Tom Moeller

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813d.jpg" width="353">
The latest figures from the Labor Department indicate that initial claims for unemployment insurance increased slightly to 558,000 last week after an upwardly revised 554,000 during the prior week. For all of July, claims fell 9.3% from June but since the beginning of the month they moved sideways. The four-week moving average of claims, which smoothes out some of the volatility in the weekly numbers, ticked up to 565,000 but was still near its lowest level since late-January. A decline in weekly claims to 545,000 had been expected.
The Labor Department indicated that the largest increases in initial claims for the week ending Aug. 1 were in Alabama (+721, 58.4% y/y), Washington (+692, 47.6% y/y), Nebraska (+306, 40.4% y/y), Kentucky (+247, 46.9% y/y), and Delaware (+157, 43.0% y/y), while the largest decreases were in California (-7,258, -16.4% y/y), Michigan (-7,031, -20.9% y/y), Tennessee (-4,391, +30.9% y/y), Florida (-3,358, -6.1% y/y), and Georgia (-2,538, +19.8% y/y).
The lower level of initial claims has been accompanied by lower continuing claims for unemployment insurance which probably owes partly to the exhaustion of benefits. For the latest week, they declined 141,000 and since their peak last month they&#39;ve fallen 702,000 or 10.2%. Continuing claims provide an indication of workers&#39; ability to find employment and the level of 6,202,000 claims is up sharply from the year-ago level. The four-week average of continuing claims fell back to 6,259,250 and that was the lowest since late-April. The series dates back to 1966.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813e.jpg" width="353">
The insured rate of unemployment remained at 4.7% which was the lowest level since mid-April. During the last ten years, there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics.
The highest insured unemployment rates in the week ending July 25 were in Michigan (6.8 percent), Puerto Rico (6.7), Oregon (6.3), Pennsylvania (6.2), Nevada (6.0), Wisconsin (5.6), Connecticut (5.5), California (5.4), New Jersey (5.4), and Illinois (5.3). The lowest rates were in South Dakota (1.4) and North Dakota (1.6), Virginia (2.5), Wyoming (3.0), Texas (3.0), Maine (3.2), Colorado (3.4), Maryland (3.6), Minnesota (3.7), Florida (4.3), Mississippi (4.3), New York (4.4) and Georgia (4.3).
The unemployment insurance claims data is available in Haver&#39;s WEEKLY database and the state data is in the REGIONW database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">08/07/09</th>
<th scope="col">07/31/09</th>
<th scope="col">07/24/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>558</td>
<td>554</td>
<td>589</td>
<td>26.8%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,202</td>
<td>6,343</td>
<td>82.6%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>4.7</td>
<td>4.8</td>
<td>2.5</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body>
</html>

The latest figures from the Labor Department indicate that initial claims for unemployment insurance increased slightly to 558,000 last week after an upwardly revised 554,000 during the prior week. For all of July, claims fell 9.3% [...]

U.S. Weekly Claims for Unemployment Insurance Rise Unexpectedly but the Trend Is Still Down

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813c.jpg" align="left" border="0" height="265" width="353">
European growth figures continue to be weak when we log the
indicators month by month but if instead we complete a formal GDP
presentation, Germany and France have exited recession while the EMU
GDP drop is only -0.1% in Q2 of 2009, a drop at an annual rate of
-0.4%. EMU&#8217;s GDP decline in Q2 is less than the drop in the US but
Europe&#8217;s Yr/Yr decline has been worse at -4.7% compared to the US
year-over-year loss of -3.9%. 
 

In the US the Fed is less downbeat - At
its meeting yesterday the Fed implied that the recession in the US was
ending but did not take the step of saying in any clear voice that
recovery was beginning. It issued in a vague voice the statement saying
that activity was leveling off. In Q2 some of Europe, at least, is
doing better than that. 
 

GDP as the standard - The contrast
between what GDP sees and what monthly indicators show is an important
one to keep in mind. GDP accounting has its peculiar elements. Fewer
imports boost GDP even though there is no direct impact on domestic
output (there is less bought from abroad and so fewer payments made to
foreigners- all things equal fewer imports mean higher sales by
domestic agents for the same GDP). And inventories cut at slower pace,
add to GDP growth even though they are still being cut. 
 

Indicators can lag - Jobs tend to trail
activity shifts so the economy will be in recovery before job growth is
even positive. In the case of Europe its purchaser induces and the EU
Economic indicators from the EU Commission are woefully weak and seem
inconsistent with the notion that the recession is ending even if just
in Germany and France. But that is the way recessions sometimes end. 
 

Indicators really do lag in this cycle - 
To put it differently early recovery periods often do not look very
different from end recession periods. That is not surprising because
they are chronological neighbors. What makes recovery so different is
where it is headed compared to the recession period. Even so, the
indicators of economic performance in Europe are uncharacteristically
weak for the recession to be ending. Even those in Germany and in
France are lacking. The GDP rebounds hardly seems like they can be from
the same countries as the ones that have produced the indicators they
have up to mid-year. 
 

What indicators have been telling us- To
begin with we have no detail on GDP in Europe just the few things that
might be said at press conferences where the data are released.
Industrial data in EMU as well as in Germany and France, in particular,
continue to be very weak. The German and French economic sentiment
readings which are a weighted average of the EU Commission&#8217;s underlying
sector indices rank in the bottom 20th percentile of their respective
rage of values. The German and French readings are up about 10% or so
from their weakest readings in the recession on this score. The EU
Commission indices are from underlying diffusion data. All continue to
show deep contractions across are all sectors. Germany and France show
GDP that is rising, nonetheless. Apparently the change in the EMU index
is more important that the level of the index even though it is a
diffusion index that has to turn positive to signal sector growth and
all sectors industrial, retail, services, construction and consumer are
weak. 
 

German&#8217;s IFO - Germany has its own IFO
survey with a diffusion component and for July its services reading
just barely turned positive. 
 

More indicators - The NTC/Markit readings
are ISM type readings where a level above 50 denotes expansion. For EMU
in June the NTC reading stood at 42.4 for MFG and 44.5 for Services.
Both of these indices register declines as they are below 50. For
Germany, an economy that is showing positive GDP growth in Q2, its
NTC/Market diffusion index stood at 40.8 and was ins the bottom 40
percentile of its range of readings. France at 45.9 also signaled a
declining MFG sector but its index was closer to neutral standing in
the 49th percentile of its range, despite its low raw diffusion level.
The service sectors in France and Germany were weak in June as well,
with raw diffusion readings 45 and 47 respectively. Those readings
ranked in the lower third of each country&#8217;s respective historic
experience. 
 

GDP does not seem to have widespread support -
In short the industrial data and service sector data we have do not
confirm the message from GDP in EMU. We could go through a litany of
consumer confidence data as well, as they are weak too. If Europe is
recovering (France and Germany, any way) it must be the government
spending that is boosting the economy coupled with lower imports and
inventories that are being cut by less than before &#8211;all these are what
I would terms passive augmentations of GDP. The active augmentation
from more consumer spending and more business investment has not begun.
Inventories are likely adding to GDP growth but not by actively being
built. 
 

Exports and government are probably the main drivers -
We have seen episodic country reports that have revealed exports have
begun to rise. So the economies that are in recovery may now be firing
on two cylinders exports and the government sector. It&#8217;s not a very
wide base for growth yet. But it is also the support within EMU that is
helping to cut the drop in the formal measure of GDP. Progress is being
made but it does look like the sort of progress that usually marks the
ends of recessions. Too many European, German and French sectors are
just too weak. 
 



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col">E-Area and main G-10 country GDP Results </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Quarter over quarter-Saar</td>
<td colspan="4">Year/Year</td>
</tr>
<tr class="odd">
<td class="firstcol">GDP</td>
<td>Q2-09</td>
<td>Q1-09</td>
<td>Q4-08</td>
<td>Q2-09</td>
<td>Q1-09</td>
<td>Q4-08</td>
<td>Q3-08</td>
</tr>
<tr>
<td class="firstcol">&nbsp; EMU-15</td>
<td>-0.4%</td>
<td>-9.7%</td>
<td>-6.9%</td>
<td>-4.7%</td>
<td>-4.9%</td>
<td>-1.7%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Austria</td>
<td>#N/A</td>
<td>-3.3%</td>
<td>-3.9%</td>
<td>#N/A</td>
<td>-3.4%</td>
<td>0.2%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; France</td>
<td>1.4%</td>
<td>-5.3%</td>
<td>-5.5%</td>
<td>-2.6%</td>
<td>-3.4%</td>
<td>-1.6%</td>
<td>0.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Germany</td>
<td>1.3%</td>
<td>-13.4%</td>
<td>-9.4%</td>
<td>-5.9%</td>
<td>-6.7%</td>
<td>-1.8%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Greece</td>
<td>1.3%</td>
<td>-4.7%</td>
<td>1.2%</td>
<td>-0.2%</td>
<td>0.3%</td>
<td>2.4%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Italy</td>
<td>-1.9%</td>
<td>-10.3%</td>
<td>-8.3%</td>
<td>-6.0%</td>
<td>-6.0%</td>
<td>-3.0%</td>
<td>-1.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; The
Netherlands</td>
<td>-3.4%</td>
<td>-10.3%</td>
<td>-4.1%</td>
<td>-4.9%</td>
<td>-4.2%</td>
<td>-0.8%</td>
<td>1.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Portugal</td>
<td>#N/A</td>
<td>-6.2%</td>
<td>-7.1%</td>
<td>#N/A</td>
<td>-3.7%</td>
<td>-2.0%</td>
<td>0.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Spain</td>
<td>#N/A</td>
<td>-7.4%</td>
<td>-3.8%</td>
<td>#N/A</td>
<td>-3.0%</td>
<td>-0.7%</td>
<td>0.9%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; UK</td>
<td>-3.1%</td>
<td>-9.2%</td>
<td>-7.0%</td>
<td>-5.6%</td>
<td>-4.9%</td>
<td>-1.8%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; US</td>
<td>-1.0%</td>
<td>-6.4%</td>
<td>-5.4%</td>
<td>-3.9%</td>
<td>-3.3%</td>
<td>-1.9%</td>
<td>0.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Japan</td>
<td>#N/A</td>
<td>-14.2%</td>
<td>-13.5%</td>
<td>#N/A</td>
<td>-8.4%</td>
<td>-4.4%</td>
<td>-0.3%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Switzerland</td>
<td>#N/A</td>
<td>-3.2%</td>
<td>-2.2%</td>
<td>#N/A</td>
<td>-1.6%</td>
<td>-0.4%</td>
<td>1.2%</td>
</tr>
</tbody>
</table>
</body></html>

European growth figures continue to be weak when we log the indicators month by month but if instead we complete a formal GDP presentation, Germany and France have exited recession while the EMU GDP drop is only -0.1% in Q2 of 2009, a [...]

EMU GDP Falls But French And German GDP Rise

<html>
<head>
<style>
.odd{
 background-color:#edf5ff;
}
.even{
 background-color:#dde5ef;
}
.grey1{
	background-color:#f0f0f0;
}
.grey2{
	background-color:#e2e2e2;
}
.grey3{
	background-color:#d4d4d4;
}
.grey4{
	background-color:#c6c6c6;
}
.grey5{
	background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813a.jpg" width="353">
Price discounting apparently wasn&#39;t enough last month to entice consumers to open their wallets and spend. July retail sales slipped 0.1% after an upwardly revised 0.8% June increase that was fueled by higher gasoline prices. The July decline in total sales fell well short of expectations for a 0.6% increase. The retail sales data are available in Haver&#39;s USECON database.
The &quot;Cash-For-Clunkers&quot; auto sales program was successful in lifting sales of motor vehicles by 2.4% (-7.3% y/y) in dollar terms as unit vehicle sales jumped 15.8% m/m. Without the auto sector, retail sales fell 0.6%.
Elsewhere, gas prices reversed just a piece of earlier increases with a 4.0% (NSA) decline to $2.53 per gallon. As a result, sales of gasoline service stations fell 2.1% after a 6.3% jump during June.
Distortion of the underlying retail spending picture is an obvious result of auto &amp; gasoline sales, but the basic trend is not vibrant. Retail sales excluding both autos and gasoline fell 0.4% (-4.6% y/y) last month for the fifth consecutive monthly decline. Including a strong January, these sales have risen at just a 0.2% annual rate since December following last year&#39;s 2.8% 12-month decline.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090813b.jpg" width="353">
Discretionary spending continued under pressure as the job market remained depressed. Sales at furniture, electronics &amp; appliance stores fell 1.2% (-13.8% y/y) for the fifth consecutive monthly drop. Earlier small monthly gains were revised away. Furniture store sales alone fell 0.9% (-12.9% y/y) while sales of electronics &amp; appliances dropped 1.4% (-14.6% y/y). So far this year, these hard good sales have fallen at a 7.8% annual rate after last year&#39;s 4.4% decline. In the soft goods area, apparel store sales increased a slight 0.6% (-7.6% y/y) while sales at general merchandise stores fell 0.8% for the fifth consecutive monthly decline (-4.7% y/y).
Internet and catalogue purchases inched up after a firm June. July sales of non-store retailers rose 0.1% (-5.2% y/y) following an upwardly revised 1.5% jump during June. So far this year sales have risen at a 3.2% rate after rising 2.8% in 2008. Finally, restaurant sales made up their June decline with a 0.4% increase. So far this year they&#39;ve risen a a 4.0% annual rate.
Building materials sales continued their slump, falling 2.1% last month for the sixth monthly decline this year and they were down at a 9.1% annual rate since December.
Bank Credit Standards from the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/research-and-data/publications/business-review/2009/q2/brq209_bank-credit-standards.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">&nbsp;</th>
<th scope="col">July</th>
<th scope="col">June</th>
<th scope="col">May</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"><a href="http://www.haverselect.com/dlx/usecon/@ED/@ED04/@ED0401/@ED0401.HTM">Retail Sales &amp; Food Services</a> (%)</td>
<td>-0.1</td>
<td>0.8</td>
<td>0.5</td>
<td>-8.3</td>
<td>-0.7</td>
<td>3.3</td>
<td>5.3</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Excluding Autos</td>
<td>-0.6</td>
<td>0.5</td>
<td>0.2</td>
<td>-8.5</td>
<td>2.5</td>
<td>3.9</td>
<td>6.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;&nbsp;&nbsp; Less Gasoline</td>
<td>-0.4</td>
<td>-0.1</td>
<td>-0.2</td>
<td>-4.6</td>
<td>1.6</td>
<td>3.6</td>
<td>5.7</td>
</tr>
</tbody>
</table>
</body>
</html>

Price discounting apparently wasn't enough last month to entice consumers to open their wallets and spend. July retail sales slipped 0.1% after an upwardly revised 0.8% June increase that was fueled by higher gasoline prices. The July [...]

U.S. Retail Sales Post Surprising, Across-the-Board Declines

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<a href="http://"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812e.jpg" align="left" border="0" height="265" width="353"></a>
In an anticipated and unanimous vote, the Federal Open Market
Committee today left the Federal funds rate in a "range from 0 to 1/4
percent." The discount rate also was left unchanged at 0.5%. The Fed
funds rate remained the lowest ever.
The Fed indicated that "Conditions in financial markets have
improved further in recent weeks. Household spending has continued to
show signs of stabilizing but remains constrained by ongoing job
losses, sluggish income growth, lower housing wealth, and tight credit.
Again, much of the commentary on the economy was similar to
the last two meetings and concluded that "Although economic activity is
likely to remain weak for a time, the Committee continues to anticipate
that policy actions to stabilize financial markets and institutions,
fiscal and monetary stimulus, and market forces will contribute to a
gradual resumption of sustainable economic growth in a context of price
stability."
Regarding inflation the FOMC statement acknowledged the rise
in energy &amp; other commodity prices, but concluded that
substantial economic slack will leave inflation "subdued for some time."
In its effort to promote economic liquidity, the Fed used
similar language as in June, "... to provide support to mortgage
lending and housing markets and to improve overall conditions in
private credit markets, the Federal Reserve will purchase a total of up
to $1.25 trillion of agency mortgage-backed securities and up to $200
billion of agency debt by the end of the year. In addition, the Federal
Reserve will buy up to $300 billion of Treasury securities."<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812f.jpg" align="right" border="0" height="265" width="353">
New was the indication that "the Committee has
decided to gradually slow the pace of these transactions and
anticipates that the full amount will be purchased by the end of October."
For the complete text of the Fed's latest press release please
follow this <a href="http://www.federalreserve.gov/newsevents/press/monetary/20090812a.htm">link</a>.
The Haver databases USECON, WEEKLY and DAILY
contain the figures from the Federal Reserve Board.
The Shadow Banking System: Implications for Financial
Regulation from the Federal Reserve Bank of New York can be
found <a href="http://www.newyorkfed.org/research/staff_reports/sr382.pdf">here</a>.
What Do We Know (And Not Know) About Potential
Output? from the Federal Reserve Bank of St. Louis is
available <a href="http://research.stlouisfed.org/publications/review/09/07/Basu.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">&nbsp;</th>
<th scope="col">Current</th>
<th scope="col">Last</th>
<th scope="col">December</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Federal Funds Rate, % (Target)</td>
<td>0.00 - 0.25</td>
<td>0.00 - 0.25</td>
<td>0.16</td>
<td>1.93</td>
<td>5.02</td>
<td>4.96</td>
</tr>
<tr>
<td class="firstcol">Discount Rate, %</td>
<td>0.50</td>
<td>0.50</td>
<td>0.50</td>
<td>2.39</td>
<td>5.86</td>
<td>5.96</td>
</tr>
</tbody>
</table>
</body></html>

In an anticipated and unanimous vote, the Federal Open Market Committee today left the Federal funds rate in a "range from 0 to 1/4 percent." The discount rate also was left unchanged at 0.5%. The Fed funds rate remained the lowest [...]

FOMC Leaves Rates Unchanged; Notes Financial Market Improvement & Retail Spending Stabilization

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812d.jpg" align="left" border="0">
Euro Area industrial output rose in May but is back to its
declining ways in June. The negative rates of growth are still
diminishing to a decline of 4.8% over three months from -15.1% over six
months and from -18% over twelve months. Trend progress continues
despite the months set-back. And, with this monthly drop, the region
steps back behind the line that says it has turned the corner to
growth. It has not. 
 

Nondurable output is actually increasing taking some of the
downward pressure of consumer goods output where durable goods trends
are still horrifically negative. 
 

Country level trends have flattened out or show progress to
positive output In Germany, France, Spain and in the UK. Germany,
France and Spain show positive three-month output growth rates for MFG.
But over six- and twelve-months all the large countries are still
showing output declines. 
 

Underling the erratic and slow nature of progress in EMU,
Germany&#8217;s July IFO report show some progress is still being made, but
at a snail&#8217;s pace. The IFO&#8217;s current conditions and expectations
readings edged higher, boosting the German index for business climate
in July. But the IFO&#8217;s overall and sector readings on diffusion tell us
that this progress while small is still not very widespread as
diffusion indices remain negative and made their own small progress in
the month. The biggest sector improvement in the current diffusion
index presentation was in retailing. Manufacturing made the biggest
improvement in the expectations section. But services made the turn
from a negative reading to a positive one in the expectations survey- a
significant development even if on a small two-point move. 
 

Some of the luster from retailing&#8217;s gain in the current sector
survey is lost as the expectations for retailing made a similar but
opposite large move losing ground and blunting the current message of
improvement in the sector. . 
 

Conditions in Germany and in EMU remain in flux. Trends are in
the right direction but some are still slow-moving. We still see
episodic signs of backtracking. It&#8217;s too soon to say it is recovery or
to be sure that we are going there, despite the strong readings from
the OECD leading indicators. Questions remain. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="11" scope="col">E-zone MFG IP </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Jun 09</td>
<td>May 09</td>
<td>Jun 09</td>
<td>May 09</td>
<td>Jun 09</td>
<td>May 09</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro Area Detail</td>
<td>Jun 09</td>
<td>May 09</td>
<td>Apr 09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-2</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>-0.5%</td>
<td>0.2%</td>
<td>-1.0%</td>
<td>-4.8%</td>
<td>-6.9%</td>
<td>-15.1%</td>
<td>-20.0%</td>
<td>-18.0%</td>
<td>-18.3%</td>
<td>-9.5%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>-0.1%</td>
<td>-0.3%</td>
<td>-0.5%</td>
<td>-4.9%</td>
<td>-5.5%</td>
<td>-5.8%</td>
<td>-5.1%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Durables</td>
<td>-4.2%</td>
<td>-1.8%</td>
<td>-0.7%</td>
<td>-23.7%</td>
<td>-11.5%</td>
<td>-23.8%</td>
<td>-21.5%</td>
<td>-24.4%</td>
<td>-19.9%</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Nondurables</td>
<td>0.2%</td>
<td>0.6%</td>
<td>0.0%</td>
<td>3.7%</td>
<td>1.9%</td>
<td>-1.7%</td>
<td>-2.9%</td>
<td>-2.8%</td>
<td>-2.6%</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-0.5%</td>
<td>0.5%</td>
<td>-1.5%</td>
<td>-6.2%</td>
<td>-10.3%</td>
<td>-13.9%</td>
<td>-23.6%</td>
<td>-22.4%</td>
<td>-22.9%</td>
<td>-12.2%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-0.3%</td>
<td>1.0%</td>
<td>-2.9%</td>
<td>-8.6%</td>
<td>-6.9%</td>
<td>-22.8%</td>
<td>-26.5%</td>
<td>-21.9%</td>
<td>-22.7%</td>
<td>-12.5%</td>
</tr>
<tr class="odd">
<td colspan="11" class="firstcol">Main E-zone Countries and
UK IP in MFG</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>Jun 09</td>
<td>May 09</td>
<td>Jun 09</td>
<td>May 09</td>
<td>Jun 09</td>
<td>May 09</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG Only</td>
<td>Jun 09</td>
<td>May 09</td>
<td>Apr 09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q:2 Date</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.2%</td>
<td>5.0%</td>
<td>-3.1%</td>
<td>8.2%</td>
<td>10.6%</td>
<td>-16.3%</td>
<td>-24.5%</td>
<td>-19.8%</td>
<td>-19.5%</td>
<td>-1.9%</td>
</tr>
<tr>
<td class="firstcol">France: IP excl Construction</td>
<td>0.3%</td>
<td>2.8%</td>
<td>-1.4%</td>
<td>7.2%</td>
<td>-1.8%</td>
<td>-10.0%</td>
<td>-13.3%</td>
<td>-12.8%</td>
<td>-13.2%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-1.2%</td>
<td>-0.2%</td>
<td>0.6%</td>
<td>-3.4%</td>
<td>-15.9%</td>
<td>-21.4%</td>
<td>-26.3%</td>
<td>-23.9%</td>
<td>-22.7%</td>
<td>-17.8%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>3.9%</td>
<td>-6.9%</td>
<td>5.9%</td>
<td>10.1%</td>
<td>-22.2%</td>
<td>-17.7%</td>
<td>-21.6%</td>
<td>-14.4%</td>
<td>-22.4%</td>
<td>-2.3%</td>
</tr>
<tr>
<td class="firstcol">UK: EU member</td>
<td>0.5%</td>
<td>-0.6%</td>
<td>0.0%</td>
<td>-0.5%</td>
<td>-1.8%</td>
<td>-6.4%</td>
<td>-11.2%</td>
<td>-11.7%</td>
<td>-12.8%</td>
<td>-0.7%</td>
</tr>
</tbody>
</table>
</body></html>

Euro Area industrial output rose in May but is back to its declining ways in June. The negative rates of growth are still diminishing to a decline of 4.8% over three months from -15.1% over six months and from -18% over twelve months. [...]

Euro Area Industrial Output Steps Back In June

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812a.jpg" align="left" border="0">
As the U.S. recession continued, the foreign trade deficit
remained near its narrowest level 2001. The deficit of $27.0B was just
slightly deeper than the unrevised May level of $26.0B. Consensus
expectations had been for a deficit of $28.5B. Higher petroleum imports
have been the main source of upward pressure on the trade deficit
recently. Higher crude oil prices raised them by more than one-quarter
during June and by 12.2% so far this year. Offsetting that increase was
the U.S. recession which caused June nonpetroleum imports to fall by
1.0%. That pulled their decline so far this year to 15.7%. Higher
exports were the second factor which limited trade deficit
deterioration during June. The competitive foreign exchange value of
the dollar helped exports to rise by 2.0% after a firm 1.6% gain during
May. Nevertheless, recessions abroad have lowered exports by 5.4% since
December.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812b.jpg" align="right" border="0">
The rise in petroleum imports was driven by higher crude oil
prices. They rose to a June average of $59.17 per barrel versus the
February low of $39.22. The recession and the rise in prices prompted,
however, a decline in the volume of petroleum imports. Despite a June
gain they have fallen roughly ten-percent since December. The recession
has had the additional effect on limiting the size of the trade deficit
by dropping nonoil goods imports. They fell a hefty 1.0% during June
for the ninth sharp monthly decline in a year.
Adjusted for price inflation overall and for higher oil prices
specifically, the trade deficit in goods actually narrowed slightly
during June to $35.9B, the lowest since 1999. It was down from $45.3B
last June. Real non-auto consumer goods imports fell a hard 4.8% m/m
and are down 17.8% y/y, near their lowest level since 2005. Automotive
vehicles &amp; parts imports were down by exactly one-half versus
last year. Non-auto capital goods imports continued to reflect the
weakness in investment and fell 24.4% y/y near their lowest level since
2004.
Though services imports rose 2.3% during June that followed
ten months of decline and they were off by nearly one-third y/y. Travel
imports were down 12.8% y/y as passenger fares dropped by 9.0%.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812c.jpg" align="left" border="0">
Real exports added 0.6% to their 1.9% gain during May.
Nevertheless, recessions abroad caused them to fall by 21.4%
year-to-year to near the lowest level since late-2005. The chained
dollar value of non-auto consumer goods exports slipped m/m and were
down 13.8% y/y. Real capital goods exports jumped 1.5% but were off
20.6% y/y while exports of automobiles &amp; parts were off by
roughly one-half from last year.
Nominal exports of services rose 1.3% (-11.5% y/y) for the
first material increase since last fall. Travel exports fell 18.8% y/y
as fewer foreign citizens came to the U.S. even as passenger fares fell
22.5%.
The U.S. trade deficit in goods with China deepened again,
during June to $18.4B. Imports from China fell 14.1% y/y while U.S.
exports fell a lesser 10.3%. The trade deficit with Japan deepened
sharply to $3.7B but it remained near its shallowest since 1990. The
U.S. recession drove imports from Japan down by 36.5% year-to-year
while U.S. exports to the country fell by 30.4%.

<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/@EE/@EE01/@EE01.HTM">Foreign
Trade&nbsp;</a></th>
<th scope="col">June</th>
<th scope="col">May</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">U.S. Trade Deficit</td>
<td>$27.0B</td>
<td>$26.0B</td>
<td>$60.2B (6/08)</td>
<td>$695.9</td>
<td>$701.4</td>
<td>$760.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports - Goods
&amp; Services</td>
<td>2.0%</td>
<td>1.6%</td>
<td>-22.2%</td>
<td>11.2%</td>
<td>13.2%</td>
<td>13.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports - Goods
&amp; Services</td>
<td>2.3%</td>
<td>-0.6%</td>
<td>-31.1%</td>
<td>7.6</td>
<td>6.0%</td>
<td>10.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>23.8%</td>
<td>-3.4%</td>
<td>-51.9%</td>
<td>37.0%</td>
<td>9.4%</td>
<td>20.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>-1.0%</td>
<td>0.1%</td>
<td>-29.1%</td>
<td>1.5%</td>
<td>4.8%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
</body></html>

As the U.S. recession continued, the foreign trade deficit remained near its narrowest level 2001. The deficit of $27.0B was just slightly deeper than the unrevised May level of $26.0B. Consensus expectations had been for a deficit of [...]

U.S. Trade Deficit Remains Near The Narrowest Since 2001

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
<style>
.odd{
background-color:#edf5ff;
}
.even{
background-color:#dde5ef;
}
.grey1{
background-color:#f0f0f0;
}
.grey2{
background-color:#e2e2e2;
}
.grey3{
background-color:#d4d4d4;
}
.grey4{
background-color:#c6c6c6;
}
.grey5{
background-color:#b8b8b8;
}
</style>
</head>
<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812a.jpg" align="left" border="0">
As the U.S. recession continued, the foreign trade deficit
remained near its narrowest level 2001. The deficit of $27.0B was just
slightly deeper than the unrevised May level of $26.0B. Consensus
expectations had been for a deficit of $28.5B. Higher petroleum imports
have been the main source of upward pressure on the trade deficit
recently. Higher crude oil prices raised them by more than one-quarter
during June and by 12.2% so far this year. Offsetting that increase was
the U.S. recession which caused June nonpetroleum imports to fall by
1.0%. That pulled their decline so far this year to 15.7%. Higher
exports were the second factor which limited trade deficit
deterioration during June. The competitive foreign exchange value of
the dollar helped exports to rise by 2.0% after a firm 1.6% gain during
May. Nevertheless, recessions abroad have lowered exports by 5.4% since
December.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812b.jpg" align="right" border="0">
The rise in petroleum imports was driven by higher crude oil
prices. They rose to a June average of $59.17 per barrel versus the
February low of $39.22. The recession and the rise in prices prompted,
however, a decline in the volume of petroleum imports. Despite a June
gain they have fallen roughly ten-percent since December. The recession
has had the additional effect on limiting the size of the trade deficit
by dropping nonoil goods imports. They fell a hefty 1.0% during June
for the ninth sharp monthly decline in a year.
Adjusted for price inflation overall and for higher oil prices
specifically, the trade deficit in goods actually narrowed slightly
during June to $35.9B, the lowest since 1999. It was down from $45.3B
last June. Real non-auto consumer goods imports fell a hard 4.8% m/m
and are down 17.8% y/y, near their lowest level since 2005. Automotive
vehicles &amp; parts imports were down by exactly one-half versus
last year. Non-auto capital goods imports continued to reflect the
weakness in investment and fell 24.4% y/y near their lowest level since
2004.
Though services imports rose 2.3% during June that followed
ten months of decline and they were off by nearly one-third y/y. Travel
imports were down 12.8% y/y as passenger fares dropped by 9.0%.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812c.jpg" align="left" border="0">
Real exports added 0.6% to their 1.9% gain during May.
Nevertheless, recessions abroad caused them to fall by 21.4%
year-to-year to near the lowest level since late-2005. The chained
dollar value of non-auto consumer goods exports slipped m/m and were
down 13.8% y/y. Real capital goods exports jumped 1.5% but were off
20.6% y/y while exports of automobiles &amp; parts were off by
roughly one-half from last year.
Nominal exports of services rose 1.3% (-11.5% y/y) for the
first material increase since last fall. Travel exports fell 18.8% y/y
as fewer foreign citizens came to the U.S. even as passenger fares fell
22.5%.
The U.S. trade deficit in goods with China deepened again,
during June to $18.4B. Imports from China fell 14.1% y/y while U.S.
exports fell a lesser 10.3%. The trade deficit with Japan deepened
sharply to $3.7B but it remained near its shallowest since 1990. The
U.S. recession drove imports from Japan down by 36.5% year-to-year
while U.S. exports to the country fell by 30.4%.

<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/@EE/@EE01/@EE01.HTM">Foreign
Trade&nbsp;</a></th>
<th scope="col">June</th>
<th scope="col">May</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">U.S. Trade Deficit</td>
<td>$27.0B</td>
<td>$26.0B</td>
<td>$60.2B (6/08)</td>
<td>$695.9</td>
<td>$701.4</td>
<td>$760.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Exports - Goods
&amp; Services</td>
<td>2.0%</td>
<td>1.6%</td>
<td>-22.2%</td>
<td>11.2%</td>
<td>13.2%</td>
<td>13.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;Imports - Goods
&amp; Services</td>
<td>2.3%</td>
<td>-0.6%</td>
<td>-31.1%</td>
<td>7.6</td>
<td>6.0%</td>
<td>10.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Petroleum</td>
<td>23.8%</td>
<td>-3.4%</td>
<td>-51.9%</td>
<td>37.0%</td>
<td>9.4%</td>
<td>20.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Nonpetroleum Goods</td>
<td>-1.0%</td>
<td>0.1%</td>
<td>-29.1%</td>
<td>1.5%</td>
<td>4.8%</td>
<td>9.1%</td>
</tr>
</tbody>
</table>
Euro Area Industrial Output Steps
Back In June 
by <a href="/comment/Brusca.html">Robert
Brusca</a> August 12, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812d.jpg" align="left" border="0">
Euro Area industrial output rose in May but is back to its
declining ways in June. The negative rates of growth are still
diminishing to a decline of 4.8% over three months from -15.1% over six
months and from -18% over twelve months. Trend progress continues
despite the months set-back. And, with this monthly drop, the region
steps back behind the line that says it has turned the corner to
growth. It has not. 
 

Nondurable output is actually increasing taking some of the
downward pressure of consumer goods output where durable goods trends
are still horrifically negative. 
 

Country level trends have flattened out or show progress to
positive output In Germany, France, Spain and in the UK. Germany,
France and Spain show positive three-month output growth rates for MFG.
But over six- and twelve-months all the large countries are still
showing output declines. 
 

Underling the erratic and slow nature of progress in EMU,
Germany&#8217;s July IFO report show some progress is still being made, but
at a snail&#8217;s pace. The IFO&#8217;s current conditions and expectations
readings edged higher, boosting the German index for business climate
in July. But the IFO&#8217;s overall and sector readings on diffusion tell us
that this progress while small is still not very widespread as
diffusion indices remain negative and made their own small progress in
the month. The biggest sector improvement in the current diffusion
index presentation was in retailing. Manufacturing made the biggest
improvement in the expectations section. But services made the turn
from a negative reading to a positive one in the expectations survey- a
significant development even if on a small two-point move. 
 

Some of the luster from retailing&#8217;s gain in the current sector
survey is lost as the expectations for retailing made a similar but
opposite large move losing ground and blunting the current message of
improvement in the sector. . 
 

Conditions in Germany and in EMU remain in flux. Trends are in
the right direction but some are still slow-moving. We still see
episodic signs of backtracking. It&#8217;s too soon to say it is recovery or
to be sure that we are going there, despite the strong readings from
the OECD leading indicators. Questions remain. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">E-zone
MFG IP </th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Euro Area Detail</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>Apr 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q-2</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>-0.5%</td>
<td>0.2%</td>
<td>-1.0%</td>
<td>-4.8%</td>
<td>-6.9%</td>
<td>-15.1%</td>
<td>-20.0%</td>
<td>-18.0%</td>
<td>-18.3%</td>
<td>-9.5%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>-0.3%</td>
<td>0.3%</td>
<td>-0.1%</td>
<td>-0.3%</td>
<td>-0.5%</td>
<td>-4.9%</td>
<td>-5.5%</td>
<td>-5.8%</td>
<td>-5.1%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Durables</td>
<td>-4.2%</td>
<td>-1.8%</td>
<td>-0.7%</td>
<td>-23.7%</td>
<td>-11.5%</td>
<td>-23.8%</td>
<td>-21.5%</td>
<td>-24.4%</td>
<td>-19.9%</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Nondurables</td>
<td>0.2%</td>
<td>0.6%</td>
<td>0.0%</td>
<td>3.7%</td>
<td>1.9%</td>
<td>-1.7%</td>
<td>-2.9%</td>
<td>-2.8%</td>
<td>-2.6%</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>-0.5%</td>
<td>0.5%</td>
<td>-1.5%</td>
<td>-6.2%</td>
<td>-10.3%</td>
<td>-13.9%</td>
<td>-23.6%</td>
<td>-22.4%</td>
<td>-22.9%</td>
<td>-12.2%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>-0.3%</td>
<td>1.0%</td>
<td>-2.9%</td>
<td>-8.6%</td>
<td>-6.9%</td>
<td>-22.8%</td>
<td>-26.5%</td>
<td>-21.9%</td>
<td>-22.7%</td>
<td>-12.5%</td>
</tr>
<tr class="odd">
<td colspan="11" class="firstcol">Main
E-zone Countries and
UK IP in MFG</td>
</tr>
<tr class="even">
<td class="firstcol">&nbsp;</td>
<td colspan="3">Mo/Mo</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG Only</td>
<td>Jun 
09</td>
<td>May 
09</td>
<td>Apr 
09</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q:2 
Date</td>
</tr>
<tr>
<td class="firstcol">Germany</td>
<td>0.2%</td>
<td>5.0%</td>
<td>-3.1%</td>
<td>8.2%</td>
<td>10.6%</td>
<td>-16.3%</td>
<td>-24.5%</td>
<td>-19.8%</td>
<td>-19.5%</td>
<td>-1.9%</td>
</tr>
<tr>
<td class="firstcol">France: IP excl Construction</td>
<td>0.3%</td>
<td>2.8%</td>
<td>-1.4%</td>
<td>7.2%</td>
<td>-1.8%</td>
<td>-10.0%</td>
<td>-13.3%</td>
<td>-12.8%</td>
<td>-13.2%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>-1.2%</td>
<td>-0.2%</td>
<td>0.6%</td>
<td>-3.4%</td>
<td>-15.9%</td>
<td>-21.4%</td>
<td>-26.3%</td>
<td>-23.9%</td>
<td>-22.7%</td>
<td>-17.8%</td>
</tr>
<tr>
<td class="firstcol">Spain</td>
<td>3.9%</td>
<td>-6.9%</td>
<td>5.9%</td>
<td>10.1%</td>
<td>-22.2%</td>
<td>-17.7%</td>
<td>-21.6%</td>
<td>-14.4%</td>
<td>-22.4%</td>
<td>-2.3%</td>
</tr>
<tr>
<td class="firstcol">UK: EU member</td>
<td>0.5%</td>
<td>-0.6%</td>
<td>0.0%</td>
<td>-0.5%</td>
<td>-1.8%</td>
<td>-6.4%</td>
<td>-11.2%</td>
<td>-11.7%</td>
<td>-12.8%</td>
<td>-0.7%</td>
</tr>
</tbody>
</table>
FOMC Leaves Rates Unchanged; Notes
Financial Market Improvement &amp; Retail Spending
Stabilization 
by <a href="/comment/Moeller.html">Tom
Moeller</a> August 12, 2009


<a href="http://"><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812e.jpg" align="left" border="0" height="265" width="353"></a>
In an anticipated and unanimous vote, the Federal Open Market
Committee today left the Federal funds rate in a "range from 0 to 1/4
percent." The discount rate also was left unchanged at 0.5%. The Fed
funds rate remained the lowest ever.
The Fed indicated that "Conditions in financial markets have
improved further in recent weeks. Household spending has continued to
show signs of stabilizing but remains constrained by ongoing job
losses, sluggish income growth, lower housing wealth, and tight credit.
Again, much of the commentary on the economy was similar to
the last two meetings and concluded that "Although economic activity is
likely to remain weak for a time, the Committee continues to anticipate
that policy actions to stabilize financial markets and institutions,
fiscal and monetary stimulus, and market forces will contribute to a
gradual resumption of sustainable economic growth in a context of price
stability."
Regarding inflation the FOMC statement acknowledged the rise
in energy &amp; other commodity prices, but concluded that
substantial economic slack will leave inflation "subdued for some time."
In its effort to promote economic liquidity, the Fed used
similar language as in June, "... to provide support to mortgage
lending and housing markets and to improve overall conditions in
private credit markets, the Federal Reserve will purchase a total of up
to $1.25 trillion of agency mortgage-backed securities and up to $200
billion of agency debt by the end of the year. In addition, the Federal
Reserve will buy up to $300 billion of Treasury securities."<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090812f.jpg" align="right" border="0" height="265" width="353">
New was the indication that "the Committee has
decided to gradually slow the pace of these transactions and
anticipates that the full amount will be purchased by the end of October."
For the complete text of the Fed's latest press release please
follow this <a href="http://www.federalreserve.gov/newsevents/press/monetary/20090812a.htm">link</a>.
The Haver databases USECON, WEEKLY and DAILY
contain the figures from the Federal Reserve Board.
The Shadow Banking System: Implications for Financial
Regulation from the Federal Reserve Bank of New York can be
found <a href="http://www.newyorkfed.org/research/staff_reports/sr382.pdf">here</a>.
What Do We Know (And Not Know) About Potential
Output? from the Federal Reserve Bank of St. Louis is
available <a href="http://research.stlouisfed.org/publications/review/09/07/Basu.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">&nbsp;</th>
<th scope="col">Current</th>
<th scope="col">Last</th>
<th scope="col">December</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Federal Funds Rate, % (Target)</td>
<td>0.00 - 0.25</td>
<td>0.00 - 0.25</td>
<td>0.16</td>
<td>1.93</td>
<td>5.02</td>
<td>4.96</td>
</tr>
<tr>
<td class="firstcol">Discount Rate, %</td>
<td>0.50</td>
<td>0.50</td>
<td>0.50</td>
<td>2.39</td>
<td>5.86</td>
<td>5.96</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Trade Deficit Remains NearThe Narrowest Since 2001

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

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

Service Health

A premier time series data platform for the global strategy, research, and quant communities. 

London

Singapore

Tokyo

New York

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Featured Data Additions

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

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

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.

260205C15.jpg

260205D15.jpg

- 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

260205A2.jpg

260205B2.jpg

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.

260205C2.jpg

260205D2.jpg

- 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

260205E.jpg

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.

Economy in Brief

Jump to:

U.S. Weekly Claims for Unemployment Insurance Rise Unexpectedly but the Trend Is Still Down

EMU GDP Falls But French And German GDP Rise

U.S. Retail Sales Post Surprising, Across-the-Board Declines

U.S. Retail Sales Post Surprising, Across-the-Board Declines

FOMC Leaves Rates Unchanged; Notes Financial Market Improvement & Retail Spending Stabilization

Euro Area Industrial Output Steps Back In June

U.S. Trade Deficit Remains Near The Narrowest Since 2001

U.S. Trade Deficit Remains NearThe Narrowest Since 2001