>49.0</td>
<td>53.5</td>
<td>51.1</td>
<td>51.1</td>
<td>53.8</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>48.8</td>
<td>63.1</td>
<td>70.6</td>
<td>66.0</td>
<td>63.8</td>
<td>65.3</td>
</tr>
</tbody>
</table>

</body></html>

Improvement in service sector activity broadened last month to its highest level since May of last year. The Composite Index for the nonmanufacturing sector from the Institute for Supply Management (ISM) rose to 50.9, a level that [...]

U.S. ISM Nonmanufacturing Index Increases To Highest Since May '08

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005a.jpg" align="right" border="0" height="265" width="353">Improvement
in service sector activity broadened last month to its highest level
since May of last year. The Composite Index for the nonmanufacturing
sector from the Institute for Supply Management (ISM) rose to 50.9, a
level that indicates there was growth in overall service sector
activity. The latest level was the highest since May of last year and
the figure outpaced Consensus expectations for an increase to 50.0. A
level of the ISM index above 50 indicates rising overall service sector
activity. Since the series' inception in 1997 there has been a 64%
correlation between the level of the composite index index in the
nonmanufacturing sector and the Q/Q change in real GDP for the services
and the construction sectors.
ISM surveys more than 370 purchasing
managers in more than 62 industries including law firms, hospitals,
government and retailers. The nonmanufacturing survey dates back to
July 1997. The figures are available in Haver's USECON database.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005b.jpg" align="right" border="0" height="265" width="353">The
improvement in the index again was broad-based amongst the
component series. The business activity index for the service sector
remained above the break-even level of 50 for the second month. The new
orders series also broached 50, up from November's low of 35.6. In
addition, the employment index rose to 44.2 and that was the highest
level since August of last year. Since the series' inception in 1997
there has been an 80% correlation between the level of the ISM
nonmanufacturing employment index and the m/m change in payroll
employment in the service-producing plus the construction
industries.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005c.jpg" power ebbed service sector despite improvement overall activity pricing gave back more than half august gain declined to just nine percent (nsa of firms reported higher while an increased reporting lower prices since its inception ten years ago there has been a correlation between and q change in the gdp services chain price index align="right" border="0" height="265" width="353">
&gt;Beginning
with the
January 2008 Nonmanufacturing <cite>Report On Business</cite>®,
the composite index is calculated as an indicator of the overall
economic condition for the non-manufacturing sector. It is a composite
index based on the diffusion indices of four of the indicators
(business activity, new orders, employment and supplier deliveries)
with equal weights. The latest report from the ISM can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here.</a>

 Housing's Great Fall: Putting Household
Balance Sheets Together Again from the Federal Reserve Bank
of St. Louis can be found <a href="http://www.stlouisfed.org/publications/re/articles/?id=1716">here.</a>&nbsp;
<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/@EF/@EF03/@EF03.HTM">ISM
Nonmanufacturing Survey</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">September '08</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">Composite Index</td>
<td>50.9</td>
<td>48.4</td>
<td>50.0</td>
<td>47.4</td>
<td>53.5</td>
<td>55.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Business
Activity</td>
<td>55.1</td>
<td>51.3</td>
<td>51.5</td>
<td>47.4</td>
<td>56.0</td>
<td>58.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; New Orders</td>
<td>54.2</td>
<td>49.9</td>
<td>50.6</td>
<td>47.0</td>
<td>54.8</td>
<td>57.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Employment</td>
<td>44.3</td>
<td>43.5</td>
<td>44.2</td>
<td>43.8</td>
<td>52.0</td>
<td>53.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp; Supplier
Deliveries</td>
<td>50.0</td>
<td>49.0</td>
<td>53.5</td>
<td>51.1</td>
<td>51.1</td>
<td>53.8</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>48.8</td>
<td>63.1</td>
<td>70.6</td>
<td>66.0</td>
<td>63.8</td>
<td>65.3</td>
</tr>
</tbody>
</table>

 Retail Sales in The Euro Area Get
a Lift From Price Increases 
by <a href="/comment/Curley.html">
Louise Curley</a> October 5, 2009



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005d.jpg" align="right" border="0" height="265" width="353">There is a little good news
in today's preliminary estimates
of August retail trade for the Euro Area. The value of trade managed a
small increase of 0.40% after three successive monthly declines. The
volume of trade actually declined by 0.18%. It was only a rise in
prices of 0.58% that accounted for the rise in the value of trade. The
first chart shows indexes of the value, volume and prices of Euro
Retail Trade. (We calculated the index of prices by dividing the index
of value of trade by the index of volume and multiplying the result by
100.).These are preliminary estimates for the whole area because not
all 16 countries have yet reported retail sales data. 
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091005e.jpg" align="right" border="0" height="265" width="353">France and
Italy
are important omissions.Eurostat estimates total sales after a
significant number of countries have reported sales data. Data are
revised as more countries report.Among those countries that have
reported, Austria, Belgium, Portugal, Slovenia, and Germany show
declines in value; Finland showed no change and Slovakia and Spain
showed small gains..The Producer Price Index was also released today
and it, too, shows a small increase in August. While one month rise
does not set a trend, it may be an indication that the deflationary
impact of falling oil prices has run its course.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"> EURO
AREA&nbsp; (2005=100)</th>
<th scope="col">Aug 09</th>
<th scope="col">Jul&nbsp; 09</th>
<th scope="col">Aug 08</th>
<th scope="col">M/M %&nbsp;</th>
<th scope="col">Y/Y %&nbsp;</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">Value of Retail Trade</td>
<td>104.57</td>
<td>104.17</td>
<td>108.76</td>
<td>0.40</td>
<td>-3.83</td>
<td>108.7</td>
<td>106.2</td>
<td>103.5</td>
</tr>
<tr class="odd">
<td class="firstcol">Volume of Retail Trade</td>
<td>100.22</td>
<td>100.40</td>
<td>102.64</td>
<td>-0.18</td>
<td>-236</td>
<td>103.0</td>
<td>103.7</td>
<td>102.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Trade Price Index</td>
<td>104.36</td>
<td>103.76</td>
<td>105.96</td>
<td>0.58</td>
<td>-1.51</td>
<td>105.6</td>
<td>102.4</td>
<td>101.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Producers Price Index</td>
<td>106.2</td>
<td>105.95</td>
<td>114.25</td>
<td>0.24</td>
<td>-7.05</td>
<td>111.8</td>
<td>106.6</td>
<td>104.2</td>
</tr>
</tbody>
</table>
</body></html>

U.S. ISM Nonmanufacturing IndexIncreases To Highest Since May '08

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002h.jpg" align="left" border="0" height="265" width="353">
August&#8217;s EMU PPI excluding construction rose by 0.7% following
a drop of 0.9% in July. Still the three-month growth rate (annualized)
is now positive at 0.7% the six month growth rate is at -3.9% and the
12-month growth rate is at -7.6%. Inflation is gaining a toe hold again
in EMU at the producer price level. The ECB ahs a ceiling arrangement
for the HICP only (harmonized index of consumer inflation). 
 

Even so, inflation does not appear to be cooking in any sense
of the word. For consumer goods, prices were still flat in August and,
at -0.3%, the three month growth rate for consumer goods is still close
to its six month annualized pace at -0.6%. There is no pressure there.
Capital goods prices continued to fall in August dropping by 0.1%. Over
three months, capital goods prices are falling by 0.8%; that is a
slight but only a slight improvement from dropping by 1.4% at an annual
rate over six months. There is not much inflation pressure from capital
goods prices either. 
 

Virtually all the inflation pressure in the PPI is coming from
industrial supplies or intermediate goods. Intermediate goods prices
rose by 0.4% in August. They are also up at a 1.1% annual rate over
three months and down at an annual rate of 3.6% over six months. 
 

Across EMU countries the headline PPI rose in all of the
largest of them. Ex food and energy prices rose in Germany and in
France as well. For all these price measures, the August rise is
balanced by a drop in July. 
 

Still the bottom line is that prices are on the move again.
While it does not look like the pressures are very widespread across
commodity classifications or very intense, the pressure seems quite
real and widespread cross the larger EMU nations. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro Area
and UK PPI Trends</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr class="grey4">
<td class="firstcol">Euro Area</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr class="grey3">
<td class="firstcol">Total excl Constructions</td>
<td>0.7%</td>
<td>-0.9%</td>
<td>0.7%</td>
<td>-3.9%</td>
<td>-7.6%</td>
<td>8.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Capital Goods</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.8%</td>
<td>-1.4%</td>
<td>-0.2%</td>
<td>2.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Consumer Goods</td>
<td>0.0%</td>
<td>0.0%</td>
<td>-0.3%</td>
<td>-0.6%</td>
<td>-2.6%</td>
<td>4.2%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Intermediate &amp; Cap Goods</td>
<td>0.4%</td>
<td>-0.1%</td>
<td>1.1%</td>
<td>-3.6%</td>
<td>-7.4%</td>
<td>5.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG</td>
<td>1.0%</td>
<td>-0.5%</td>
<td>4.1%</td>
<td>-0.7%</td>
<td>-7.1%</td>
<td>6.8%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany</td>
<td>0.5%</td>
<td>-1.6%</td>
<td>-6.8%</td>
<td>-9.4%</td>
<td>-7.6%</td>
<td>8.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany excl Energy</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>-1.9%</td>
<td>-3.3%</td>
<td>3.2%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France&nbsp;</td>
<td>0.7%</td>
<td>-0.4%</td>
<td>4.0%</td>
<td>-2.9%</td>
<td>-8.4%</td>
<td>7.7%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France excl Food &amp;
Energy</td>
<td>0.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
<td>-2.6%</td>
<td>-3.6%</td>
<td>3.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Italy</td>
<td>0.9%</td>
<td>-0.9%</td>
<td>1.1%</td>
<td>-2.8%</td>
<td>-7.8%</td>
<td>8.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">UK</td>
<td>2.5%</td>
<td>-1.7%</td>
<td>6.2%</td>
<td>1.0%</td>
<td>-6.5%</td>
<td>21.9%</td>
</tr>
<tr class="grey3">
<td colspan="7" class="firstcol">Euro Area Harmonized PPI ex
construction</td>
</tr>
<tr class="grey1">
<td colspan="7" class="firstcol">The EA 13 countries are Austria,
Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
the Netherlands, Portugal, Slovenia</td>
</tr>
</tbody>
</table>
</body></html>

August’s EMU PPI excluding construction rose by 0.7% following a drop of 0.9% in July. Still the three-month growth rate (annualized) is now positive at 0.7% the six month growth rate is at -3.9% and the 12-month growth rate is at [...]

PPI Points Way Higher for Euro Area Inflation

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002g.jpg" width="353">
The outplacement firm of Challenger, Grey &amp; Christmas indicated that job cut announcements fell last month to the current cycle low. They dropped to 66,404, compared to a high of 241,748 cuts in February of this year.
During the last ten years there has been a 67% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment. Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
In addition to fewer layoffs, hiring plans have picked up and were more than double last year&#39;s level. There have been strong increase in services, electronics and entertainment/leisure industries.
The Challenger figures are available in Haver&#39;s SURVEYS 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/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">September</th>
<th scope="col">August</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">Announced Job Cuts</td>
<td>66,404</td>
<td>76,456</td>
<td>-30.2%</td>
<td>1,223,993</td>
<td>768,264</td>
<td>839,822</td>
</tr>
<tr>
<td class="firstcol">Announced Hiring Plans</td>
<td>25,047</td>
<td>13,100</td>
<td>162.6</td>
<td>118,600</td>
<td>365,753</td>
<td>276,525</td>
</tr>
</tbody>
</table>
</body>
</html>

The outplacement firm of Challenger, Grey & Christmas indicated that job cut announcements fell last month to the current cycle low. They dropped to 66,404, compared to a high of 241,748 cuts in February of this year. During the last [...]

Challenger Layoffs Fall Further To Cycle Low

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002a.jpg" width="353">
Payback time came last month for vehicle sales that were pulled forward by price discounts. U.S. unit sales of light vehicles during September fell sharply with the end of the &quot;Cash-for-Clunkers&quot; sales program. Sales last month fell 34.6% m/m to 9.22M units according to the Autodata Corporation. (Seasonal adjustment of the figures is provided by the U.S. Bureau of Economic Analysis). September sales were weaker than the expected 9.6M sales rate and were at their lowest since February.
Sales of domestically made vehicles fell by more than one-third from August to 6.62M units and they were down 29.7% y/y. Sales of fuel efficient cars fell nearly 40% m/m while light truck sales posted a 29% m/m decline that left them down one-third versus last September. Year-to-date, sales of domestic vehicles overall were down 13.1% following last year&#39;s 35.8% drop from December-to-December.
Imported light vehicles similarly fell with the end of the government&#39;s sales program. A 36.5% m/m decline to 2.60 units more than reversed the August increase. Sales of imported autos fell a hard 36.3% while sales of imported light trucks also fell by more than one-third m/m. Year-to-date, sales of imported vehicles were slightly below last year&#39;s average.
Overall, import&#39;s share of the U.S. light vehicle market slipped to 28.2% last month from 29.0% in August. It reached 26.5% during all of last year. (Imported vehicles are those produced outside the United States.) Imports&#39; share of the U.S. car market totaled 35.3%, versus 34.3% last year while the share of the light truck market was 19.7%, up slightly from 18.3% last year.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002b.jpg" width="353">
The U.S. vehicle sales figures can be found in Haver&#39;s USECON database.
Regulatory reform is yesterday&#39;s House testimony by Fed Chairman Ben S. Bernanke and it can be found <a href="http://www.federalreserve.gov/newsevents/testimony/bernanke20091001a.htm"> 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/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light Vehicle Sales (SAAR, Mil. Units)</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Sept. 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</td>
<td>9.22</td>
<td>14.09</td>
<td>11.24</td>
<td>-26.7%</td>
<td>13.17</td>
<td>16.16</td>
<td>16.54</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>5.02</td>
<td>8.05</td>
<td>6.20</td>
<td>-20.3</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>3.25</td>
<td>5.26</td>
<td>4.11</td>
<td>-23.8</td>
<td>4.42</td>
<td>5.07</td>
<td>5.31</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Imported</td>
<td>1.77</td>
<td>2.78</td>
<td>2.09</td>
<td>-12.9</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>4.20</td>
<td>6.05</td>
<td>5.04</td>
<td>-33.0</td>
<td>6.47</td>
<td>8.60</td>
<td>8.78</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Domestic</td>
<td>3.37</td>
<td>4.75</td>
<td>4.06</td>
<td>-34.6</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>0.83</td>
<td>1.31</td>
<td>0.98</td>
<td>-26.1</td>
<td>1.18</td>
<td>1.47</td>
<td>1.37</td>
</tr>
</tbody>
</table>


</html>

Payback time came last month for vehicle sales that were pulled forward by price discounts. U.S. unit sales of light vehicles during September fell sharply with the end of the "Cash-for-Clunkers" sales program. Sales last month fell [...]

U.S. Vehicle Sales Payback August Strength

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002c.jpg" align="right" border="0" height="265" width="353">
For September, the employment figures from the Bureau of Labor
Statistics were uniformly weak. Payrolls fell a more-than-expected
263,000. Hours worked fell again. The unemployment rate rose to 9.8%,
the highest since 1983. All in all, they suggest that the rate of
decline in the job market has slowed, but an upturn still is not
evident.
Nonfarm payrolls fell 263,000 during September. That exceeded
expectations for a 180,000 decline and while the August shortfall was
lessened, July's was deepened. So far during this recession employment
has fallen by a total of 7.2 million, by far the record for a 21-month
period. In percentage terms, jobs are down 5.2% since the 2007 peak,
also a record. If there is good news, it's that the decline in payroll
declines moderated to an average 256,000 over the last three months
versus a peak rate of 701,000 this past winter.
The length of the average workweek fell back to the cycle low
of 33.0 hours. Combined with the decline in payrolls that was enough to
pull 3Q aggregate hours worked (employment times hours) down at a 3.0%
annual rate after a 7.8% decline during 2Q. Productivity needs to rise
more than that if real GDP is going to rise as is widely expected.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002d.jpg" align="right" border="0" height="265" width="353">
The increase in the unemployment rate to 9.8% from 9.7% was
as-expected and it left the rate at the highest level since 1983. The
rate's cycle low of 4.4% occurred in October 2006. The official
unemployment rate pales, however, in comparison to the rate which
includes "marginally attached workers" and those who are working
part-time for economic reasons. It rose to 17.0%. Including
"discouraged workers" the unemployment rate stood at 10.2%.
The increase in the overall jobless rate was due to a 785,000
(-4.3% y/y) decline in household employment. That was shallower than
the worst monthly declines of this past winter but worse than those of
the last several months. It was accompanied by a sharp 571,000 (-0.4%
y/y) decline in the labor force reflecting the discouraged workers.
Also from the household survey, the median duration of unemployment
jumped m/m to 17.3 weeks, just below this cycle's high reached in June.
The ranks of the long-term unemployed rose to 5.438 million (166.4%
y/y), an historic high. By educational attainment, those with a high
school diploma but no college saw employment fall 5.2% y/y while those
with a bachelor's degree or higher experienced a 0.7% decline.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002e.jpg" align="right" border="0" height="265" width="353">
From the payroll survey, the quickening in the rate of job
loss last month was due to a faster 94,000 (-3.1% y/y) decline in
private service payrolls. Declines were broad-based notably in retail
trade, educational services, and professional &amp; tech services.
Also, in the government sector employment fell a sharp 53,000 (-0.6%
y/y as budgets shrank with lower tax revenues. The number of local
gov't jobs led the decline with a 37,000 (-0.9% y/y) drop. Jobs with
the federal government fell 5,000 (+1.9% y/y) for the third decline in
the last four months. Manufacturing sector jobs fell 51,000 last month
after a 66,000 July decline. These shortfalls compare to average
monthly declines of 131,000 this year. Construction jobs fell 64,000
and they fell an average 89,000 each month this year.
The breath of the decline in payroll employment extended to
14.9% of industries during the last twelve months while it rose to
28.0% during the last three months.
Average hourly earnings ticked up just 0.1% during September.
That pulled the y/y gain down to 2.5% which was its weakest since
late-2004, down from 4.2% reached during 2007. Earnings in the factory
sector actually have improved recently and rose 0.7% (2.8% y/y). Growth
in durable sector's earnings rose 0.7% and the y/y rate quickened to
3.7%. Earnings in the private service sector rose just 0.5% (2.7% y/y)
while construction sector earnings fell 1.4% y/y.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002f.jpg" align="right" border="0" height="265" width="353">
The Labor Department offered a preliminary look at the
benchmark revision to the payroll data to be issued in February, 2010.
The revised data show that the level of payroll employment as of March
of 2009 will be lowered by 824,000, or 0.6%, from current published
numbers.
The figures referenced above are available in Haver's USECON
database. Additional detail can be found in the LABOR and
in the EMPL databases.
Fed Policy in the Financial Crisis: Arresting
the Adverse Feedback Loop from the Federal Reserve Bank
of Dallas is available <a href="http://dallasfed.org/research/eclett/2009/el0907.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">Employment:
000s</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">July</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">Payroll Employment</td>
<td>-263</td>
<td>-201</td>
<td>-304</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>1.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>-216</td>
<td>-276</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-51</td>
<td>-66</td>
<td>-41</td>
<td>-12.0%</td>
<td>-3.3%</td>
<td>-2.0%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-64</td>
<td>-60</td>
<td>-69</td>
<td>-15.3%</td>
<td>-5.5%</td>
<td>-0.8%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-147</td>
<td>-69</td>
<td>-188</td>
<td>-2.6%</td>
<td>0.2%</td>
<td>1.6%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.0</td>
<td>33.1</td>
<td>33.1</td>
<td>33.6 (Sept. '08)</td>
<td>33.6</td>
<td>33.8</td>
<td>33.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.1%</td>
<td>0.4%</td>
<td>0.3%</td>
<td>2.5%</td>
<td>3.8%</td>
<td>4.0%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>9.8%</td>
<td>9.7%</td>
<td>9.4%</td>
<td>6.2% (Sept. '08)</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

For September, the employment figures from the Bureau of Labor Statistics were uniformly weak. Payrolls fell a more-than-expected 263,000. Hours worked fell again. The unemployment rate rose to 9.8%, the highest since 1983. All in [...]

U.S. Payrolls Decline Again While Jobless Rate Increases

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002c.jpg" align="right" border="0" height="265" width="353">
For September, the employment figures from the Bureau of Labor
Statistics were uniformly weak. Payrolls fell a more-than-expected
263,000. Hours worked fell again. The unemployment rate rose to 9.8%,
the highest since 1983. All in all, they suggest that the rate of
decline in the job market has slowed, but an upturn still is not
evident.
Nonfarm payrolls fell 263,000 during September. That exceeded
expectations for a 180,000 decline and while the August shortfall was
lessened, July's was deepened. So far during this recession employment
has fallen by a total of 7.2 million, by far the record for a 21-month
period. In percentage terms, jobs are down 5.2% since the 2007 peak,
also a record. If there is good news, it's that the decline in payroll
declines moderated to an average 256,000 over the last three months
versus a peak rate of 701,000 this past winter.
The length of the average workweek fell back to the cycle low
of 33.0 hours. Combined with the decline in payrolls that was enough to
pull 3Q aggregate hours worked (employment times hours) down at a 3.0%
annual rate after a 7.8% decline during 2Q. Productivity needs to rise
more than that if real GDP is going to rise as is widely expected.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002d.jpg" align="right" border="0" height="265" width="353">
The increase in the unemployment rate to 9.8% from 9.7% was
as-expected and it left the rate at the highest level since 1983. The
rate's cycle low of 4.4% occurred in October 2006. The official
unemployment rate pales, however, in comparison to the rate which
includes "marginally attached workers" and those who are working
part-time for economic reasons. It rose to 17.0%. Including
"discouraged workers" the unemployment rate stood at 10.2%.
The increase in the overall jobless rate was due to a 785,000
(-4.3% y/y) decline in household employment. That was shallower than
the worst monthly declines of this past winter but worse than those of
the last several months. It was accompanied by a sharp 571,000 (-0.4%
y/y) decline in the labor force reflecting the discouraged workers.
Also from the household survey, the median duration of unemployment
jumped m/m to 17.3 weeks, just below this cycle's high reached in June.
The ranks of the long-term unemployed rose to 5.438 million (166.4%
y/y), an historic high. By educational attainment, those with a high
school diploma but no college saw employment fall 5.2% y/y while those
with a bachelor's degree or higher experienced a 0.7% decline.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002e.jpg" align="right" border="0" height="265" width="353">
From the payroll survey, the quickening in the rate of job
loss last month was due to a faster 94,000 (-3.1% y/y) decline in
private service payrolls. Declines were broad-based notably in retail
trade, educational services, and professional &amp; tech services.
Also, in the government sector employment fell a sharp 53,000 (-0.6%
y/y as budgets shrank with lower tax revenues. The number of local
gov't jobs led the decline with a 37,000 (-0.9% y/y) drop. Jobs with
the federal government fell 5,000 (+1.9% y/y) for the third decline in
the last four months. Manufacturing sector jobs fell 51,000 last month
after a 66,000 July decline. These shortfalls compare to average
monthly declines of 131,000 this year. Construction jobs fell 64,000
and they fell an average 89,000 each month this year.
The breath of the decline in payroll employment extended to
14.9% of industries during the last twelve months while it rose to
28.0% during the last three months.
Average hourly earnings ticked up just 0.1% during September.
That pulled the y/y gain down to 2.5% which was its weakest since
late-2004, down from 4.2% reached during 2007. Earnings in the factory
sector actually have improved recently and rose 0.7% (2.8% y/y). Growth
in durable sector's earnings rose 0.7% and the y/y rate quickened to
3.7%. Earnings in the private service sector rose just 0.5% (2.7% y/y)
while construction sector earnings fell 1.4% y/y.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002f.jpg" align="right" border="0" height="265" width="353">
The Labor Department offered a preliminary look at the
benchmark revision to the payroll data to be issued in February, 2010.
The revised data show that the level of payroll employment as of March
of 2009 will be lowered by 824,000, or 0.6%, from current published
numbers.
The figures referenced above are available in Haver's USECON
database. Additional detail can be found in the LABOR and
in the EMPL databases.
Fed Policy in the Financial Crisis: Arresting
the Adverse Feedback Loop from the Federal Reserve Bank
of Dallas is available <a href="http://dallasfed.org/research/eclett/2009/el0907.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">Employment:
000s</th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">July</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">Payroll Employment</td>
<td>-263</td>
<td>-201</td>
<td>-304</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>1.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>-216</td>
<td>-276</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-51</td>
<td>-66</td>
<td>-41</td>
<td>-12.0%</td>
<td>-3.3%</td>
<td>-2.0%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-64</td>
<td>-60</td>
<td>-69</td>
<td>-15.3%</td>
<td>-5.5%</td>
<td>-0.8%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-147</td>
<td>-69</td>
<td>-188</td>
<td>-2.6%</td>
<td>0.2%</td>
<td>1.6%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.0</td>
<td>33.1</td>
<td>33.1</td>
<td>33.6 (Sept. '08)</td>
<td>33.6</td>
<td>33.8</td>
<td>33.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.1%</td>
<td>0.4%</td>
<td>0.3%</td>
<td>2.5%</td>
<td>3.8%</td>
<td>4.0%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>9.8%</td>
<td>9.7%</td>
<td>9.4%</td>
<td>6.2% (Sept. '08)</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
 U.S. Vehicle Sales Payback August
Strength 
by <a href="/comment/Moeller.html">Tom
Moeller</a> October 2, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002a.jpg" align="left" border="0" height="265" width="353">
Payback time came last month for vehicle sales that were
pulled forward by price discounts. U.S. unit sales of light
vehicles during September fell sharply with the end of the
"Cash-for-Clunkers" sales program. Sales last month fell 34.6% m/m to
9.22M units according to the Autodata Corporation. (Seasonal adjustment
of the figures is provided by the U.S. Bureau of Economic Analysis).
September sales were weaker than the expected 9.6M sales rate and were
at their lowest since February.
Sales of domestically made vehicles fell
by more than one-third from August to 6.62M units and they were down
29.7% y/y. Sales of fuel efficient cars fell nearly 40% m/m while light
truck sales posted a 29% m/m decline that left them down one-third
versus last September. Year-to-date, sales of domestic vehicles overall
were down 13.1% following last year's 35.8% drop from
December-to-December.
Imported light vehicles similarly fell with
the end of the government's sales program. A 36.5% m/m decline to 2.60
units more than reversed the August increase. Sales of imported autos
fell a hard 36.3% while sales of imported light trucks also fell by
more than one-third m/m. Year-to-date, sales of imported vehicles were
slightly below last year's average.
Overall, import's share of the U.S. light
vehicle market slipped to 28.2% last month from 29.0% in August. 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 35.3%, versus 34.3% last year while the share of the
light truck market was 19.7%, up slightly from 18.3% last year.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002b.jpg" align="right" border="0" height="265" width="353">
The U.S. vehicle sales figures can be found in Haver's
USECON database.
Regulatory reform is yesterday's House
testimony by Fed Chairman Ben S. Bernanke and it can be found <a href="http://www.federalreserve.gov/newsevents/testimony/bernanke20091001a.htm">
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/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light
Vehicle Sales (SAAR, Mil. Units)</a></th>
<th scope="col">September</th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">Sept. 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</td>
<td>9.22</td>
<td>14.09</td>
<td>11.24</td>
<td>-26.7%</td>
<td>13.17</td>
<td>16.16</td>
<td>16.54</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>5.02</td>
<td>8.05</td>
<td>6.20</td>
<td>-20.3</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>3.25</td>
<td>5.26</td>
<td>4.11</td>
<td>-23.8</td>
<td>4.42</td>
<td>5.07</td>
<td>5.31</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>1.77</td>
<td>2.78</td>
<td>2.09</td>
<td>-12.9</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>4.20</td>
<td>6.05</td>
<td>5.04</td>
<td>-33.0</td>
<td>6.47</td>
<td>8.60</td>
<td>8.78</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>3.37</td>
<td>4.75</td>
<td>4.06</td>
<td>-34.6</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>0.83</td>
<td>1.31</td>
<td>0.98</td>
<td>-26.1</td>
<td>1.18</td>
<td>1.47</td>
<td>1.37</td>
</tr>
</tbody>
</table>
 Challenger Layoffs Fall Further To
Cycle Low 
by <a href="/comment/Moeller.html">Tom
Moeller</a> October 2, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002g.jpg" align="left" border="0" height="265" width="353">
The outplacement firm of Challenger, Grey &amp; Christmas
indicated that job cut announcements fell last month to the current
cycle low. They dropped to 66,404, compared to a high of 241,748 cuts
in February of this year.
During the last ten years there has been a 67% (inverse)
correlation between the three month moving average of announced job
cuts and the three month change payroll employment.
Job cut announcements differ from layoffs. Many are achieved through
attrition, early retirement or just never occur.
In addition to fewer layoffs, hiring plans have picked up and
were more than double last year's level. There have been strong
increase in services, electronics and entertainment/leisure industries.
The Challenger figures are available in Haver's SURVEYS
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/SURVEYS/@S3/@S301/@S301.HTM">Challenger,
Gray &amp; Christmas</a></th>
<th scope="col">September</th>
<th scope="col">August</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">Announced Job Cuts</td>
<td>66,404</td>
<td>76,456</td>
<td>-30.2%</td>
<td>1,223,993</td>
<td>768,264</td>
<td>839,822</td>
</tr>
<tr>
<td class="firstcol">Announced Hiring Plans</td>
<td>25,047</td>
<td>13,100</td>
<td>162.6</td>
<td>118,600</td>
<td>365,753</td>
<td>276,525</td>
</tr>
</tbody>
</table>

 PPI Points Way Higher for Euro
Area Inflation 
by <a href="/comment/Brusca.html">Robert
Brusca</a> October 2, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/091002h.jpg" align="left" border="0" height="265" width="353">
August&#8217;s EMU PPI excluding construction rose by 0.7% following
a drop of 0.9% in July. Still the three-month growth rate (annualized)
is now positive at 0.7% the six month growth rate is at -3.9% and the
12-month growth rate is at -7.6%. Inflation is gaining a toe hold again
in EMU at the producer price level. The ECB ahs a ceiling arrangement
for the HICP only (harmonized index of consumer inflation). 
 

Even so, inflation does not appear to be cooking in any sense
of the word. For consumer goods, prices were still flat in August and,
at -0.3%, the three month growth rate for consumer goods is still close
to its six month annualized pace at -0.6%. There is no pressure there.
Capital goods prices continued to fall in August dropping by 0.1%. Over
three months, capital goods prices are falling by 0.8%; that is a
slight but only a slight improvement from dropping by 1.4% at an annual
rate over six months. There is not much inflation pressure from capital
goods prices either. 
 

Virtually all the inflation pressure in the PPI is coming from
industrial supplies or intermediate goods. Intermediate goods prices
rose by 0.4% in August. They are also up at a 1.1% annual rate over
three months and down at an annual rate of 3.6% over six months. 
 

Across EMU countries the headline PPI rose in all of the
largest of them. Ex food and energy prices rose in Germany and in
France as well. For all these price measures, the August rise is
balanced by a drop in July. 
 

Still the bottom line is that prices are on the move again.
While it does not look like the pressures are very widespread across
commodity classifications or very intense, the pressure seems quite
real and widespread cross the larger EMU nations. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">Euro Area
and UK PPI Trends</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="4">Saar</td>
</tr>
<tr class="grey4">
<td class="firstcol">Euro Area</td>
<td>Aug-09</td>
<td>Jul-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>Yr/Yr</td>
<td>Y/Y Yr Ago</td>
</tr>
<tr class="grey3">
<td class="firstcol">Total excl Constructions</td>
<td>0.7%</td>
<td>-0.9%</td>
<td>0.7%</td>
<td>-3.9%</td>
<td>-7.6%</td>
<td>8.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">Capital Goods</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.8%</td>
<td>-1.4%</td>
<td>-0.2%</td>
<td>2.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Consumer Goods</td>
<td>0.0%</td>
<td>0.0%</td>
<td>-0.3%</td>
<td>-0.6%</td>
<td>-2.6%</td>
<td>4.2%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Intermediate &amp; Cap Goods</td>
<td>0.4%</td>
<td>-0.1%</td>
<td>1.1%</td>
<td>-3.6%</td>
<td>-7.4%</td>
<td>5.4%</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="grey3">
<td class="firstcol">MFG</td>
<td>1.0%</td>
<td>-0.5%</td>
<td>4.1%</td>
<td>-0.7%</td>
<td>-7.1%</td>
<td>6.8%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany</td>
<td>0.5%</td>
<td>-1.6%</td>
<td>-6.8%</td>
<td>-9.4%</td>
<td>-7.6%</td>
<td>8.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Germany excl Energy</td>
<td>0.3%</td>
<td>-0.2%</td>
<td>0.0%</td>
<td>-1.9%</td>
<td>-3.3%</td>
<td>3.2%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France&nbsp;</td>
<td>0.7%</td>
<td>-0.4%</td>
<td>4.0%</td>
<td>-2.9%</td>
<td>-8.4%</td>
<td>7.7%</td>
</tr>
<tr class="grey3">
<td class="firstcol">France excl Food &amp;
Energy</td>
<td>0.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
<td>-2.6%</td>
<td>-3.6%</td>
<td>3.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">Italy</td>
<td>0.9%</td>
<td>-0.9%</td>
<td>1.1%</td>
<td>-2.8%</td>
<td>-7.8%</td>
<td>8.1%</td>
</tr>
<tr class="grey3">
<td class="firstcol">UK</td>
<td>2.5%</td>
<td>-1.7%</td>
<td>6.2%</td>
<td>1.0%</td>
<td>-6.5%</td>
<td>21.9%</td>
</tr>
<tr class="grey3">
<td colspan="7" class="firstcol">Euro Area
Harmonized PPI ex
construction</td>
</tr>
<tr class="grey1">
<td colspan="7" class="firstcol">The EA 13
countries are Austria,
Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,
the Netherlands, Portugal, Slovenia</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Payrolls Decline Again WhileJobless Rate Increases

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

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Andrew Cates

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

260205Z1.jpg

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

260205Z2.jpg

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

260205Z3.jpg

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

260205Z4.jpg

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

260205Z5.jpg

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

260205Z6.jpg

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

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

260206E.jpg

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

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

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

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

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

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

260206.jpg

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

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

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

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

Germany

German IP Reveals Chaotic Trends

Winnie Tapasanun

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

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

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

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

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

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

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

Sandy Batten

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

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

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

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

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

U.S. Initial Unemployment Claims Surged in Latest Week

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

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

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

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

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

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

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