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/090529e.jpg" align="left" border="0" height="265" width="353">
Retail sales are falling on a Yr/Yr basis but, in recent
months, spending has been higher; over three months spending (ex-autos)
is actually rising. As we saw in the first quarter German GDP report,
consumers have been mildly affected by the German downturn but the real
weakness has been in the industrial measures such as business
investment, exports plus in housing. Find that retail sales are holding
up is a good sign that the German recession is not spreading and that
its social welfare support system is holding together the ability of
consumers to participate in the economy. 
 

German consumption figures are somewhat encouraging. Still the
German consumer is not likely to be an engine of growth. Consumption is
a core part of GDP that is stabilizing and that is an important
contribution. The industrial weakness is still present and remains a
threat, But that depends on demand elsewhere since the threatening
weakness is to German investment goods output and exports. Exports
remain weak. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col">German Real and Nominal Retail Sales
</th><th scope="col">QTR</th>

</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Nominal</td>
<td>Apr-09</td>
<td>Mar-09</td>
<td>Feb-09</td>
<td>3-MO</td>
<td>6-MO</td>
<td>12-MO</td>
<td>YrAgo</td>
<td>Saar</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail Ex auto</td>
<td>0.9%</td>
<td>-0.6%</td>
<td>0.2%</td>
<td>2.0%</td>
<td>-2.7%</td>
<td>-0.4%</td>
<td>-1.6%</td>
<td>3.5%</td>
</tr>
<tr class="odd">
<td class="firstcol">Real</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Retail Ex auto</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>0.0%</td>
<td>0.4%</td>
<td>-1.5%</td>
<td>-0.3%</td>
<td>-4.5%</td>
<td>1.5%</td>
</tr>
</tbody>
</table>
</body></html>

Retail sales are falling on a Yr/Yr basis but, in recent months, spending has been higher; over three months spending (ex-autos) is actually rising. As we saw in the first quarter German GDP report, consumers have been mildly affected [...]

German Retail Sales Lose Some Weakness

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/090528f.jpg" width="353">
Perhaps the factory sector&#39;s distress is nearing its end. At least some moderation of last year&#39;s woes was evident in the latest report of durable goods orders. During April orders rose 1.9% following a 2.1% March decline which was greater than reported initially. Consensus expectations were for a 0.5% April increase and during the last three months orders have risen at a 1.4% annual rate.That follows a 5.8% decline during all of last year.
A 5.4% rise (-27.5% y/y) in transportation equipment orders led last month&#39;s increase in total durables bookings after having been unchanged during March. Orders for motor vehicles &amp; parts recovered 2.4% (-24.7% y/y) for the first monthly increase since last September. Machinery orders also rose but by a lesser 2.4% (-33.4% y/y) and electrical equipment orders ticked up 0.3% (-24.9% y/y). Orders for computers &amp; electronic products, however, worked lower again and fell 2.7% (-10.9% y/y). Finally, primary metals bookings did increase 1.0% for the month but remained down by one-half from April of last year.
As is common during recession, the capital goods sector will lag any improvement in new orders for early cycle products. As such, orders for nondefense capital goods fell 2.0% last month and they have fallen in nearly each month since early last year. Orders excluding aircraft also fell by 1.5% during April and they are down by one-quarter over the last year. During the last ten years there has been an 80% correlation between the y/y change in nondefense capital goods orders and the change in equipment &amp; software spending in the GDP accounts. The correlation of the GDP figure with capital goods shipments is, as one would expect, a larger 92%.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528g.jpg" width="353">
Shipments of durable goods continued lower and slipped 0.2% last month (-18.4% y/y). They have fallen at a 22.8% annual rate so far this year and the decline has been accompanied by a like three-month rate of decline in industrial production of durable goods. During the last ten years, there has been an 80% correlation between the change in shipments of durable goods and the change in durables industrial production.
Inventories of durable goods fell for the fourth consecutive month. The 0.8% decline was the fourth in a row and it brought the annual rate of change to -13.7%, the quickest since 2001. Decumulation of metals and machinery inventories has been notably fast. Backlogs in order books have fallen in each of the last seven months and during the last year by 6.7%, a rate of decline which is the sharpest since 2003.
The durable goods figures are available in Haver&#39;s USECON database.
Recession and Recovery Across the Nation: Lessons from History from the Federal Reserve Bank of Kansas City is available <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/pdf/09q2Wilkerson.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS Classification</a> (%)</th>
<th scope="col">April</th>
<th scope="col">March</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">Durable Goods Orders</td>
<td>1.9</td>
<td>-2.1</td>
<td>-24.4</td>
<td>-5.8</td>
<td>1.4</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp; Excluding Transportation</td>
<td>0.8</td>
<td>-2.7</td>
<td>-23.3</td>
<td>-1.2</td>
<td>-0.3</td>
<td>9.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-2.0</td>
<td>-0.9</td>
<td>-32.8</td>
<td>-6.8</td>
<td>3.5</td>
<td>9.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-1.5</td>
<td>-1.4</td>
<td>-24.4</td>
<td>-0.3</td>
<td>-2.7</td>
<td>10.7</td>
</tr>
</tbody>
</table>
</body>
</html>

Perhaps the factory sector's distress is nearing its end. At least some moderation of last year's woes was evident in the latest report of durable goods orders. During April orders rose 1.9% following a 2.1% March decline which was [...]

U.S. Durable Goods Orders Recover Earlier Decline And Are Up Slightly 'YTD

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528c.jpg" width="353">
Another tenuous sign improvement in the labor market came from last week&#39;s decline in initial claims for unemployment insurance, down a modest 13,000 to 623,000. That followed an upwardly revised level during the prior week of 636,000. Though still at a high level, initial claims are down from their March peak of 674,000. The four-week average of claims, which smoothes out some of the volatility in the weekly numbers, ticked down to 626,750, near the lowest level since mid-February. The Consensus expectation was for 630,000 claims last week.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528d.jpg" width="353">
The Labor Department indicated that the largest increases in initial claims for the week ending May 16 were in California (+5,447), North Carolina (+2,693), Georgia (+1,595), Washington (+764), and Florida (+528), while the largest decreases were in Michigan (-9,758), Kentucky (-4,323), Illinois (-3,425), Indiana (-3,081), and Ohio (-2,522).
Despite the improvement in initial claims, the job market remains notably weak. Continuing claims for unemployment insurance, which provide an indication of workers&#39; ability to find employment increased to another record high of 6,788,000, more than twice the year ago level. The series dates back to 1966. Further indicating that the job market remains weak, the four-week average of continuing claims also rose to another record of 6,608,250.
The lack of hiring continued to push the insured unemployment rate higher to 5.1%. That level was more than double last April and the highest level since 1983. 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.Clearly, the latest weekly figure understates labor market distress in some states. The highest insured unemployment rates in the week May 9 were in Oregon (7.3 percent), Michigan (7.1), Nevada (6.4), Pennsylvania (6.4), Puerto Rico (6.2), Wisconsin (6.0), Idaho (5.7), California (5.5), North Carolina (5.5), and Illinois (5.4).
The unemployment insurance claims data is available in Haver&#39;s WEEKLY database.
The recession in perspective from the Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/index.cfm">here.</a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">05/23/09</th>
<th scope="col">05/16/09</th>
<th scope="col">05/09/09</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>
<td class="firstcol">Initial Claims</td>
<td>623</td>
<td>636</td>
<td>643</td>
<td>64.8%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,788</td>
<td>6,678</td>
<td>118.8%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
</tbody>
</table>


</html>

Another tenuous sign improvement in the labor market came from last week's decline in initial claims for unemployment insurance, down a modest 13,000 to 623,000. That followed an upwardly revised level during the prior week of [...]

U.S. Initial Jobless Insurance Claims Slip Again Though Continuing Claims Reach Another Record

<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/090528a.jpg" width="353">
Sales of new single-family homes during April showed further signs of forming a bottom after having declined by more than three-quarters since 2005. Sales were stable at 352,000 units (AR) after a downwardly revised March decline. They have varied in a range of 329,000 to 362,000 so far this year. April sales fell short of Consensus expectations for 360,000 units. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528b.jpg" width="353">
Around the country sales patterns vary. Sales in Midwest were stable last month near their record low while sales in the Northeast also were stable at a new record low. Sales in the South picked up slightly as did sales out West.
The modest firming of home sales gave rise to an increase in the median price for a new single-family home. At $209,700 the figure was at its highest since November, however, that increase may be due to a usual seasonal gain. Since their peak early in 2007, new home prices have fallen by roughly one-quarter.
Price weakness has helped move the inventory of unsold homes. It&#39;s down by nearly one-half since the peak during 2006 and at the lowest level since 2001. In each of the country&#39;s regions, the inventory is down by roughly one-third just during the last year.The month&#39;s supply of new homes for sale also has started to drop, in April to the lowest level since last July. But there&#39;s more inventory to move with lower prices if sales remain low.
The new home sales figures are available in Haver&#39;s USECON database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">US New Homes</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y (%)</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Sales (SAAR, 000s)</td>
<td>352</td>
<td>351</td>
<td>-34.0</td>
<td>479</td>
<td>768</td>
<td>1,049</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>19</td>
<td>19</td>
<td>&nbsp;-52.5</td>
<td>35</td>
<td>64</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>45</td>
<td>45</td>
<td>-45.8</td>
<td>69</td>
<td>118</td>
<td>161</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>212</td>
<td>206</td>
<td>-25.4</td>
<td>264</td>
<td>408</td>
<td>559</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>76</td>
<td>79</td>
<td>-39.7</td>
<td>111</td>
<td>178</td>
<td>266</td>
</tr>
<tr>
<td class="firstcol">Median Price (NSA, $)</td>
<td>209,700</td>
<td>202,200</td>
<td>-14.9</td>
<td>230,408</td>
<td>243,742</td>
<td>243,067</td>
</tr>
</tbody>
</table>
</body>
</html>

Sales of new single-family homes during April showed further signs of forming a bottom after having declined by more than three-quarters since 2005. Sales were stable at 352,000 units (AR) after a downwardly revised March decline. [...]

U.S. New Home Sales Form A Bottom While The Level of Unsold Homes Is At Its Lowest 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/090528f.jpg" align="left" border="0" height="265" width="353">
Perhaps the factory sector's distress is nearing its end. At
least some moderation of last year's woes was evident in the latest
report of durable goods orders. During April orders rose 1.9% following
a 2.1% March decline which was greater than reported initially.
Consensus expectations were for a 0.5% April increase and during the
last three months orders have risen at a 1.4% annual rate.That follows
a 5.8% decline during all of last year.
A 5.4% rise (-27.5% y/y) in transportation equipment orders
led last month's increase in total durables bookings after having been
unchanged during March. Orders for motor vehicles &amp; parts
recovered 2.4% (-24.7% y/y) for the first monthly increase since last
September. Machinery orders also rose but by a lesser 2.4% (-33.4% y/y)
and electrical equipment orders ticked up 0.3% (-24.9% y/y). Orders for
computers &amp; electronic products, however, worked lower again
and fell 2.7% (-10.9% y/y). Finally, primary metals bookings did
increase 1.0% for the month but remained down by one-half from April of
last year.
As is common during recession, the capital goods sector will
lag any improvement in new orders for early cycle products. As such,
orders for nondefense capital goods fell 2.0% last month and they have
fallen in nearly each month since early last year. Orders excluding
aircraft also fell by 1.5% during April and they are down by
one-quarter over the last year. During the last ten years there has
been an 80% correlation between the y/y change in nondefense capital
goods orders and the change in equipment &amp; software spending in
the GDP accounts. The correlation of the GDP figure with capital goods
shipments is, as one would expect, a larger 92%.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528g.jpg" align="right" border="0" height="265" width="353">
Shipments of durable goods continued lower and slipped 0.2%
last month (-18.4% y/y). They have fallen at a 22.8% annual rate so far
this year and the decline has been accompanied by a like three-month
rate of decline in industrial production of durable goods. During the
last ten years, there has been an 80% correlation between the change in
shipments of durable goods and the change in durables industrial
production.
Inventories of durable goods fell for the fourth consecutive
month. The 0.8% decline was the fourth in a row and it brought the
annual rate of change to -13.7%, the quickest since 2001. Decumulation
of metals and machinery inventories has been notably fast. Backlogs in
order books have fallen in each of the last seven months and during the
last year by 6.7%, a rate of decline which is the sharpest since 2003.
The durable goods figures are available in Haver's USECON
database.
Recession and Recovery Across the Nation:
Lessons from History from the Federal Reserve Bank of
Kansas City is available <a href="http://www.kansascityfed.org/PUBLICAT/ECONREV/pdf/09q2Wilkerson.pdf">
here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@ED/@ED01/@ED0101/@ED0101.HTM">NAICS
Classification</a> (%)</th>
<th scope="col">April</th>
<th scope="col">March</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">Durable Goods Orders</td>
<td>1.9</td>
<td>-2.1</td>
<td>-24.4</td>
<td>-5.8</td>
<td>1.4</td>
<td>6.2</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Excluding Transportation</td>
<td>0.8</td>
<td>-2.7</td>
<td>-23.3</td>
<td>-1.2</td>
<td>-0.3</td>
<td>9.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Nondefense Capital Goods</td>
<td>-2.0</td>
<td>-0.9</td>
<td>-32.8</td>
<td>-6.8</td>
<td>3.5</td>
<td>9.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Excluding Aircraft</td>
<td>-1.5</td>
<td>-1.4</td>
<td>-24.4</td>
<td>-0.3</td>
<td>-2.7</td>
<td>10.7</td>
</tr>
</tbody>
</table>
U.S. New Home Sales Form A Bottom
While The Level of Unsold Homes Is At Its Lowest Since 2001 
by <a href="/comment/Moeller.html">Tom
Moeller</a> May 28, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528a.jpg" align="left" border="0">
Sales of new single-family homes during April showed further
signs of forming a bottom after having declined by more than
three-quarters since 2005. Sales were stable at 352,000 units (AR)
after a downwardly revised March decline. They have varied in a range
of 329,000 to 362,000 so far this year. April sales fell short of
Consensus expectations for 360,000 units. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528b.jpg" align="right" border="0">
Around the country sales patterns vary. Sales in Midwest were
stable last month near their record low while sales in the Northeast
also were stable at a new record low. Sales in the South picked up
slightly as did sales out West.
The modest firming of home sales gave rise to an increase in
the median price for a new single-family home. At $209,700 the figure
was at its highest since November, however, that increase may be due to
a usual seasonal gain. Since their peak early in 2007, new home prices
have fallen by roughly one-quarter.
Price weakness has helped move the inventory of unsold homes.
It's down by nearly one-half since the peak during 2006 and at the
lowest level since 2001. In each of the country's regions, the
inventory is down by roughly one-third just during the last year.The
month's supply of new homes for sale also has started to drop, in April
to the lowest level since last July. But there's more inventory to move
with lower prices if sales remain low.
The new home sales figures are available in Haver's USECON
database.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">US
New Homes</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">Y/Y (%)</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Sales
(SAAR, 000s)</td>
<td>352</td>
<td>351</td>
<td>-34.0</td>
<td>479</td>
<td>768</td>
<td>1,049</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Northeast</td>
<td>19</td>
<td>19</td>
<td>&nbsp;-52.5</td>
<td>35</td>
<td>64</td>
<td>64</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>45</td>
<td>45</td>
<td>-45.8</td>
<td>69</td>
<td>118</td>
<td>161</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; South</td>
<td>212</td>
<td>206</td>
<td>-25.4</td>
<td>264</td>
<td>408</td>
<td>559</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>76</td>
<td>79</td>
<td>-39.7</td>
<td>111</td>
<td>178</td>
<td>266</td>
</tr>
<tr>
<td class="firstcol">Median Price
(NSA, $)</td>
<td>209,700</td>
<td>202,200</td>
<td>-14.9</td>
<td>230,408</td>
<td>243,742</td>
<td>243,067</td>
</tr>
</tbody>
</table>
U.S. Initial Jobless Insurance
Claims Slip Again Though Continuing Claims Reach Another Record 
by <a href="/comment/Moeller.html">Tom
Moeller</a> May 28, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528c.jpg" align="left" border="0">
Another tenuous sign improvement in the labor market came from
last week's decline in initial claims for unemployment insurance, down
a modest 13,000 to 623,000. That followed an upwardly revised level
during the prior week of 636,000. Though still at a high level, initial
claims are down from their March peak of 674,000. The four-week average
of claims, which smoothes out some of the volatility in the weekly
numbers, ticked down to 626,750, near the lowest level since
mid-February. The Consensus expectation was for 630,000 claims last
week.
The Labor Department indicated that the largest increases in
initial claims for the week ending May 16 were in California (+5,447),
North Carolina (+2,693), Georgia (+1,595), Washington (+764), and
Florida (+528), while the largest decreases were in Michigan (-9,758),
Kentucky (-4,323), Illinois (-3,425), Indiana (-3,081), and Ohio
(-2,522).<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528d.jpg" align="right" border="0">
Despite the improvement in initial claims, the job market
remains notably weak. Continuing claims for unemployment insurance,
which provide an indication of workers' ability to find employment
increased to another record high of 6,788,000, more than
twice the year ago level. The series dates back to 1966.
Further indicating that the job market remains weak, the four-week
average of continuing claims also rose to another record of 6,608,250.
The lack of hiring continued to push the insured unemployment
rate higher to 5.1%. That level was more than double last April and the
highest level since 1983. 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.Clearly, the latest weekly figure understates labor market
distress in some states. The highest insured unemployment rates in the
week May 9 were in Oregon (7.3 percent), Michigan (7.1), Nevada (6.4),
Pennsylvania (6.4), Puerto Rico (6.2), Wisconsin (6.0), Idaho (5.7),
California (5.5), North Carolina (5.5), and Illinois (5.4).
The unemployment insurance claims data is available in Haver's
WEEKLY database.
The recession in perspective from the
Federal Reserve Bank of Minneapolis can be found <a href="http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/index.cfm">here.</a>

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a>&nbsp;</th>
<th scope="col">05/23/09</th>
<th scope="col">05/16/09</th>
<th scope="col">05/09/09</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>
<td class="firstcol">Initial Claims</td>
<td>623</td>
<td>636</td>
<td>643</td>
<td>64.8%</td>
<td>420</td>
<td>321</td>
<td>313</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>6,788</td>
<td>6,678</td>
<td>118.8%</td>
<td>3,342</td>
<td>2,552</td>
<td>2,459</td>
</tr>
</tbody>
</table>
French Consumer Begins To Feel
Less Stressed 
by <a href="/comment/Brusca.html">Robert
Brusca&nbsp;</a> May 27, 2009


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090528e.jpg" align="left" border="0" height="265" width="353">
The French consumer is gradually beginning to feel better. At
a value of -40, confidence is up by a tick in May following a one point
rising trends that is in place for several months. 
 

The index is still low in the bottom 13 percentile of its
range since 1990. Consumers are will as worried as they ever have been
abut unemployment.. Inflation is not a concern. The current financial
situation is in the lower 38Th percentile of its range an improvement
over the bottom 25th percentile for the previous 12-months. 
 

This is yet another reading on the consumer making progress in
the right direction but at a slow pace. 
 


<table border="0" cellspacing="0" width="100%"> <colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">INSEE
Household Monthly Survey </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol" colspan="5">&nbsp;</td>
<td colspan="2">Since Jan 1990</td>
<td colspan="4">Since Jan 1990</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>May 
09</td>
<td>Apr 
09</td>
<td>Mar 
09</td>
<td>Feb-09</td>
<td>Percentile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr class="grey2">
<td class="firstcol">Household Confidence</td>
<td>-40</td>
<td>-41</td>
<td>-42</td>
<td>-43</td>
<td>13.8</td>
<td>214</td>
<td>10</td>
<td>-48</td>
<td>58</td>
<td>-19</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Living
Standards</td>
</tr>
<tr class="grey2">
<td class="firstcol">Past 12 Mos</td>
<td>-76</td>
<td>-76</td>
<td>-76</td>
<td>-76</td>
<td>6.0</td>
<td>216</td>
<td>18</td>
<td>-82</td>
<td>100</td>
<td>-40</td>
</tr>
<tr class="grey2">
<td class="firstcol">Next 12-Mos</td>
<td>-51</td>
<td>-54</td>
<td>-59</td>
<td>-58</td>
<td>10.7</td>
<td>215</td>
<td>16</td>
<td>-59</td>
<td>75</td>
<td>-21</td>
</tr>
<tr class="grey2">
<td class="firstcol">Unemployment: Next 12</td>
<td>88</td>
<td>83</td>
<td>79</td>
<td>81</td>
<td>100.0</td>
<td>1</td>
<td>88</td>
<td>-37</td>
<td>125</td>
<td>32</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Price
Developments</td>
</tr>
<tr class="grey2">
<td class="firstcol">Past 12Mo</td>
<td>-17</td>
<td>-12</td>
<td>-7</td>
<td>-2</td>
<td>33.1</td>
<td>101</td>
<td>64</td>
<td>-57</td>
<td>121</td>
<td>-16</td>
</tr>
<tr class="grey2">
<td class="firstcol">Next 12-Mos</td>
<td>-55</td>
<td>-53</td>
<td>-51</td>
<td>-46</td>
<td>5.4</td>
<td>224</td>
<td>33</td>
<td>-60</td>
<td>93</td>
<td>-35</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Savings</td>
</tr>
<tr class="grey2">
<td class="firstcol">Favorable to save</td>
<td>7</td>
<td>9</td>
<td>14</td>
<td>13</td>
<td>28.9</td>
<td>220</td>
<td>39</td>
<td>-6</td>
<td>45</td>
<td>22</td>
</tr>
<tr class="grey2">
<td class="firstcol">Ability to save Next 12</td>
<td>-20</td>
<td>-15</td>
<td>-12</td>
<td>-18</td>
<td>10.3</td>
<td>221</td>
<td>6</td>
<td>-23</td>
<td>29</td>
<td>-9</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Spending</td>
</tr>
<tr class="grey2">
<td class="firstcol">Favorable for major
purchase</td>
<td>-28</td>
<td>-30</td>
<td>-29</td>
<td>-33</td>
<td>24.1</td>
<td>194</td>
<td>16</td>
<td>-42</td>
<td>58</td>
<td>-14</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Financial
Situation</td>
</tr>
<tr class="grey2">
<td class="firstcol">Current</td>
<td>11</td>
<td>12</td>
<td>12</td>
<td>11</td>
<td>38.1</td>
<td>116</td>
<td>24</td>
<td>3</td>
<td>21</td>
<td>12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Past 12 MOs</td>
<td>-28</td>
<td>-27</td>
<td>-28</td>
<td>-29</td>
<td>25.8</td>
<td>214</td>
<td>-5</td>
<td>-36</td>
<td>31</td>
<td>-17</td>
</tr>
<tr class="grey2">
<td class="firstcol">Next 12-Mos</td>
<td>-17</td>
<td>-18</td>
<td>-20</td>
<td>-20</td>
<td>20.0</td>
<td>213</td>
<td>11</td>
<td>-24</td>
<td>35</td>
<td>-2</td>
</tr>
<tr class="grey1">
<td colspan="11" class="firstcol">Number
of observations in
the period : 226</td>
</tr>
</tbody>
</table>
</body></html>

<!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/090528e.jpg" align="left" border="0" height="265" width="353">
The French consumer is gradually beginning to feel better. At
a value of -40, confidence is up by a tick in May following a one point
rising trends that is in place for several months. 
 

The index is still low in the bottom 13 percentile of its
range since 1990. Consumers are will as worried as they ever have been
abut unemployment.. Inflation is not a concern. The current financial
situation is in the lower 38Th percentile of its range an improvement
over the bottom 25th percentile for the previous 12-months. 
 

This is yet another reading on the consumer making progress in
the right direction but at a slow pace. 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col">INSEE
Household Monthly Survey </th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol" colspan="5">&nbsp;</td>
<td colspan="2">Since Jan 1990</td>
<td colspan="4">Since Jan 1990</td>
</tr>
<tr class="grey3">
<td class="firstcol">&nbsp;</td>
<td>May 09</td>
<td>Apr 09</td>
<td>Mar 09</td>
<td>Feb-09</td>
<td>Percentile</td>
<td>Rank</td>
<td>Max</td>
<td>Min</td>
<td>Range</td>
<td>Mean</td>
</tr>
<tr class="grey2">
<td class="firstcol">Household Confidence</td>
<td>-40</td>
<td>-41</td>
<td>-42</td>
<td>-43</td>
<td>13.8</td>
<td>214</td>
<td>10</td>
<td>-48</td>
<td>58</td>
<td>-19</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Living Standards</td>
</tr>
<tr class="grey2">
<td class="firstcol">Past 12 Mos</td>
<td>-76</td>
<td>-76</td>
<td>-76</td>
<td>-76</td>
<td>6.0</td>
<td>216</td>
<td>18</td>
<td>-82</td>
<td>100</td>
<td>-40</td>
</tr>
<tr class="grey2">
<td class="firstcol">Next 12-Mos</td>
<td>-51</td>
<td>-54</td>
<td>-59</td>
<td>-58</td>
<td>10.7</td>
<td>215</td>
<td>16</td>
<td>-59</td>
<td>75</td>
<td>-21</td>
</tr>
<tr class="grey2">
<td class="firstcol">Unemployment: Next 12</td>
<td>88</td>
<td>83</td>
<td>79</td>
<td>81</td>
<td>100.0</td>
<td>1</td>
<td>88</td>
<td>-37</td>
<td>125</td>
<td>32</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Price Developments</td>
</tr>
<tr class="grey2">
<td class="firstcol">Past 12Mo</td>
<td>-17</td>
<td>-12</td>
<td>-7</td>
<td>-2</td>
<td>33.1</td>
<td>101</td>
<td>64</td>
<td>-57</td>
<td>121</td>
<td>-16</td>
</tr>
<tr class="grey2">
<td class="firstcol">Next 12-Mos</td>
<td>-55</td>
<td>-53</td>
<td>-51</td>
<td>-46</td>
<td>5.4</td>
<td>224</td>
<td>33</td>
<td>-60</td>
<td>93</td>
<td>-35</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Savings</td>
</tr>
<tr class="grey2">
<td class="firstcol">Favorable to save</td>
<td>7</td>
<td>9</td>
<td>14</td>
<td>13</td>
<td>28.9</td>
<td>220</td>
<td>39</td>
<td>-6</td>
<td>45</td>
<td>22</td>
</tr>
<tr class="grey2">
<td class="firstcol">Ability to save Next 12</td>
<td>-20</td>
<td>-15</td>
<td>-12</td>
<td>-18</td>
<td>10.3</td>
<td>221</td>
<td>6</td>
<td>-23</td>
<td>29</td>
<td>-9</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Spending</td>
</tr>
<tr class="grey2">
<td class="firstcol">Favorable for major
purchase</td>
<td>-28</td>
<td>-30</td>
<td>-29</td>
<td>-33</td>
<td>24.1</td>
<td>194</td>
<td>16</td>
<td>-42</td>
<td>58</td>
<td>-14</td>
</tr>
<tr class="grey2">
<td class="firstcol" colspan="11">Financial Situation</td>
</tr>
<tr class="grey2">
<td class="firstcol">Current</td>
<td>11</td>
<td>12</td>
<td>12</td>
<td>11</td>
<td>38.1</td>
<td>116</td>
<td>24</td>
<td>3</td>
<td>21</td>
<td>12</td>
</tr>
<tr class="grey2">
<td class="firstcol">Past 12 MOs</td>
<td>-28</td>
<td>-27</td>
<td>-28</td>
<td>-29</td>
<td>25.8</td>
<td>214</td>
<td>-5</td>
<td>-36</td>
<td>31</td>
<td>-17</td>
</tr>
<tr class="grey2">
<td class="firstcol">Next 12-Mos</td>
<td>-17</td>
<td>-18</td>
<td>-20</td>
<td>-20</td>
<td>20.0</td>
<td>213</td>
<td>11</td>
<td>-24</td>
<td>35</td>
<td>-2</td>
</tr>
<tr class="grey1">
<td colspan="11" class="firstcol">Number of observations in
the period : 226</td>
</tr>
</tbody>
</table>
</body></html>

The French consumer is gradually beginning to feel better. At a value of -40, confidence is up by a tick in May following a one point rising trends that is in place for several months. The index is still low in the bottom 13 [...]

French Consumer Begins To Feel Less Stressed

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090527e.jpg" width="353">
Perhaps consumer spending is holding together after an earlier indication of retrenchment. According to the International Council of Shopping Centers-Goldman Sachs Index, store sales last week recovered most of the prior week&#39;s decline with a 0.8% increase. The news for the whole month is far from strong, however, as chain store sales in May are down just slightly from April after that month&#39;s 1.4% rise from the March average.
During the last ten years there has been a 64% correlation between the year-to-year growth in chain store sales and the growth in general merchandise sales. These weekly figures are available in Haver&#39;s SURVEYW database.
The ICSC-Goldman Sachs retail chain-store sales index is constructed using the same-store sales (stores open for one year) reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.
Prospects for spending similarly are far from ebullient as indicated by the leading indicator of sales. It increased a modest 0.3% in the latest week, a gain which also lifted the May average to just below April.
The Persistent Effects of a False News Shock from the Federal Reserve Bank of New York can be found <a href="http://www.newyorkfed.org/research/staff_reports/sr374.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/surveyw/@S2/@S2.HTM">ICSC-UBS (SA, 1977=100)</a></th>
<th scope="col">05/16/09</th>
<th scope="col">05/09/09</th>
<th scope="col">Y/Y</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>490.5</td>
<td>486.8</td>
<td>0.5%</td>
<td>1.4%</td>
<td>2.8%</td>
<td>3.3%</td>
</tr>
</tbody>
</table>


</html>

Perhaps consumer spending is holding together after an earlier indication of retrenchment. According to the International Council of Shopping Centers-Goldman Sachs Index, store sales last week recovered most of the prior week's [...]

U.S. Chain Store Sales Recover

<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>

 



<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090527c.jpg" width="353">
Both home sales and home prices rose slightly last month, according to the National Association of Realtors. The overriding message, however, was that lower prices can spur sales. Sales of existing homes rose 2.9% last month to 4.68M (AR), recovering most of the 3.4% March decline. Consensus expectations had been for April sales of 4.66M homes. Total sales include sales of condos and co-ops. In each of the country&#39;s regions sales during February roughly recovered their January declines.
The price part of the story was provided by the indication that although home prices rose all of 0.2% during April, they were down 15.4% y/y. Moreover, home prices were down by one-quarter from the 2007 peak. These declines in home prices and lower interest rates have gone a long way to increase the affordability of an existing home which is up roughly one-quarter from one year ago and by more than one-half from 2007. The measure fell slightly in the latest two months and the series dates back to 1971.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/090527d.jpg" width="353">
Sales of existing single-family homes alone also reversed most of the March decline with a 2.5% m/m increase to 4.180M units. However, sales remained near the lowest level since July 1997 as they have been essentially flat for the last six months. (These data have a longer history than the total series).
The number of unsold homes (condos &amp; single-family) on the market increased a sharp 8.8% last month but year-to-year inventories are down 12.8%. At the current sales rate there was a 10.2 months&#39; supply on the market which was near the lowest since 2007. For single-family homes the inventory rose a sharp 9.2% during April but it remained low versus last year&#39;s high. At the current sales rate there was a 9.6 month&#39;s supply, near the lowest since 2007.
The data on existing home sales, prices and affordability can be found in Haver&#39;s USECON database. The regional price, affordability and inventory data is available in the REALTOR database.
The Impact of Inflation and Unemployment on Subjective Personal and Country Evaluations from the Federal Reserve Bank of St. Louis can be found <a href="http://research.stlouisfed.org/publications/review/09/05/Gandelman.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">Existing Home Sales (Thous)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">April y/y %</th>
<th scope="col">April &#39;08</th>
<th scope="col">2008</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>4,570</td>
<td>4,710</td>
<td>-7.1</td>
<td>4,920</td>
<td>4,893</td>
<td>5,674</td>
<td>6,516</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Northeast</td>
<td>770</td>
<td>690</td>
<td>-10.5</td>
<td>860</td>
<td>845</td>
<td>1,010</td>
<td>1,093</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Midwest</td>
<td>1,000</td>
<td>1,020</td>
<td>-9.9</td>
<td>1,110</td>
<td>1,130</td>
<td>1,331</td>
<td>1,494</td>
</tr>
<tr>
<td class="firstcol">&nbsp; South</td>
<td>1,740</td>
<td>1,710</td>
<td>-8.9</td>
<td>1,910</td>
<td>1,860</td>
<td>2,243</td>
<td>2,577</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; West</td>
<td>1,170</td>
<td>1,130</td>
<td>19.4</td>
<td>980</td>
<td>1,064</td>
<td>1,095</td>
<td>1,357</td>
</tr>
<tr>
<td class="firstcol">Single-Family</td>
<td>4,180</td>
<td>4,080</td>
<td>-2.8</td>
<td>4,300</td>
<td>4,341</td>
<td>4,960</td>
<td>5,712</td>
</tr>
<tr class="odd">
<td class="firstcol">Median Price, Total, $</td>
<td>170,200</td>
<td>169,900</td>
<td>-15.4</td>
<td>201,300</td>
<td>197,250</td>
<td>216,633</td>
<td>222,042</td>
</tr>
</tbody>
</table>


</html>

Both home sales and home prices rose slightly last month, according to the National Association of Realtors. The overriding message, however, was that lower prices can spur sales. Sales of existing homes rose 2.9% last month to 4.68M [...]

U.S. Existing Home Sales Rise As Home Affordability Increases

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

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:

German Retail Sales Lose Some Weakness

U.S. Durable Goods Orders Recover Earlier Decline And Are Up Slightly 'YTD

U.S. Initial Jobless Insurance Claims Slip Again Though Continuing Claims Reach Another Record

U.S. New Home Sales Form A Bottom While The Level of Unsold Homes Is At Its Lowest Since 2001

U.S. Durable Goods Orders Recover Earlier Decline And Are Up Slightly 'YTD

French Consumer Begins To Feel Less Stressed

U.S. Chain Store Sales Recover

U.S. Existing Home Sales Rise As Home Affordability Increases