Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810a.jpg" width="353">
Consumers&#39; near-term worry is about the poor shape of the U.S. economy and what, for many, are balance sheets loaded with too much debt. The longer-term situation is that the consumer spending cycle has passed its peak and is now being damped by an aging population. Together, these forces are causing individuals to shed debt at a record rate. The Federal Reserve reported late Friday that consumer credit outstanding during June fell for the fifth straight month and for the ninth month since last summer. The $10.3B decline followed a slightly-revised $5.4B May drop and it reduced consumer debt by a record 2.8% year-to-year. Since December that rate has accelerated to 4.3%.
Usage of revolving credit again fell sharply. The 5.3B m/m decline followed a $4.8B drop during May. The latest was the ninth decline in as many months. It lowered usage by 5.1% versus one year ago and at an 8.3% rate so far this year. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810b.jpg" width="353">
Separately, the Fed reported that non-revolving credit (autos &amp; other consumer durables), which accounts for nearly two-thirds of the total, fell a similarly hard $5.1B in June. Compared to the decline in revolving credit usage, the drop here has been less dramatic, but still substantial. The 1.4% y/y shortfall compares to a 6.8% drop after the 1990-91 recession. It is similar to the pullbacks during 1975 and even the &quot;credit crunch&quot; recession of 1980. During the last six months non-revolving consumer credit has fallen at a 1.9% annual rate.
These figures are the major input to the Fed&#39;s quarterly Flow of Funds accounts for the household sector.
Credit data are available in Haver&#39;s USECON database. The Flow of Funds data are in Haver&#39;s FFUNDS database.
5 Tips for Dealing with a Home Equity Line Freeze or Reduction from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/newsevents/press/other/20090806a.htm"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Consumer Credit (m/m Chg, SAAR)</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&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-10.3B</td>
<td>&nbsp;$-5.4B</td>
<td>-2.8%</td>
<td>1.6%</td>
<td>5.6%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-5.3B</td>
<td>$-4.8B</td>
<td>-5.1%</td>
<td>1.9%</td>
<td>7.8%</td>
<td>5.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-5.1B</td>
<td>$-0.5B</td>
<td>-1.4%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</body>
</html>

Consumers' near-term worry is about the poor shape of the U.S. economy and what, for many, are balance sheets loaded with too much debt. The longer-term situation is that the consumer spending cycle has passed its peak and is now [...]

Consumer Debt Deleveraging Continues At A Record Pace

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810a.jpg" align="left" border="0" height="265" width="353">
Consumers' near-term worry is about the poor shape of the U.S.
economy and what, for many, are balance sheets loaded with too much
debt. The longer-term situation is that the consumer spending cycle has
passed its peak and is now being damped by an aging population.
Together, these forces are causing individuals to shed debt at a record
rate. The Federal Reserve reported late Friday that consumer credit
outstanding during June fell for the fifth straight month and for the
ninth month since last summer. The $10.3B decline followed a
slightly-revised $5.4B May drop and it reduced consumer debt by a
record 2.8% year-to-year. Since December that rate has accelerated to
4.3%.
Usage of revolving credit again fell sharply. The 5.3B m/m
decline followed a $4.8B drop during May. The latest was the ninth
decline in as many months. It lowered usage by 5.1% versus one year ago
and at an 8.3% rate so far this year. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810b.jpg" align="right" border="0" height="265" width="353">
Separately, the Fed reported that non-revolving credit (autos
&amp; other consumer durables), which accounts for nearly
two-thirds of the total, fell a similarly hard $5.1B in June. Compared
to the decline in revolving credit usage, the drop here has been less
dramatic, but still substantial. The 1.4% y/y shortfall compares to a
6.8% drop after the 1990-91 recession. It is similar to the pullbacks
during 1975 and even the "credit crunch" recession of 1980. During the
last six months non-revolving consumer credit has fallen at a 1.9%
annual rate.
These figures are the major input to the Fed's quarterly Flow
of Funds accounts for the household sector.
Credit data are available in Haver's USECON
database. The Flow of Funds data are in Haver's FFUNDS
database.
5 Tips for Dealing with a Home Equity Line Freeze or
Reduction from the Federal Reserve Board can be found <a href="http://www.federalreserve.gov/newsevents/press/other/20090806a.htm">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Consumer
Credit (m/m Chg, SAAR)</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&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-10.3B</td>
<td>&nbsp;$-5.4B</td>
<td>-2.8%</td>
<td>1.6%</td>
<td>5.6%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-5.3B</td>
<td>$-4.8B</td>
<td>-5.1%</td>
<td>1.9%</td>
<td>7.8%</td>
<td>5.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-5.1B</td>
<td>$-0.5B</td>
<td>-1.4%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
French Output Begins To Stabilize 
by <a href="/comment/Brusca.html">Robert
Brusca</a> August 10, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810c.jpg" align="left" border="0" height="265" width="353">
French industrial output in June has expanded by 0.3% m/m
after rising by 2.8% in May, turning the three-month rate of growth
positive. Capital goods and intermediate goods output lead the rise.
The output of consumer goods is still falling over three months
although consumer nondurables output is looking steadier than consumer
durable goods output, which fell sharply in June. 
 

In the completed quarter to date output in France is off by
3.2% at an annual rate. Output in the quarter is stabilized by the
rising output of consumer nondurable goods and capital goods, each of
which rose at a pace of 6.4% in Q2. But consumer durables output is
still falling at a 16.1% annual rate and intermediate goods output
fell, dragging the overall growth rate of production into negative
territory for the quarter. 
 

Auto output is up strongly on auto incentives. Output for the
auto sector is up at a 266% annual rate over three months and at a 47%
annual rate in the quarter, helping to buoy the economy. 
 

On balance the French figures are offering very hopefuls signs
of stabilization in the sector. Europe is trying to find its footing
and France is part of the solution. 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">French IP
Excluding
Construction
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar exept m/m</td>
<td>Jun-09</td>
<td>May-09</td>
<td>Apr-09</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter-to-date</td>
</tr>
<tr>
<td class="firstcol">IP total</td>
<td>0.3%</td>
<td>2.8%</td>
<td>-1.4%</td>
<td>7.2%</td>
<td>-10.0%</td>
<td>-12.8%</td>
<td>-3.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Dur</td>
<td>-2.7%</td>
<td>0.9%</td>
<td>-2.3%</td>
<td>-15.1%</td>
<td>-18.6%</td>
<td>-17.6%</td>
<td>-16.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Consumer Ndur</td>
<td>0.0%</td>
<td>0.2%</td>
<td>-0.5%</td>
<td>-1.2%</td>
<td>-12.3%</td>
<td>-3.7%</td>
<td>6.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Capital</td>
<td>1.3%</td>
<td>2.7%</td>
<td>-0.1%</td>
<td>16.4%</td>
<td>-10.7%</td>
<td>-14.1%</td>
<td>6.4%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Intermed</td>
<td>-0.3%</td>
<td>3.7%</td>
<td>-0.4%</td>
<td>12.6%</td>
<td>-8.4%</td>
<td>-21.6%</td>
<td>-0.7%</td>
</tr>
<tr class="odd">
<td class="firstcol">Memo</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Auto</td>
<td>14.5%</td>
<td>11.3%</td>
<td>8.6%</td>
<td>266.7%</td>
<td>41.9%</td>
<td>-24.3%</td>
<td>47.3%</td>
</tr>
</tbody>
</table>
Japan's Current Account Balance
Improves Sharply In June 
by <a href="/comment/Curley.html">Louise
Curley</a> August 10, 2009



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810h.jpg" align="right" border="0" height="265" width="353">Japan's
Current Account increased sharply, outpacing expectations, in June to
1,799 billion yen from 1, 016 billion Yen in May.&nbsp; It was
moreover,&nbsp; the fifth successive month of increase and the year
over year change is now above the year ago figure for the first time
since November, 2007.&nbsp; The first chart shows the current
account and its major components--Goods and Services, Income and
Current Transfers. (The Chart shows the data in 100 millions of Yen,
while the table below and text figures are in billions of Yen.)
 The
balance of Trade in Goods and Services accounted for the largest part
of the June increase in the current account balance.&nbsp; <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810i.jpg" align="right" border="0" height="265" width="353">
The
positive balance on goods increased by 333 billion Yen while the
negative balance on services decreased by 172 billion Yen, resulting in
a 505 billion yen improvement in the balance on Goods and Services.
The balance on Income has become more important than the
balance on
Goods in the Current Account Balance since the second quarter of 2005
as can be seen in the second chart.&nbsp; This reflects the growth
of Japan's net international investment position as Japans direct and
portfolio investments abroad have generally exceeded foreign direct and
portfolio investments in Japan.&nbsp; The third chart shows Japan's
net international investment position. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090810j.jpg" align="right" border="0" height="265" width="353">
The June increase in Income was
200 billion yen, smaller than the goods contribution, but the actual
balance of 1,219 billion Yen remains well above the goods balance of
735 billion Yen.&nbsp; The decline in the income balance of 244
billion Yen from a year ago is due largely to the decline in returns on
portfolio investments.
 Finally, the negative balance on current
transfers declined in June by 78 billion yen, also contributing to the
improvement of the current account balance.&nbsp; 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">JAPAN</th>
<th scope="col">Jun 09</th>
<th scope="col">May 09</th>
<th scope="col">Jun 08</th>
<th scope="col">M/M Dif&nbsp;</th>
<th scope="col">Y/Y&nbsp;&nbsp;
Dif</th>
<th scope="col">2008&nbsp;</th>
<th scope="col">2007 </th>
<th scope="col"> 2006 </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Current Account (SA Bil.Yen)</td>
<td>1799</td>
<td>1016</td>
<td>1663</td>
<td>783</td>
<td>335</td>
<td>16425</td>
<td>25054</td>
<td>19965</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Goods and Services</td>
<td>658</td>
<td>153</td>
<td>120</td>
<td>505</td>
<td>538</td>
<td>1916</td>
<td>10088</td>
<td>7250</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Goods</td>
<td>735</td>
<td>402</td>
<td>347</td>
<td>333</td>
<td>388</td>
<td>4016</td>
<td>12564</td>
<td>9404</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;
Services</td>
<td>-77</td>
<td>-249</td>
<td>-227</td>
<td>172</td>
<td>150</td>
<td>-2100</td>
<td>-2475</td>
<td>-2154</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Income</td>
<td>1219</td>
<td>1019</td>
<td>1463</td>
<td>200</td>
<td>-244</td>
<td>15876</td>
<td>16326</td>
<td>13943</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Current Transfers</td>
<td>-78</td>
<td>-156</td>
<td>-119</td>
<td>78</td>
<td>41</td>
<td>-1367</td>
<td>-1360</td>
<td>-1233</td>
</tr>
</tbody>
</table>


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Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807e.jpg" align="left" border="0" height="265" width="353">
The OECD LEIs are now jumpin.&#8217; The rise is strongly
accelerating across OECD countries; even Japan whose indicator is still
falling is seeing a substantial shift in its negative growth rate to a
substantially diminished pace of decline. The detailed progressive
growth rates from 12-months to six months to three months show that the
acceleration is well in force. The OECD&#8217;s preferred reading is on the
six month growth rate. The US rate is now flat compared to declining at
a 16% pace six months ago. The European index is up at a very strong
6.4% pace after dropping at a 12% rate six months ago. Japan is falling
at a 7% rate after dropping at a 22% rate six months ago. What a
difference a half year makes. 
 

The United State&#8217;s own LEI from the Conference Board usually
carves out lower recession lows than the OECD LEI for the US. The
Conference Board indicator usually carves out higher highs in the
transition to recovery, by a small amount, as well. In this recession
however the OECD LEI for the US is much weaker than the low for the
Conference Board&#8217;s measure based on percentage drops in the respective
indices. As a result, while the OECD index has a bigger US turnaround
from its low to its present value, the positive reading on the
Conference Board LEI is far stronger that the current OECD LEI signal
(the OECD measure is flat over six months). 
 

Different measures capture different aspects of the economy&#8217;s
weakness. Right now both of these measures have the same sort of
positive momentum to different degrees but positive momentum
nonetheless. It is interesting that the European economies are showing
much more momentum in this framework. We will have to keep our eye on
the economies and see if European economic performance can live up to
the strong positive signal the OECD has for that region. 
 
 
 
 


<table border="0" cellspacing="0" width="100%">
</table>

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="7" scope="col">OECD Trend-restored leading Indicators </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td colspan="5" class="firstcol">Growth progression-SAAR</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD</td>
<td>11.0%</td>
<td>2.7%</td>
<td>-6.1%</td>
<td>-2.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD7</td>
<td>10.4%</td>
<td>1.3%</td>
<td>-7.6%</td>
<td>-3.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.E-Area</td>
<td>16.0%</td>
<td>6.4%</td>
<td>-3.2%</td>
<td>-3.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.Japan</td>
<td>-4.4%</td>
<td>-7.1%</td>
<td>-15.0%</td>
<td>-1.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD US</td>
<td>11.4%</td>
<td>0.0%</td>
<td>-8.5%</td>
<td>-3.2%</td>
</tr>
<tr class="grey4">
<td colspan="5" class="firstcol">Six month readings at 6-Mo
Intervals:</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD</td>
<td>2.7%</td>
<td>-14.2%</td>
<td>-4.2%</td>
<td>-1.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD7</td>
<td>1.3%</td>
<td>-15.8%</td>
<td>-4.2%</td>
<td>-2.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.Eur</td>
<td>6.4%</td>
<td>-12.0%</td>
<td>-6.9%</td>
<td>-0.7%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.Japan</td>
<td>-7.1%</td>
<td>-22.3%</td>
<td>2.0%</td>
<td>-5.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD US</td>
<td>0.0%</td>
<td>-16.3%</td>
<td>-4.3%</td>
<td>-2.2%</td>
</tr>
<tr class="grey1">
<td colspan="5" class="firstcol">Slowdowns indicated by BOLD
RED</td>
</tr>
</tbody>
</table>
</body></html>

The OECD LEIs are now jumpin.’ The rise is strongly accelerating across OECD countries; even Japan whose indicator is still falling is seeing a substantial shift in its negative growth rate to a substantially diminished pace of [...]

OECD LEIs Turn On A Green Light For Recovery

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807a.jpg" align="left" border="0" height="265" width="353">
Slack in the labor market developed less rapidly last month.
The Bureau of Labor Statistics indicated that nonfarm payrolls fell
247,000 during July after declines during the prior two months that
were revised slightly shallower. Expectations for July had been for a
deeper 325,000 drop in payrolls and it was the shallowest since August
of last year. Nevertheless, so far during this recession employment has
fallen by a total of 6.7 million, the record by far for a 19-month
period. In percentage terms jobs are down 4.8% since the 2007 peak,
also a record. Most recently, the payroll decline moderated to an
average 331,000 over the last three months versus a peak three-month
rate of 701,000 this past winter.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807b.jpg" align="right" border="0" height="265" width="353">
Another indication of the economy's slower rate of decline was
that the unemployment rate slipped m/m for the first time since April
of last year. The dip to 9.4% from 9.5% in July compared with
expectations for a rise to 9.6%. The rate's cycle low of 4.4% occurred
in October 2006. Last month, the dip was due to a sharp 422,000 decline
in the labor force (-0.0% y/y) as the number of "discouraged workers"
surged. This 106,000 rise in the number of workers who want a job now
but stopped looking left the y/y gain at 19.0%. Household sector
employment fell 155,000 (-3.8% y/y) which was a moderation from the
323,000-to-1,239,000 monthly declines since last August.
Also from the household survey, the median duration of
unemployment slipped m/m to 15.7 weeks but that still was up from 9.8
weeks one year ago. The ranks of the long-term unemployed, however,
jumped again m/m and, at 5.0 million, they are more than double one
year ago.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807c.jpg" align="right" border="0" height="265" width="353">
From the payroll survey, the moderation in the rate of job
loss owed to easier declines in both factory sector and private service
payrolls. Manufacturing sector jobs fell 52,000 last month and that was
the mildest decline in one year. On a three-month basis, the 110,000
average monthly decline also was nearly half the rate of this past
winter. Employment in the private service sector dropped 126,000 last
month (-3.2% y/y). Here again the three-month rate of decline of
126,000 was well-reduced from the 393,000 average of this past winter
and fall. The moderation is apparent across industries. Job cuts in the
construction sector also have moderated, but to a lesser extent.
Employment here fell a reduced 76,000 last month but the three-month
average rate of decline amounted to a still-strong 73,000 versus the
worst of 124,000 this winter.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807d.jpg" align="right" border="0" height="265" width="353">
In the government sector employment was broadly under pressure
as tax revenues lag. Government jobs rose by just 7,000 last month
(0.1% y/y) after two months of decline. Jobs with the Federal
government rose by 12,000 (+2.0% y/y) after two down months. The number
of state gov't jobs fell for the second consecutive month (-0.3% y/y)
and local gov't payrolls were unchanged (-0.1% y/y. Should
the federal government bail out the states? Lessons from past recessions
from the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/publications/fedletter/cflaugust2009_265.pdf">here</a>.
The breadth of the cutbacks in employment remained a huge
30.1% amongst industries. That is, however, improved from the worst of
this past March. Over a six-month span just 17.3% of firms raised
employment which was near the worst. In the factory sector an improved
22.3% of firms raised employment but over a six-month span just 7.2%
did.
Average hourly earnings rose 0.2% during July and the
three-month change seems to have bottomed at a 1.3% annual rate. That
compares to to roughly 4% growth from 2006 to 2008. Earnings in the
factory sector rose 0.8% and the three-month growth rate improved to
3.8%. Growth in the durable sector's earnings (NSA) jumped over the
last three months but earnings in the private service sector remained
under pressure at +1.1% during the last three months.
The figures referenced above are available in Haver's USECON
database. Additional detail can be found in the LABOR and
in the EMPL databases
Raising automotive fuel efficiency from
the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/publications/fedletter/cflseptember2009_266.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Employment:
000s</th>
<th scope="col">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">Payroll Employment</td>
<td>-247</td>
<td>-443</td>
<td>-303</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>1.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>-467</td>
<td>-322</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-52</td>
<td>-131</td>
<td>-146</td>
<td>-12.2%</td>
<td>-3.3%</td>
<td>-2.0%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-76</td>
<td>-86</td>
<td>-57</td>
<td>-14.6%</td>
<td>-5.5%</td>
<td>-0.8%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-119</td>
<td>-220</td>
<td>-91</td>
<td>-2.6%</td>
<td>0.2%</td>
<td>1.6%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.1</td>
<td>33.0</td>
<td>33.1</td>
<td>33.6 (July '08)</td>
<td>33.6</td>
<td>33.8</td>
<td>33.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2%</td>
<td>0.0%</td>
<td>0.2%</td>
<td>2.5%</td>
<td>3.8%</td>
<td>4.0%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>9.4%</td>
<td>9.5%</td>
<td>9.4%</td>
<td>5.8% (July '08)</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

Slack in the labor market developed less rapidly last month. The Bureau of Labor Statistics indicated that nonfarm payrolls fell 247,000 during July after declines during the prior two months that were revised slightly shallower. [...]

U.S. Payroll Employment Decline Eases While Unemployment Rate Falls

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807a.jpg" align="left" border="0" height="265" width="353">
Slack in the labor market developed less rapidly last month.
The Bureau of Labor Statistics indicated that nonfarm payrolls fell
247,000 during July after declines during the prior two months that
were revised slightly shallower. Expectations for July had been for a
deeper 325,000 drop in payrolls and it was the shallowest since August
of last year. Nevertheless, so far during this recession employment has
fallen by a total of 6.7 million, the record by far for a 19-month
period. In percentage terms jobs are down 4.8% since the 2007 peak,
also a record. Most recently, the payroll decline moderated to an
average 331,000 over the last three months versus a peak three-month
rate of 701,000 this past winter.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807b.jpg" align="right" border="0" height="265" width="353">
Another indication of the economy's slower rate of decline was
that the unemployment rate slipped m/m for the first time since April
of last year. The dip to 9.4% from 9.5% in July compared with
expectations for a rise to 9.6%. The rate's cycle low of 4.4% occurred
in October 2006. Last month, the dip was due to a sharp 422,000 decline
in the labor force (-0.0% y/y) as the number of "discouraged workers"
surged. This 106,000 rise in the number of workers who want a job now
but stopped looking left the y/y gain at 19.0%. Household sector
employment fell 155,000 (-3.8% y/y) which was a moderation from the
323,000-to-1,239,000 monthly declines since last August.
Also from the household survey, the median duration of
unemployment slipped m/m to 15.7 weeks but that still was up from 9.8
weeks one year ago. The ranks of the long-term unemployed, however,
jumped again m/m and, at 5.0 million, they are more than double one
year ago.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807c.jpg" align="right" border="0" height="265" width="353">
From the payroll survey, the moderation in the rate of job
loss owed to easier declines in both factory sector and private service
payrolls. Manufacturing sector jobs fell 52,000 last month and that was
the mildest decline in one year. On a three-month basis, the 110,000
average monthly decline also was nearly half the rate of this past
winter. Employment in the private service sector dropped 126,000 last
month (-3.2% y/y). Here again the three-month rate of decline of
126,000 was well-reduced from the 393,000 average of this past winter
and fall. The moderation is apparent across industries. Job cuts in the
construction sector also have moderated, but to a lesser extent.
Employment here fell a reduced 76,000 last month but the three-month
average rate of decline amounted to a still-strong 73,000 versus the
worst of 124,000 this winter.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807d.jpg" align="right" border="0" height="265" width="353">
In the government sector employment was broadly under pressure
as tax revenues lag. Government jobs rose by just 7,000 last month
(0.1% y/y) after two months of decline. Jobs with the Federal
government rose by 12,000 (+2.0% y/y) after two down months. The number
of state gov't jobs fell for the second consecutive month (-0.3% y/y)
and local gov't payrolls were unchanged (-0.1% y/y. Should
the federal government bail out the states? Lessons from past recessions
from the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/publications/fedletter/cflaugust2009_265.pdf">here</a>.
The breadth of the cutbacks in employment remained a huge
30.1% amongst industries. That is, however, improved from the worst of
this past March. Over a six-month span just 17.3% of firms raised
employment which was near the worst. In the factory sector an improved
22.3% of firms raised employment but over a six-month span just 7.2%
did.
Average hourly earnings rose 0.2% during July and the
three-month change seems to have bottomed at a 1.3% annual rate. That
compares to to roughly 4% growth from 2006 to 2008. Earnings in the
factory sector rose 0.8% and the three-month growth rate improved to
3.8%. Growth in the durable sector's earnings (NSA) jumped over the
last three months but earnings in the private service sector remained
under pressure at +1.1% during the last three months.
The figures referenced above are available in Haver's USECON
database. Additional detail can be found in the LABOR and
in the EMPL databases
Raising automotive fuel efficiency from
the Federal Reserve Bank of Chicago can be found <a href="http://www.chicagofed.org/publications/fedletter/cflseptember2009_266.pdf">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">Employment:
000s</th>
<th scope="col">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">Payroll Employment</td>
<td>-247</td>
<td>-443</td>
<td>-303</td>
<td>-4.2%</td>
<td>-0.4%</td>
<td>1.1%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Previous</td>
<td>--</td>
<td>-467</td>
<td>-322</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>-52</td>
<td>-131</td>
<td>-146</td>
<td>-12.2%</td>
<td>-3.3%</td>
<td>-2.0%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Construction</td>
<td>-76</td>
<td>-86</td>
<td>-57</td>
<td>-14.6%</td>
<td>-5.5%</td>
<td>-0.8%</td>
<td>4.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Service Producing</td>
<td>-119</td>
<td>-220</td>
<td>-91</td>
<td>-2.6%</td>
<td>0.2%</td>
<td>1.6%</td>
<td>1.8%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.1</td>
<td>33.0</td>
<td>33.1</td>
<td>33.6 (July '08)</td>
<td>33.6</td>
<td>33.8</td>
<td>33.9</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2%</td>
<td>0.0%</td>
<td>0.2%</td>
<td>2.5%</td>
<td>3.8%</td>
<td>4.0%</td>
<td>3.9%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>9.4%</td>
<td>9.5%</td>
<td>9.4%</td>
<td>5.8% (July '08)</td>
<td>5.8%</td>
<td>4.6%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
OECD LEIs Turn On A Green Light
For Recovery 
by <a href="/comment/Brusca.html">Robert
Brusca</a> August 7, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090807e.jpg" align="left" border="0" height="265" width="353">
The OECD LEIs are now jumpin.&#8217; The rise is strongly
accelerating across OECD countries; even Japan whose indicator is still
falling is seeing a substantial shift in its negative growth rate to a
substantially diminished pace of decline. The detailed progressive
growth rates from 12-months to six months to three months show that the
acceleration is well in force. The OECD&#8217;s preferred reading is on the
six month growth rate. The US rate is now flat compared to declining at
a 16% pace six months ago. The European index is up at a very strong
6.4% pace after dropping at a 12% rate six months ago. Japan is falling
at a 7% rate after dropping at a 22% rate six months ago. What a
difference a half year makes. 
 

The United State&#8217;s own LEI from the Conference Board usually
carves out lower recession lows than the OECD LEI for the US. The
Conference Board indicator usually carves out higher highs in the
transition to recovery, by a small amount, as well. In this recession
however the OECD LEI for the US is much weaker than the low for the
Conference Board&#8217;s measure based on percentage drops in the respective
indices. As a result, while the OECD index has a bigger US turnaround
from its low to its present value, the positive reading on the
Conference Board LEI is far stronger that the current OECD LEI signal
(the OECD measure is flat over six months). 
 

Different measures capture different aspects of the economy&#8217;s
weakness. Right now both of these measures have the same sort of
positive momentum to different degrees but positive momentum
nonetheless. It is interesting that the European economies are showing
much more momentum in this framework. We will have to keep our eye on
the economies and see if European economic performance can live up to
the strong positive signal the OECD has for that region. 
 
 
 
 


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col">OECD
Trend-restored leading Indicators </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td colspan="5" class="firstcol">Growth
progression-SAAR</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD</td>
<td>11.0%</td>
<td>2.7%</td>
<td>-6.1%</td>
<td>-2.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD7</td>
<td>10.4%</td>
<td>1.3%</td>
<td>-7.6%</td>
<td>-3.3%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.E-Area</td>
<td>16.0%</td>
<td>6.4%</td>
<td>-3.2%</td>
<td>-3.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.Japan</td>
<td>-4.4%</td>
<td>-7.1%</td>
<td>-15.0%</td>
<td>-1.9%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD US</td>
<td>11.4%</td>
<td>0.0%</td>
<td>-8.5%</td>
<td>-3.2%</td>
</tr>
<tr class="grey4">
<td colspan="5" class="firstcol">Six
month readings at 6-Mo
Intervals:</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD</td>
<td>2.7%</td>
<td>-14.2%</td>
<td>-4.2%</td>
<td>-1.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD7</td>
<td>1.3%</td>
<td>-15.8%</td>
<td>-4.2%</td>
<td>-2.5%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.Eur</td>
<td>6.4%</td>
<td>-12.0%</td>
<td>-6.9%</td>
<td>-0.7%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD.Japan</td>
<td>-7.1%</td>
<td>-22.3%</td>
<td>2.0%</td>
<td>-5.6%</td>
</tr>
<tr class="grey2">
<td class="firstcol">OECD US</td>
<td>0.0%</td>
<td>-16.3%</td>
<td>-4.3%</td>
<td>-2.2%</td>
</tr>
<tr class="grey1">
<td colspan="5" class="firstcol">Slowdowns
indicated by BOLD
RED</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Payroll Employment DeclineEases While Unemployment Rate Falls

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806d.jpg" align="left" border="0" height="265" width="353">
German new orders rose by 4.5% in June after rising by 4.4% in
May. Orders are up and at a 42% annual rate over three-months and STILL
they stand lower by 23.7% than they did one year ago. In the newly
completed second quarter, orders are up at a 26.8% annual rate. While
real sector sales in mining and MFG are up at a 3.4% pace in the
quarter. Germany is beginning to turn the corner, despite ongoing
weakness in retail sales. 
 

German domestic orders barely nudged higher rising by nearly
rounding error (0.2%) in June. Foreign orders spurted by 8.3% putting
in their second strong month in a row. Exports remain the lifeblood of
the German economy. The report that Hungary&#8217;s industrial output rose
for the second month in a row is good news for Germany, suggesting that
eastern European export markets are among those that are reviving. 
 

In June German real sector sales for consumer goods rose by
0.2% as consumer durables plunged by 3.7%. Capital goods real sales
rose by 1.2% after spurting by 9.2% in May. Intermediates goods sales
rose by 2.8%. German real sector sales were up across the abroad in the
quarter as well with the exception of consumer durables, where sales
fell in the quarter at a hefty -8.4% annual rate. 
 
 
 
 


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="9" scope="col">
German Orders and Sales By Sector and Origin
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jun-09</td>
<td>May-09</td>
<td>Apr-09</td>
<td>3-MO</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>YrAgo</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>4.5%</td>
<td>4.4%</td>
<td>0.1%</td>
<td>42.6%</td>
<td>19.4%</td>
<td>-23.7%</td>
<td>-8.0%</td>
<td>26.8%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>8.3%</td>
<td>4.9%</td>
<td>-0.9%</td>
<td>61.2%</td>
<td>27.0%</td>
<td>-24.2%</td>
<td>-11.4%</td>
<td>40.0%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>0.2%</td>
<td>4.1%</td>
<td>1.1%</td>
<td>23.8%</td>
<td>11.3%</td>
<td>-23.1%</td>
<td>-3.6%</td>
<td>13.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="9">Real Sector Sales</td>

</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>1.4%</td>
<td>4.6%</td>
<td>-2.0%</td>
<td>16.6%</td>
<td>8.0%</td>
<td>-17.4%</td>
<td>0.9%</td>
<td>3.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>0.2%</td>
<td>-2.2%</td>
<td>4.0%</td>
<td>8.0%</td>
<td>3.9%</td>
<td>-6.8%</td>
<td>-3.9%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-3.7%</td>
<td>6.1%</td>
<td>-1.2%</td>
<td>3.8%</td>
<td>1.9%</td>
<td>-21.8%</td>
<td>-1.6%</td>
<td>-8.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer Nondurables</td>
<td>0.6%</td>
<td>-3.2%</td>
<td>4.6%</td>
<td>7.8%</td>
<td>3.8%</td>
<td>-4.1%</td>
<td>-4.2%</td>
<td>6.7%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>1.2%</td>
<td>9.2%</td>
<td>-7.3%</td>
<td>10.1%</td>
<td>4.9%</td>
<td>-22.3%</td>
<td>3.9%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>2.8%</td>
<td>2.8%</td>
<td>1.5%</td>
<td>32.0%</td>
<td>14.9%</td>
<td>-18.2%</td>
<td>1.2%</td>
<td>9.7%</td>
</tr>
<tr>
<td class="firstcol">All MFG-Sales</td>
<td>1.5%</td>
<td>4.4%</td>
<td>-2.0%</td>
<td>16.6%</td>
<td>8.0%</td>
<td>-17.6%</td>
<td>0.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
</body></html>

German new orders rose by 4.5% in June after rising by 4.4% in May. Orders are up and at a 42% annual rate over three-months and STILL they stand lower by 23.7% than they did one year ago. In the newly completed second quarter, orders [...]

German Orders Surge Again

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806a.jpg" align="left" border="0" height="265" width="353">
Improvement in the U.S. labor market still is evident, but
lately it's been a halting trend. The latest figures from the Labor
Department indicate that initial claims for unemployment insurance fell
last week to 550,000 and more than reversed the prior week's unrevised
increase. For all of July, claims fell 9.4% 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, slipped to 555,250 which was its lowest level since
late-January. A rise in weekly claims to 580,000 had been expected.
The Bureau of Labor Statistics will release the report on July
nonfarm payrolls tomorrow. During the last ten years, there has been an
86% correlation between the level of initial unemployment insurance
claims and the m/m change in payroll employment.
The Labor Department indicated that the largest increases in
initial claims for the week ending July 25 were in Ohio (+891, +3.6%
y/y), Oklahoma (+644, +121% y/y), Mississippi (+222, -5.2% y/y),
Louisiana (+154, +33.7% y/y), and Alaska (+129, +51.9% y/y), while the
largest decreases were in North Carolina (-9,809, +17.7% y/y), Michigan
(-9,085, +20.9% y/y), Florida (-8,714, +11.9% y/y), Georgia (-6,948,
+61.5% y/y), and Alabama (-3,822, +31.8% y/y).
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806b.jpg" align="right" border="0" height="265" width="353">
A sideways movement in continuing claims for unemployment
insurance also became apparent last month. For the latest week, they
rose a modest 69,000 and that was enough to reverse the declines during
the prior two weeks. Continuing claims provide an indication of
workers' ability to find employment and the level of 6,310,000
claims is up sharply from the year-ago level. The four-week
average of continuing claims fell back to 6,378,750 and that was the
lowest since late-April. The series dates back to 1966.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806c.jpg" align="right" border="0" height="265" 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
18 were in Puerto Rico (8.0 percent), Michigan (6.7), Oregon (6.5),
Pennsylvania (6.5), Nevada (6.1), Wisconsin (5.7), Connecticut (5.5),
New Jersey (5.5), California (5.4), Rhode Island (5.3), and South
Carolina (5.3). The lowest rates were in South Dakota (1.4) and North
Dakota (1.5), Virginia (2.5), Wyoming (3.0), Texas (3.1), Maine (3.3),
Colorado (3.3), Maryland (3.7), Minnesota (3.8), Florida (4.3),
Mississippi (4.3), New York (4.4) and Georgia (4.4).
The unemployment insurance claims data is available in Haver'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">08/01/09</th>
<th scope="col">07/25/09</th>
<th scope="col">07/18/09</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>550</td>
<td>588</td>
<td>559</td>
<td>22.2%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,310</td>
<td>6,241</td>
<td>88.7%</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>4.7</td>
<td>2.5</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

Improvement in the U.S. labor market still is evident, but lately it's been a halting trend. The latest figures from the Labor Department indicate that initial claims for unemployment insurance fell last week to 550,000 and more than [...]

U.S. Weekly Claims For Jobless Insurance Inch Lower While Continuing Claims Tick Higher

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<html><head>
<style>
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<body>
 



<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806a.jpg" align="left" border="0" height="265" width="353">
Improvement in the U.S. labor market still is evident, but
lately it's been a halting trend. The latest figures from the Labor
Department indicate that initial claims for unemployment insurance fell
last week to 550,000 and more than reversed the prior week's unrevised
increase. For all of July, claims fell 9.4% 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, slipped to 555,250 which was its lowest level since
late-January. A rise in weekly claims to 580,000 had been expected.
The Bureau of Labor Statistics will release the report on July
nonfarm payrolls tomorrow. During the last ten years, there has been an
86% correlation between the level of initial unemployment insurance
claims and the m/m change in payroll employment.
The Labor Department indicated that the largest increases in
initial claims for the week ending July 25 were in Ohio (+891, +3.6%
y/y), Oklahoma (+644, +121% y/y), Mississippi (+222, -5.2% y/y),
Louisiana (+154, +33.7% y/y), and Alaska (+129, +51.9% y/y), while the
largest decreases were in North Carolina (-9,809, +17.7% y/y), Michigan
(-9,085, +20.9% y/y), Florida (-8,714, +11.9% y/y), Georgia (-6,948,
+61.5% y/y), and Alabama (-3,822, +31.8% y/y).
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806b.jpg" align="right" border="0" height="265" width="353">
A sideways movement in continuing claims for unemployment
insurance also became apparent last month. For the latest week, they
rose a modest 69,000 and that was enough to reverse the declines during
the prior two weeks. Continuing claims provide an indication of
workers' ability to find employment and the level of 6,310,000
claims is up sharply from the year-ago level. The four-week
average of continuing claims fell back to 6,378,750 and that was the
lowest since late-April. The series dates back to 1966.
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806c.jpg" align="right" border="0" height="265" 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
18 were in Puerto Rico (8.0 percent), Michigan (6.7), Oregon (6.5),
Pennsylvania (6.5), Nevada (6.1), Wisconsin (5.7), Connecticut (5.5),
New Jersey (5.5), California (5.4), Rhode Island (5.3), and South
Carolina (5.3). The lowest rates were in South Dakota (1.4) and North
Dakota (1.5), Virginia (2.5), Wyoming (3.0), Texas (3.1), Maine (3.3),
Colorado (3.3), Maryland (3.7), Minnesota (3.8), Florida (4.3),
Mississippi (4.3), New York (4.4) and Georgia (4.4).
The unemployment insurance claims data is available in Haver'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">08/01/09</th>
<th scope="col">07/25/09</th>
<th scope="col">07/18/09</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>550</td>
<td>588</td>
<td>559</td>
<td>22.2%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,310</td>
<td>6,241</td>
<td>88.7%</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>4.7</td>
<td>2.5</td>
<td>2.5</td>
<td>1.9</td>
<td>1.9</td>
</tr>
</tbody>
</table>
German Orders Surge Again 
by <a href="/comment/Brusca.html">Robert
Brusca</a> August 6, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090806d.jpg" align="left" border="0" height="265" width="353">
German new orders rose by 4.5% in June after rising by 4.4% in
May. Orders are up and at a 42% annual rate over three-months and STILL
they stand lower by 23.7% than they did one year ago. In the newly
completed second quarter, orders are up at a 26.8% annual rate. While
real sector sales in mining and MFG are up at a 3.4% pace in the
quarter. Germany is beginning to turn the corner, despite ongoing
weakness in retail sales. 
 

German domestic orders barely nudged higher rising by nearly
rounding error (0.2%) in June. Foreign orders spurted by 8.3% putting
in their second strong month in a row. Exports remain the lifeblood of
the German economy. The report that Hungary&#8217;s industrial output rose
for the second month in a row is good news for Germany, suggesting that
eastern European export markets are among those that are reviving. 
 

In June German real sector sales for consumer goods rose by
0.2% as consumer durables plunged by 3.7%. Capital goods real sales
rose by 1.2% after spurting by 9.2% in May. Intermediates goods sales
rose by 2.8%. German real sector sales were up across the abroad in the
quarter as well with the exception of consumer durables, where sales
fell in the quarter at a hefty -8.4% annual rate. 
 
 
 
 


<table border="0" cellspacing="0" width="100%">
</table>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col">German
Orders and Sales By Sector and Origin
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Real and SA</td>
<td colspan="3">% M/M</td>
<td colspan="5">% Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Jun-09</td>
<td>May-09</td>
<td>Apr-09</td>
<td>3-MO</td>
<td>6-Mo</td>
<td>12-Mo</td>
<td>YrAgo</td>
<td>QTR-2-Date</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>4.5%</td>
<td>4.4%</td>
<td>0.1%</td>
<td>42.6%</td>
<td>19.4%</td>
<td>-23.7%</td>
<td>-8.0%</td>
<td>26.8%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>8.3%</td>
<td>4.9%</td>
<td>-0.9%</td>
<td>61.2%</td>
<td>27.0%</td>
<td>-24.2%</td>
<td>-11.4%</td>
<td>40.0%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>0.2%</td>
<td>4.1%</td>
<td>1.1%</td>
<td>23.8%</td>
<td>11.3%</td>
<td>-23.1%</td>
<td>-3.6%</td>
<td>13.5%</td>
</tr>
<tr class="odd">
<td class="firstcol" colspan="9">Real
Sector Sales</td>
</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>1.4%</td>
<td>4.6%</td>
<td>-2.0%</td>
<td>16.6%</td>
<td>8.0%</td>
<td>-17.4%</td>
<td>0.9%</td>
<td>3.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer</td>
<td>0.2%</td>
<td>-2.2%</td>
<td>4.0%</td>
<td>8.0%</td>
<td>3.9%</td>
<td>-6.8%</td>
<td>-3.9%</td>
<td>4.7%</td>
</tr>
<tr>
<td class="firstcol">Consumer Durables</td>
<td>-3.7%</td>
<td>6.1%</td>
<td>-1.2%</td>
<td>3.8%</td>
<td>1.9%</td>
<td>-21.8%</td>
<td>-1.6%</td>
<td>-8.4%</td>
</tr>
<tr>
<td class="firstcol">Consumer Nondurables</td>
<td>0.6%</td>
<td>-3.2%</td>
<td>4.6%</td>
<td>7.8%</td>
<td>3.8%</td>
<td>-4.1%</td>
<td>-4.2%</td>
<td>6.7%</td>
</tr>
<tr>
<td class="firstcol">Capital Goods</td>
<td>1.2%</td>
<td>9.2%</td>
<td>-7.3%</td>
<td>10.1%</td>
<td>4.9%</td>
<td>-22.3%</td>
<td>3.9%</td>
<td>1.2%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Goods</td>
<td>2.8%</td>
<td>2.8%</td>
<td>1.5%</td>
<td>32.0%</td>
<td>14.9%</td>
<td>-18.2%</td>
<td>1.2%</td>
<td>9.7%</td>
</tr>
<tr>
<td class="firstcol">All MFG-Sales</td>
<td>1.5%</td>
<td>4.4%</td>
<td>-2.0%</td>
<td>16.6%</td>
<td>8.0%</td>
<td>-17.6%</td>
<td>0.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Weekly Claims For JoblessInsurance Inch Lower While Continuing Claims Tick Higher

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

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Andrew Cates

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

260205Z1.jpg

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

260205Z2.jpg

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

260205Z3.jpg

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

260205Z4.jpg

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

260205Z5.jpg

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

260205Z6.jpg

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

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

260206E.jpg

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

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

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

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

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

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

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

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

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

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

Germany

German IP Reveals Chaotic Trends

Winnie Tapasanun

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

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

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

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

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

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

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

Sandy Batten

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

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

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

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

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

U.S. Initial Unemployment Claims Surged in Latest Week

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

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

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

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

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

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

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

Economy in Brief

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