Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090902e.jpg" width="353">
It&#39;s part of a slowly developing trend, but the rate of job loss moderated again last month. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell 298,000 during August after a revised 360,000 July decline that was slightly shallower than reported initially. The latest reading was the nineteenth consecutive monthly decline, but the monthly change was the smallest since October of last year and less than half the worst of this past March. The three-month annualized rate of decline in payrolls also eased to 3.9% from its March peak of 7.1%.
ADP compiled the estimate from its database of individual companies&#39; payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator.
The U.S. Bureau of Labor Statistics will report August payroll employment this Friday. For comparison, July&#39;s 360,000 worker decline in ADP&#39;s measure of private nonfarm payrolls was accompanied by a loss of 254,000 jobs in the BLS measure of private sector payrolls. According to ADP and Macro-Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90.
ADP reported that small-sized payrolls fell the most last month and posted a 122,000 decline (-4.4%). That was similar to the 116,000 (-5.8% y/y) decline in medium-sized payrolls. Large payrolls fell by 60,000 (-5.6% y/y). The steady decline in service-producing industry employment continued. The 146,000 (-3.3% y/y) drop was the seventeenth consecutive monthly decline but in percentage terms the three-month rate of change moderated slightly to -2.3%. The recent declines are roughly half the worst from December through March. Medium-sized service payrolls fell 58,000 (-3.7% y/y) and small-sized payrolls dropped 59,000 (-2.9% y/y). Large service producing payrolls dropped by 29,000 (-3.5% y/y).<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090902f.jpg" width="353">
In the goods producing sector there were 152,000 fewer jobs in August (-13.3% y/y). Here, the three-month rate of change eased again, but remained double-digit at -11.2% versus -17.1% at its worst. Small-sized payrolls fell 63,000 (-12.8% y/y) followed by a 58,000 (-13.7% y/y) drop in medium-sized payrolls. Large payrolls fell 31,000 (-13.1% y/y). In the manufacturing sector alone, payrolls fell an easier 74,000 (-12.8% y/y).
The ADP National Employment Report data is maintained in Haver&#39;s USECON database; historical figures date back to December 2000. The figures in this report cover only private sector jobs and exclude employment in the public sector, which rose an average 11,083 during the last twelve months. 
The full ADP National Employment Report can be found <a href="http://adpemploymentreport.com/pdf/FINAL_Report_August_09.pdf">here</a> and the ADP methodology is explained <a href="http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf" title="blocked::http://www.adpemploymentreport.com/PDF/ADPNERMethodology.pdf">here</a>.

<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/@EB25/@EB25.HTM">LAXEPA@USECON</a></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">Total Nonfarm Private Payroll Employment (m/m Chg., 000s)</td>
<td>-298</td>
<td>-360</td>
<td>-5.2%</td>
<td>-0.5%</td>
<td>1.2%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Small Payroll (1-49)</td>
<td>-122</td>
<td>-135</td>
<td>-4.4</td>
<td>-0.0</td>
<td>1.6</td>
<td>2.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Medium Payroll (50-499)</td>
<td>-116</td>
<td>-153</td>
<td>-5.8</td>
<td>-0.5</td>
<td>1.2</td>
<td>1.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp; Large Payroll (&gt;500)</td>
<td>-60</td>
<td>-72</td>
<td>-5.6</td>
<td>-1.6</td>
<td>-0.1</td>
<td>0.4</td>
</tr>
</tbody>
</table>


</html>

It's part of a slowly developing trend, but the rate of job loss moderated again last month. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell 298,000 [...]

ADP Report: Rate of Job Loss Continues to Moderate, But Slowly

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090902a.jpg" align="right" border="0" height="265" width="353">
The U.S. government's "Cash for Clunkers" (CARS) program was
in full force during the final three weeks of last month. The program
gave car buyers up to $4,500 for trading in older, gas-guzzling
vehicles if they bought more fuel efficient cars &amp; light
trucks. An estimated 700,000 clunkers were taken off the road (to be
scrapped) and replaced by more fuel efficient vehicles. The program
cost the Federal Government $2.877 billion. Indeed, the CARS program
seems to have stimulated sales of new vehicles. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090902b.jpg" align="right" border="0" height="265" width="353">
U.S. unit
sales of light vehicles during August jumped 25.4% m/m to
14.09M units which was their highest since May of 2008, according to
the Autodata Corporation. (Seasonal adjustment of the figures is
provided by the U.S. Bureau of Economic Analysis). August sales were
indeed higher than the expected 13.2M sales rate. The question now is
to what degree these sales borrowed from the future?
Sales of domestically made vehicles jumped
22.6% m/m to 10.02M units but they still were down 0.9% y/y. Sales of
fuel efficient cars rose 28.0% m/m and that lifted them by 18.7% y/y.
Light truck sales posted a 17.1% m/m gain that still left them down
16.3% versus last August. Year-to-date, sales of domestic vehicles
overall are up 31.5% following last year's 35.8% drop from
December-to-December.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090902c.jpg" align="right" border="0" height="265" width="353">
Imported light vehicles similarly
benefitted from the government's sales program. A 32.9% m/m rise to
4.08M units actually exceeded the sales gain for domestics and brought
them up 18.1% y/y. Sales of imported autos rose by more than one-third
from July and were at their highest level since last June. Sales of
imported light trucks similarly rose by nearly one-third m/m and rose
16.7% y/y. Year-to-date sales of imported vehicles rose by nearly
one-half following last year's 33.9% decline.
Overall, import's share of the U.S. light
vehicle market rose to 28.9% last month after reaching 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 34.6%, versus
34.3% last year while the share of the light truck market was 21.4%, up
from 18.3 % last year.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090902d.jpg" align="right" border="0" height="265" width="353">
By maker, GM car sales in August fell 4.6%
from last August but Ford's sales rose 24.9% y/y. Chrysler sales fell
13.0% but sales of Toyotas rose a strong 19.7%. Sales of Nissan autos
jumped 38.4% while Subaru car sales soared 54.7%. Sales of the high-end
Mercedes autos fell 17.5% y/y and sales of BMW's were off 16.3%. In the
light truck market, GM's sales fell by nearly one-third y/y but Ford's
sales increased 12.9%. Chrysler's truck sales fell 16.2% and Toyota
truck sales similarly fell 14.6%. Sales of Nissan's light trucks were
off by nearly one-half versus last August but Subaru's sales rose by
nearly one-half.
The U.S. vehicle sales figures can be found in Haver's
USECON database and the company sales figures are in the INDUSTRY
database.
Economy to turn the corner in 2010 from the
Federal Reserve Bank of Chicago is available <a href="http://www.chicagofed.org/publications/fedletter/cflaugust2009_265a.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/USECON/@ED/@ED09/@ED0901/@ED0901.HTM">Light
Vehicle Sales (SAAR, Mil. Units)</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">August 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>14.09</td>
<td>11.24</td>
<td>9.70</td>
<td>3.9%</td>
<td>13.17</td>
<td>16.16</td>
<td>16.54</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Autos</td>
<td>8.05</td>
<td>6.20</td>
<td>5.04</td>
<td>18.7</td>
<td>6.71</td>
<td>7.58</td>
<td>7.77</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>5.26</td>
<td>4.11</td>
<td>3.28</td>
<td>18.7</td>
<td>4.42</td>
<td>5.07</td>
<td>5.31</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Imported</td>
<td>2.78</td>
<td>2.09</td>
<td>1.76</td>
<td>18.8</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>6.05</td>
<td>5.04</td>
<td>4.66</td>
<td>-10.9</td>
<td>6.47</td>
<td>8.60</td>
<td>8.78</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Domestic</td>
<td>4.75</td>
<td>4.06</td>
<td>3.78</td>
<td>-16.3</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>1.29</td>
<td>0.98</td>
<td>0.88</td>
<td>16.7</td>
<td>1.18</td>
<td>1.47</td>
<td>1.37</td>
</tr>
</tbody>
</table>
</body></html>

The U.S. government's "Cash for Clunkers" (CARS) program was in full force during the final three weeks of last month. The program gave car buyers up to $4,500 for trading in older, gas-guzzling vehicles if they bought more fuel [...]

Three Weeks Of "Cash for Clunkers" Program Spurs August U.S. Vehicle Sales To Highest Since May 2008

Three Weeks Of "Cash for Clunkers"Program Spurs August U.S. Vehicle Sales To Highest Since May 2008

Louise Curley

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901f.jpg" align="right" border="0" height="265" width="353">
Preliminary
data show that German retail sales rose 0.7% in volume
terms in July after declining in May and June. (Final data for total
retail sales plus data on the composition of sales for the month of
July will be available in about two weeks.) The value of
retail sales rose only 0.1%, implying a decline in retail
prices.&nbsp; While the rise in retail sales is encouraging, its
magnitude suggests a pretty lack luster consumer.&nbsp;&nbsp;
The first chart shows the volume, value and implied price level of
Germany's retail sales. Perhaps the reason that these data suggest
such a lack luster consumer, is that they do not take into account the
effect of the Government's program, paying people 2,500 Euros if they
scrap their car and buy a new one, which began in January.&nbsp;
German retail sales data exclude sales of motor vehicles.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901g.jpg" align="right" border="0" height="265" width="353">
&nbsp;
Combined wholesale and retail sales of cars and light trucks are
available in the Manufacturing, Trade &amp; Service Section of the
Haver data base for Germany.&nbsp; This series combining wholesale
sales is not strictly comparable with the retail sales data and is
available only through June. The increase in passenger car
registrations is, perhaps, a better proxy for sales of new cars and
this series, which is not seasonally adjusted, is available through
July.&nbsp; It, too, can be&nbsp; found in the&nbsp;
Manufacturing, Trade &amp; Services section in the Haver data base
on Germany.&nbsp; The year to year increases in these two series
are shown in the second chart.&nbsp; The&nbsp; year to year
increases in car registrations since January have been particularly
striking and suggest that consumers have a higher propensity to spend
than the retail sales data would suggest.
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">Jul 09</th>
<th scope="col">Jun&nbsp; 09</th>
<th scope="col">Jul 08</th>
<th scope="col">M/M %&nbsp;</th>
<th scope="col">Y/Y %</th>
<th scope="col">2008&nbsp;</th>
<th scope="col">2007 </th>
<th scope="col"> 2006 </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Retail Sales Volume&nbsp;
(2005=100)</td>
<td>94.9</td>
<td>94.2</td>
<td>-5.9</td>
<td>0.74</td>
<td>-1.04</td>
<td>96.5</td>
<td>97.2</td>
<td>1000.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Retail Sales Value&nbsp;
(2005=100)</td>
<td>99.1</td>
<td>99.0</td>
<td>101.4</td>
<td>0.10</td>
<td>-2.27</td>
<td>101.4</td>
<td>99.4</td>
<td>100.9</td>
</tr>
<tr class="even">
<td class="firstcol">Retail Sales Implied Price
Level&nbsp; (2005=100)</td>
<td>104.4</td>
<td>105.1</td>
<td>105.7</td>
<td>-0.64</td>
<td>-1.24</td>
<td>105.1</td>
<td>102.2</td>
<td>100.9</td>
</tr>
<tr>
<td class="firstcol">Year to Year % Change</td>
<td>Jul 09</td>
<td>Jun&nbsp; 09</td>
<td>May 09</td>
<td>Apr&nbsp;&nbsp;&nbsp; 09</td>
<td>Mar 09</td>
<td>Feb 09&nbsp;</td>
<td>Jan 09 </td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Wholesale and Retail Sales of
Cars and Light Motor Vehicles</td>
<td>n.a.</td>
<td>8.59</td>
<td>7.23</td>
<td>0.75</td>
<td>23.70</td>
<td>5.38</td>
<td>-15.89</td>
<td>--</td>
</tr>
<tr class="even">
<td class="firstcol">New Passenger Car Registrations</td>
<td>29.50</td>
<td>40.48</td>
<td>39.71</td>
<td>19.39</td>
<td>39.33</td>
<td>21.48</td>
<td>-14.21</td>
<td>--</td>
</tr>
</tbody>
</table>
</body></html>

Preliminary data show that German retail sales rose 0.7% in volume terms in July after declining in May and June. (Final data for total retail sales plus data on the composition of sales for the month of July will be available in [...]

German Retail Sales Up A Bit In July: Where Are The Auto Sales Resulting From Germany's "Cash For Clunkers" Program?

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901k.jpg" width="353">
Despite improvement in the residential sector, the total value of construction outlays has continued to trend lower. The overall value of construction spending ticked lower last month by 0.2% to the lowest level since February of 2004.
The declining level of construction has very-much reflected the weakening of corporate profitability which lowered spending in the private nonresidential sector by 1.2% during July and 8.3% from one year ago. That compares to the gain for all of last year of 13.2%. The commercial sector led that weakness with a 34.6% y/y decline followed closely by a 31.3% drop in the multi-retail sector. Office building construction wasn&#39;t far behind with a 26.0% drop in activity. Easier, but still significant, shortfalls versus last year were logged by the health care (-3.6%) and educational (-10.2% y/y) sectors. Spending in the transportation sector was off just 0.6% y/y.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901l.jpg" width="353">
Residential building activity may be finding its bottom to the recent recession in building activity. It rose 2.3% from June. Nevertheless, spending was down by more than one-quarter from the year-ago level paced by a near-halving of single family-home activity and a 36.6% drop in multi-family spending.Sometimes it&#39;s cheaper to fix the old place up than to buy new. Spending on alterations and improvements rose 6.0% from the year-ago level.
Public construction activity has elevated the overall construction market of late. Though in July it edged down 0.5%, there&#39;s been an increase of 5.5% since last year. By sector, health care has led the y/y rise with a 29.2% jump followed by a 17.9% rise in commercial construction. Spending on highways and streets did fall slightly in July but it&#39;s up 3.4% y/y while spending on schools construction rose 4.5 y/y.
The construction put-in-place figures are available in Haver&#39;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">Construction (%)</th>
<th scope="col">July</th>
<th scope="col">June</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</td>
<td>-0.2</td>
<td>0.1</td>
<td>-10.5</td>
<td>-6.9</td>
<td>-1.6</td>
<td>6.3</td>
</tr>
<tr>
<td class="firstcol">Private</td>
<td>0.1</td>
<td>-1.6</td>
<td>-17.0</td>
<td>-11.1</td>
<td>-5.7</td>
<td>5.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Residential</td>
<td>2.3</td>
<td>-0.5</td>
<td>-27.8</td>
<td>-29.1</td>
<td>-19.7</td>
<td>1.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonresidential</td>
<td>-1.2</td>
<td>-2.2</td>
<td>-8.3</td>
<td>13.2</td>
<td>23.1</td>
<td>16.2</td>
</tr>
<tr>
<td class="firstcol">Public</td>
<td>-0.7</td>
<td>3.6</td>
<td>5.5</td>
<td>5.6</td>
<td>13.1</td>
<td>9.3</td>
</tr>
</tbody>
</table>
</body>
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Despite improvement in the residential sector, the total value of construction outlays has continued to trend lower. The overall value of construction spending ticked lower last month by 0.2% to the lowest level since February of [...]

U.S. Construction Spending Holds Steady

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901h.jpg" align="right" border="0" height="265" width="353">There's
been no letup in the recovery in housing demand. The National
Association of Realtors reported that during July pending, improved
home affordability boosted sales of existing homes by 3.2% from June to
their highest level since June of 2007. The gain followed a similar
rise in June sales and doubled Consensus expectations for a 1.6%
increase. The gain in July home sales was led by a 12.1% m/m rise in
sales in the West.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901i.jpg" align="right" border="0" height="265" width="353">
That rise&nbsp; was a multiple of the increases
during the last several months and it lifted sales to the highest level
since September of last year. The latest also was near the highest
since early-2006. Sales in the South also rose a firm 3.1% to the
highest level since mid-2007. Sales in the Midwest went the other way
and fell 2.0%. They have been roughly flat since January. Finally,
sales in the Northeast dropped 3.0% from June and were roughly
unchanged since April. These home sales figures are analogous to the
new home sales data from the Commerce Department in that they measure
existing home sales when the sales contract is signed, not at the time
the sale is closed. The series dates back to 2001.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901j.jpg" align="right" border="0" height="265" width="353">
The
pending home sales data are available in Haver's PREALTOR database.
The number of homes on the market and prices are in the REALTOR
database.&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/WEEKLY/@W5/@W507/@W507.HTM">Pending
Home Sales (2001=100)&nbsp;</a></th>
<th scope="col">July</th>
<th scope="col">June</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">Total</td>
<td>97.6</td>
<td>94.6</td>
<td>&nbsp;&nbsp; 12.1%</td>
<td>86.8</td>
<td>95.8</td>
<td>112.1&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>78.8</td>
<td>81.2</td>
<td>4.6</td>
<td>72.6</td>
<td>85.6</td>
<td>98.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Midwest</td>
<td>88.1</td>
<td>89.9</td>
<td>8.1</td>
<td>80.6</td>
<td>89.5</td>
<td>102.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>103.8</td>
<td>100.7</td>
<td>12.1</td>
<td>89.8</td>
<td>107.3</td>
<td>127.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; West</td>
<td>112.5</td>
<td>100.4</td>
<td>19.9</td>
<td>99.3</td>
<td>92.1</td>
<td>109.5</td>
</tr>
</tbody>
</table>
</body></html>

There's been no letup in the recovery in housing demand. The National Association of Realtors reported that during July pending, improved home affordability boosted sales of existing homes by 3.2% from June to their highest level [...]

U.S. Pending Home Sales Remain Firm And Rise To The Highest Level In Two Years

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901d.jpg" width="353">
Earlier strength in gasoline prices took a breather during July and August. Nevertheless, prices remained up sharply since the year began. The pump price for regular gasoline dipped slightly last week to an average $2.61 per gallon, roughly where it&#39;s been since early June. Compared to the December low, however, prices remained up by one dollar (62%). Yesterday, that slight decline in pump prices was accompanied by a dip in the wholesale gasoline price to $1.84 per gallon. Prices had reached a high in early-August of $2.03. The figures are reported by the U.S. Department of Energy and can be found in Haver&#39;s WEEKLY &amp; DAILY databases.
In contrast to the stability of gasoline prices, crude oil prices have strengthened. Light sweet crude oil prices (WTI) increased to $72.41 per barrel last week versus a June high of $70.61. Prices have more-than-doubled since the December low of $32.37. Most recently, the price strength eased. Yesterday the spot market price for light sweet crude oil fell to $69.96 per barrel. Prices had reached a daily high of $73.82 just last week.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901e.jpg" width="353">
Earlier strength in gasoline prices stood against the backdrop of a firming demand picture, which now has eased. Since early-June the demand for gasoline has dropped moderately and year-to year demand slipped by 3.5%. Demand for distillate also is off sharply (-19.8% y/y) and residual fuel oil demand has given back its earlier strength (-14.8% y/y). Finally, oil remains plentiful as evidenced by an 11.3% y/y rise in inventories of crude oil &amp; petroleum products. Inventories of gasoline recently have dropped somewhat but they have strengthened by 6.5% versus last year, the strongest gain since early last year. The figures on crude oil production and inventories are available in Haver&#39;s OILWKLY database.
Natural gas prices make up the weakest part of the energy sector&#39;s pricing environment. Falling last week to an average of $2.72 per mmbtu (-66.5% y/y), prices were down by over three-quarters from the high reached in early-July of last year of $13.19/mmbtu.
Has Greater Globalization Made Forecasting Inflation More Difficult? from the Federal Reserve Bank of Dallas can be found <a href="http://dallasfed.org/research/eclett/2009/el0905.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/WEEKLY/@W4/@W4.HTM">Weekly Prices</a></th>
<th scope="col">08/31/09</th>
<th scope="col">08/24/09</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">Retail Regular Gasoline ($ per Gallon, Regular)</td>
<td>2.61</td>
<td>2.63</td>
<td>-29.0%</td>
<td>3.25</td>
<td>2.80</td>
<td>2.57</td>
</tr>
<tr>
<td class="firstcol">Light Sweet Crude Oil, WTI&nbsp; ($ per bbl.)</td>
<td>72.41</td>
<td>70.82</td>
<td>-37.9%</td>
<td>100.16</td>
<td>72.25</td>
<td>66.12</td>
</tr>
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Earlier strength in gasoline prices took a breather during July and August. Nevertheless, prices remained up sharply since the year began. The pump price for regular gasoline dipped slightly last week to an average $2.61 per gallon, [...]

Gasoline Prices Remain Roughly Stable As Crude Oil Prices Tick Higher

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<img align="left" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901a.jpg">
According to The National Association of Purchasing Management data, the recession in U.S. factory sector activity is over. Its August composite index jumped to 52.9 from an unrevised July reading of 48.9 and reached it&#39;s highest level since June of 2007. (Any reading above the break-even point of 50 suggests rising activity.) The latest figure was up from the low of 32.9 hit last December and it greatly exceeded Consensus expectations for a reading of 50.5. The ISM data is available in Haver&#39;s USECON database.
Last month, improvement in the ISM index again was broad-based led by a 9.6 point surge in the new orders component. So great was the strengthening in orders that the latest index level of 64.9 was the highest since December of 2004. That compared to a low of 23.1 reached this past December and reflected increases in orders reported by 43% (NSA) of firms. Only 5% reported higher orders this past December. Adding to that strength in domestic orders, it appeared that recessions abroad also wound down. The export order index jumped to 55.5 versus the December low of 35.5. During the last ten years there has been a 53% correlation between the index and the q/q change in real exports of goods in the GDP accounts.<img align="right" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901b.jpg">
Factory sector improvement also was indicated by a rise in the employment index. Though still reflecting a drop in payrolls, the rate of decline has eased. The index rose to 46.4 which was its highest level since last August and that was up from the February low of 26.1. During the last ten years there has been a 90% correlation between the index level and the three-month change in manufacturing payrolls.
The production component also strengthened. The rise to 61.9 was to its highest level since October 2005, up from the low of 26.3 in December. During the last ten years there has been an 84% correlation between the level of the production component of the composite index and the three-month growth in factory sector industrial production. It is appropriate to correlate the ISM index level with factory sector output growth because the ISM index is a diffusion index. It measures growth by using all of the positive changes in activity added to one half of the zero change in activity measures.<img align="left" border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090901c.jpg">
All this improvement in activity has brought with it a slowing in the speed of vendor deliveries. That&#39;s indicated by the gain in the delivery index to the highest level since 2006. The rate of inventory destocking also appears to have slowed. The inventory index increased modestly to 34.4 but it still was near the lowest level since 1982.
The separate index of prices paid again rose with improved factory sector activity. At 65.0 the reading above the break-even level of 50 was its highest level since last August and it&#39;s up from the December low of 18.0. During the last twenty years there has been a 79% correlation between the price index and the three-month change in the PPI for intermediate goods.

<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/@S2/@S201/@S201.HTM">ISM Mfg</a></th>
<th scope="col">August</th>
<th scope="col">July</th>
<th scope="col">August &#39;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>52.9</td>
<td>48.9</td>
<td>49.3</td>
<td>45.5</td>
<td>51.1</td>
<td>53.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; New Orders Index</td>
<td>64.9</td>
<td>55.3</td>
<td>48.2</td>
<td>42.1</td>
<td>54.3</td>
<td>55.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Employment Index</td>
<td>46.2</td>
<td>45.6</td>
<td>48.0</td>
<td>43.2</td>
<td>50.5</td>
<td>51.7</td>
</tr>
<tr class="odd">
<td class="firstcol">Prices Paid Index (NSA)</td>
<td>65.0</td>
<td>55.0</td>
<td>77.0</td>
<td>66.5</td>
<td>64.6</td>
<td>65.0</td>
</tr>
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According to The National Association of Purchasing Management data, the recession in U.S. factory sector activity is over. Its August composite index jumped to 52.9 from an unrevised July reading of 48.9 and reached it's highest [...]

The Factory Sector Recession Is Over; ISM Index Jumps To Highest Level Since Early-2007

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

Robert Brusca

260206E.jpg

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

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

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

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

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

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

260206.jpg

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

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

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

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

Germany

German IP Reveals Chaotic Trends

Winnie Tapasanun

260205X15.jpg

260205Y15.jpg

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

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

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

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

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

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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.