Tom Moeller

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108b.jpg" width="353">
The index of small business optimism from the National Federation of Independent Business (NFIB) jumped 3.7% in October, despite the devastation wreaked by three Hurricanes.
The economic outlook brightened as 14% of firms expected the economy to improve, the best reading since June, although the percentage remained well below the 34-37% range from 2002 to 2004. Plans for adding to employment held steady at 17%, the same as during the last three months. On the negative side, the percentage of firms planning to raise capital expenditures fell back to the lowest level of the year.
During the last ten years there has been a 70% correlation between the level of the NFIB index and the two quarter change in real GDP.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108c.jpg" width="353">
The percentage of firms planning to raise average selling prices fell to 23% from 27% during the prior two months and from 26% during all of last year. The percentage of firm actually raising prices also dipped to 22% from 25% in September but those readings remained up versus 19% averaged in 2004. During the last ten years there has been a 60% correlation between the change in the producer price index and the level of the NFIB price index.
The percentage of firms with one or more job openings fell two points to 21%, last year&#39;s average. During the last ten years there has been a 67% correlation between hiring plans and the three month growth in nonfarm payrolls.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.
The latest press release from the NFIB is available <a href="http://www.nfib.com/object/IO_24996.html">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S7/@S7.HTM">Nat&#39;l Federation of Independent Business</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Small Business Optimism Index (1986=100)</td>
<td>103.7</td>
<td>100.0</td>
<td>-0.2%</td>
<td>104.6</td>
<td>101.3</td>
<td>101.2</td>
</tr>
</tbody>
</table>
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The index of small business optimism from the National Federation of Independent Business (NFIB) jumped 3.7% in October, despite the devastation wreaked by three Hurricanes. The economic outlook brightened as 14% of firms expected the [...]

Small Business Optimism Up, Pricing Intentions Cool

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108b.jpg" width="353">
The index of small business optimism from the National Federation of Independent Business (NFIB) jumped 3.7% in October, despite the devastation wreaked by three Hurricanes.
The economic outlook brightened as 14% of firms expected the economy to improve, the best reading since June, although the percentage remained well below the 34-37% range from 2002 to 2004. Plans for adding to employment held steady at 17%, the same as during the last three months. On the negative side, the percentage of firms planning to raise capital expenditures fell back to the lowest level of the year.
During the last ten years there has been a 70% correlation between the level of the NFIB index and the two quarter change in real GDP.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108c.jpg" width="353">
The percentage of firms planning to raise average selling prices fell to 23% from 27% during the prior two months and from 26% during all of last year. The percentage of firm actually raising prices also dipped to 22% from 25% in September but those readings remained up versus 19% averaged in 2004. During the last ten years there has been a 60% correlation between the change in the producer price index and the level of the NFIB price index.
The percentage of firms with one or more job openings fell two points to 21%, last year&#39;s average. During the last ten years there has been a 67% correlation between hiring plans and the three month growth in nonfarm payrolls.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.
The latest press release from the NFIB is available <a href="http://www.nfib.com/object/IO_24996.html">here</a>.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/SURVEYS/@S7/@S7.HTM">Nat&#39;l Federation of Independent Business</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
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<td class="firstcol">Small Business Optimism Index (1986=100)</td>
<td>103.7</td>
<td>100.0</td>
<td>-0.2%</td>
<td>104.6</td>
<td>101.3</td>
<td>101.2</td>
</tr>
</tbody>
</table>
Chain Store Sales Jumped As Gas Prices Fell Another Dime 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 8, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108a.jpg" width="353">
Last week, chain store sales posted the largest gain since April according to the International Council of Shopping Centers (ICSC)-UBS survey. The 1.0% jump pulled the starting point for November sales 1.3% above the October average which rose just 0.1% from the prior month
The sales jump was aided by another ten cent drop in the average US retail price of regular gasoline to $2.38 per gallon (+18.7 y/y). Retail gas prices are down 22.5% since the early September peak of $3.07 but during the last several days the spot market price for gasoline has bottomed out, suggesting that further retail price declines will be limited. 
During the last ten years there has been a 56% correlation between the y/y change in chain store sales and the change in non-auto retail sales less gasoline, as published by the US Census Department. Chain store sales correspond directly with roughly 14% of non-auto retail sales less gasoline.
The leading indicator of chain store sales from ICSC fell 0.6% (-3.4% y/y) during the latest week following an upwardly revised 0.2% gain the prior week.
The ICSC-UBS 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.

<table border="0" cellspacing="0" width="100%">
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<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">11/05/05</th>
<th scope="col">10/29/05</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Total Weekly Chain Store Sales</td>
<td>456.1</td>
<td>451.6</td>
<td>4.1%</td>
<td>4.6%</td>
<td>2.9%</td>
</tr>
</tbody>
</table>
JOLTS: U.S. Job Openings & Hires Up 
by <a href="/comment/Moeller.html">Tom Moeller</a> November 8, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108d.jpg" width="353">
The Bureau of Labor Statistics reported that the job openings rate, from the Job Openings &amp; Labor Turnover Survey (JOLTS), rose in September to 2.7% from 2.5% in August. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings. A 190,000 increase (12.6% y/y) in the total number of job openings more than reversed the declines of the prior two months.
The hires rate remained steady at 3.4% for the second consecutive month and equaled the 2004 average. The hires rate is the number of hires during the month divided by employment.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108e.jpg" width="353">
The job separations rate also remained steady at 3.4% but this year&#39;s levels have been elevated versus the 3.2% 2004 average. Total separations include quits, layoffs, discharges, and other separations as well as retirements. The total separations, or turnover, rate is the total number of separations during the month divided by employment.
The survey dates only to December 2000 but has since followed the movement in nonfarm payrolls.
A description of the Jolts survey and the latest release from the U.S. Department of Labor is available <a href="http://www.bls.gov/news.release/jolts.nr0.htm">here</a>.
The Economic Role of Cities in the 21st Century from the Federal Reserve Bank of Philadelphia is available <a href="http://www.philadelphiafed.org/files/br/Q3_05_Carlino.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">Sept</th>
<th scope="col">Aug</th>
<th scope="col">Sept &#39;04</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Job Openings Rate: Total</td>
<td>2.7%</td>
<td>2.5%</td>
<td>2.4%</td>
<td>2.4%</td>
<td>2.1%</td>
<td>2.2%</td>
</tr>
<tr>
<td class="firstcol">Hires Rate: Total</td>
<td>3.4%</td>
<td>3.4%</td>
<td>3.3%</td>
<td>3.4%</td>
<td>3.2%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
Teikoku Data Bank's Current Economic Trends: Another Indicator for Japanese Economic Growth  
by <a href="/comment/Curley.html">Louise Curley</a> November 8, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108f.jpg" width="353">
About a week ago, the Japanese Cabinet Office&#39;s synthetic indexes of some of the components of Gross Domestic Product intimated that third quarter GDP growth might slow from the second quarter and could even be negative. Another indicator of economic growth was released today by the Teikoku Data Bank, Ltd*. Their monthly survey, conducted over the internet, of more than 20,000 domestic Japanese firms shows how business men appraise current conditions and the prospects of conditions three, six and twelve months ahead.
TDB&#39;s economic trends research is a fairly recent endeavor. Data for current conditions are available from May 2002 and those for conditions three, six and twelve months ahead are available only form April, 2004. The first chart shows the available data for the appraisals of current conditions for the whole economy and for conditions expected in three months. Like most survey respondents, respondents to the TDB survey tend to believe things will be better in the future as a result the three month ahead index has generally been higher than that of current conditions. Atypically, however, the October diffusion index of current conditions improved while that for conditions three months ahead declined.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051108g.jpg" width="353">
Throughout their limited histories the diffusion indexes in the TDB&#39;s economic trends series have rarely been above the 50% mark that would indicates a neutral or positive appraisal of conditions. They have, however, improved from the extreme pessimism of the early years. In addition to an appraisal of economic trends for the economy as a whole, there are appraisals by large and small firms and appraisals for conditions in a number of industries. Small and medium sized firms are becoming less negative on the general outlook. In October the index for current conditions for the economy by small firms rose .67 percentage points or more than the .11 percentage points for the large firms. Two of the industries--manufacturing and retail-for which there are diffusion indexes of current conditions are shown in the second chart. While continued improvement is seen in manufacturing, there is less enthusiasm for the retail sector. In October, the manufacturing index increased by .46 percentage points while that for the retail sector declined by .13 percentage points.
On balance it would seem that the data contained in the TDB&#39;s October economic trend series point to a lackluster performance.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/JAPAN/@J8/@J812/@J812.HTM">Teikoku Data Bank, Ltd. Economic Trends Diffusion Indexes</a></th>
<th scope="col">Oct 05&nbsp;</th>
<th scope="col">Sep 05</th>
<th scope="col">Oct 04</th>
<th scope="col">M/M Dif</th>
<th scope="col">Y/Y Dif</th>
<th scope="col">2004 &nbsp; &nbsp;</th>
<th scope="col">2003 &nbsp;</th>
<th scope="col">May 2002&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total Economy</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Current conditions</td>
<td>46.01</td>
<td>45.45</td>
<td>43.86</td>
<td>0.56</td>
<td>2.15</td>
<td>43.58</td>
<td>32.49</td>
<td>26.91</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Conditions 3-months ahead</td>
<td>49.71</td>
<td>50.11</td>
<td>47.99</td>
<td>-0.40</td>
<td>1.72</td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">Current Conditions</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Large Firms</td>
<td>48.35</td>
<td>48.24</td>
<td>46.13</td>
<td>0.11</td>
<td>2.22</td>
<td>46.21</td>
<td>34.16</td>
<td>28.45</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Small to Medium Firms</td>
<td>45.22</td>
<td>44.55&nbsp;</td>
<td>43.11</td>
<td>0.67&nbsp;</td>
<td>2.11&nbsp;</td>
<td>42.72&nbsp;</td>
<td>31.93</td>
<td>&nbsp;26.38</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>47.76&nbsp;</td>
<td>43.30&nbsp;</td>
<td>45.96&nbsp;</td>
<td>0.46&nbsp;</td>
<td>1.80&nbsp;</td>
<td>46.05&nbsp;</td>
<td>34.18&nbsp;</td>
<td>26.90&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Retail&nbsp;</td>
<td>41.70&nbsp;</td>
<td>41.83&nbsp;</td>
<td>40.36&nbsp;</td>
<td>-0.13&nbsp;</td>
<td>1.34&nbsp;</td>
<td>40.21&nbsp;</td>
<td>31.59&nbsp;</td>
<td>29.00&nbsp;</td>
</tr>
</tbody>
</table>


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Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107b.jpg" width="353">
September industrial production data for Germany, Denmark, Norway and the United Kingdom were released today. All, except Norway showed a rise in total production from August and all except the UK were higher than September, 2004. Manufacturing production increased in Germany and Norway, but declined in the UK. (Data on total manufacturing are not available for Denmark.)<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107c.jpg" width="353">
The August decline in manufacturing in the UK was more than offset by a sharp increase of 6.69% in the mining and refining sector, where activity in the oil industry is recorded. Although England&#39;s oil industry has been declining it is still a significant factor in overall production. The oil industry is even more important in Norway and the swings in oil production there have had a more pronounced effect on total production. The first chart compares total production in the UK and in Norway. (In order to facilitate the comparison between Norwegian and the UK production indexes, we have rebased the original Norwegian data based on 1995=100 to 2002=100, the basis for the UK index. This can be done easily in DXLVG3, using the advanced functions.)
Industrial production in Denmark for the past five years has shown little evidence of a trend, but it has been extremely volatile even on a seasonally adjusted basis. Germany, by contrast has shown a moderately rising trend and less volatility as can be seen in the second chart.

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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@GZ/@GZ3/@GZ301/@GZ301.HTM">Industrial Production</a></th>
<th scope="col">Sep 05&nbsp;</th>
<th scope="col">Aug 05</th>
<th scope="col">Sep 04</th>
<th scope="col">M/M&nbsp; %</th>
<th scope="col">Y/Y %</th>
<th scope="col">2004 &nbsp; </th>
<th scope="col">2003 &nbsp;</th>
<th scope="col">2002&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany (2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total</td>
<td>104.3</td>
<td>103.1</td>
<td>101.0</td>
<td>1.16</td>
<td>3.27</td>
<td>100.8</td>
<td>98..4</td>
<td>98.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>107.3</td>
<td>105.9</td>
<td>103.2</td>
<td>1.32</td>
<td>3.97</td>
<td>102.7</td>
<td>99.5</td>
<td>99.3</td>
</tr>
<tr>
<td class="firstcol">Denmark 2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>105</td>
<td>101</td>
<td>103</td>
<td>3.96</td>
<td>1.94</td>
<td>102</td>
<td>102</td>
<td>103</td>
</tr>
<tr>
<td class="firstcol">United Kingdom (2002=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>98.6</td>
<td>98.2&nbsp;</td>
<td>99.7&nbsp;</td>
<td>0.41&nbsp;</td>
<td>-1.10&nbsp;</td>
<td>100.3&nbsp;</td>
<td>99.5&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>78.3</td>
<td>76.2</td>
<td>81.3</td>
<td>6.69</td>
<td>-3.94</td>
<td>87.2</td>
<td>94.9</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;101.4</td>
<td>101.7&nbsp;</td>
<td>102.1&nbsp;</td>
<td>-0.29&nbsp;</td>
<td>-0.69&nbsp;</td>
<td>102.0&nbsp;</td>
<td>100.1&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Norway (2002=100)</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>&nbsp;100.0</td>
<td>100.1&nbsp;</td>
<td>96.3&nbsp;</td>
<td>-0.09</td>
<td>3.86&nbsp;</td>
<td>97.8</td>
<td>96.0&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>94.3</td>
<td>94.9</td>
<td>98.7</td>
<td>-0.62</td>
<td>-4.40</td>
<td>100.8</td>
<td>105.7</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;99.8</td>
<td>97.6&nbsp;</td>
<td>97.9&nbsp;</td>
<td>2.23&nbsp;</td>
<td>1.92&nbsp;</td>
<td>97.1&nbsp;</td>
<td>95.8&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
</tbody>
</table>
</body>
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September industrial production data for Germany, Denmark, Norway and the United Kingdom were released today. All, except Norway showed a rise in total production from August and all except the UK were higher than September, 2004. [...]

September Industrial Production in Denmark, Germany, Norway and the UK

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107a.jpg" width="353">
Last week, Challenger, Grey &amp; Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at 74,569 (-21.2% y/y), the lowest level since August of last year.
During the last ten years there has been an 84% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Increases in job cut announcements m/m were reported in apparel (65.5% y/y), automotive (11.5% y/y), insurance (272.2% y/y) and telecommunications (-28.5% y/y) pharmaceutical (37.0% y/y) industries although declines were noted in consumer goods (-45.0% y/y), electronics (-48.3% y/y), financial (-78.2% y/y) and retail (+118.0% y/y).
Challenger also reported that announced hiring plans also rose to a level up sharply from last October.
The Yield Curve as a Leading Indicator: Frequently Asked Questions answered by the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/capital_markets/ycfaq.pdf"> here</a>.
Last week&#39;s comments from Federal Reserve Board Vice Chairman Roger W. Ferguson, Jr. at the Cato Institute titled Monetary Credibility, Inflation, and Economic Growth can be found <a href="http://www.federalreserve.gov/BoardDocs/Speeches/2005/20051103/default.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"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>81,301</td>
<td>71,836</td>
<td>-20.2%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
</body>
</html>

Last week, Challenger, Grey & Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at [...]

Challenger Layoffs Up Again in October, Trend Lower

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107a.jpg" width="353">
Last week, Challenger, Grey &amp; Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at 74,569 (-21.2% y/y), the lowest level since August of last year.
During the last ten years there has been an 84% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Increases in job cut announcements m/m were reported in apparel (65.5% y/y), automotive (11.5% y/y), insurance (272.2% y/y) and telecommunications (-28.5% y/y) pharmaceutical (37.0% y/y) industries although declines were noted in consumer goods (-45.0% y/y), electronics (-48.3% y/y), financial (-78.2% y/y) and retail (+118.0% y/y).
Challenger also reported that announced hiring plans also rose to a level up sharply from last October.
The Yield Curve as a Leading Indicator: Frequently Asked Questions answered by the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/capital_markets/ycfaq.pdf"> here</a>.
Last week&#39;s comments from Federal Reserve Board Vice Chairman Roger W. Ferguson, Jr. at the Cato Institute titled Monetary Credibility, Inflation, and Economic Growth can be found <a href="http://www.federalreserve.gov/BoardDocs/Speeches/2005/20051103/default.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"><a href="http://www.haverselect.com/dlx/SURVEYS/@S3/@S301/@S301.HTM">Challenger, Gray &amp; Christmas</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Announced Job Cuts</td>
<td>81,301</td>
<td>71,836</td>
<td>-20.2%</td>
<td>1,039,175</td>
<td>1,236,426</td>
<td>1,431,052</td>
</tr>
</tbody>
</table>
 September Industrial Production in Denmark, Germany, Norway and the UK  
by <a href="/comment/Curley.html">Louise Curley</a> November 7, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107b.jpg" width="353">
September industrial production data for Germany, Denmark, Norway and the United Kingdom were released today. All, except Norway showed a rise in total production from August and all except the UK were higher than September, 2004. Manufacturing production increased in Germany and Norway, but declined in the UK. (Data on total manufacturing are not available for Denmark.)<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051107c.jpg" width="353">
The August decline in manufacturing in the UK was more than offset by a sharp increase of 6.69% in the mining and refining sector, where activity in the oil industry is recorded. Although England&#39;s oil industry has been declining it is still a significant factor in overall production. The oil industry is even more important in Norway and the swings in oil production there have had a more pronounced effect on total production. The first chart compares total production in the UK and in Norway. (In order to facilitate the comparison between Norwegian and the UK production indexes, we have rebased the original Norwegian data based on 1995=100 to 2002=100, the basis for the UK index. This can be done easily in DXLVG3, using the advanced functions.)
Industrial production in Denmark for the past five years has shown little evidence of a trend, but it has been extremely volatile even on a seasonally adjusted basis. Germany, by contrast has shown a moderately rising trend and less volatility as can be seen in the second chart.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@GZ/@GZ3/@GZ301/@GZ301.HTM">Industrial Production</a></th>
<th scope="col">Sep 05&nbsp;</th>
<th scope="col">Aug 05</th>
<th scope="col">Sep 04</th>
<th scope="col">M/M&nbsp; %</th>
<th scope="col">Y/Y %</th>
<th scope="col">2004 &nbsp; </th>
<th scope="col">2003 &nbsp;</th>
<th scope="col">2002&nbsp;&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany (2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total</td>
<td>104.3</td>
<td>103.1</td>
<td>101.0</td>
<td>1.16</td>
<td>3.27</td>
<td>100.8</td>
<td>98..4</td>
<td>98.3</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>107.3</td>
<td>105.9</td>
<td>103.2</td>
<td>1.32</td>
<td>3.97</td>
<td>102.7</td>
<td>99.5</td>
<td>99.3</td>
</tr>
<tr>
<td class="firstcol">Denmark 2000=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>105</td>
<td>101</td>
<td>103</td>
<td>3.96</td>
<td>1.94</td>
<td>102</td>
<td>102</td>
<td>103</td>
</tr>
<tr>
<td class="firstcol">United Kingdom (2002=100)</td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>98.6</td>
<td>98.2&nbsp;</td>
<td>99.7&nbsp;</td>
<td>0.41&nbsp;</td>
<td>-1.10&nbsp;</td>
<td>100.3&nbsp;</td>
<td>99.5&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>78.3</td>
<td>76.2</td>
<td>81.3</td>
<td>6.69</td>
<td>-3.94</td>
<td>87.2</td>
<td>94.9</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;101.4</td>
<td>101.7&nbsp;</td>
<td>102.1&nbsp;</td>
<td>-0.29&nbsp;</td>
<td>-0.69&nbsp;</td>
<td>102.0&nbsp;</td>
<td>100.1&nbsp;</td>
<td>&nbsp;100.0</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Norway (2002=100)</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Total</td>
<td>&nbsp;100.0</td>
<td>100.1&nbsp;</td>
<td>96.3&nbsp;</td>
<td>-0.09</td>
<td>3.86&nbsp;</td>
<td>97.8</td>
<td>96.0&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining and Quarrying</td>
<td>94.3</td>
<td>94.9</td>
<td>98.7</td>
<td>-0.62</td>
<td>-4.40</td>
<td>100.8</td>
<td>105.7</td>
<td>100.0</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>&nbsp;99.8</td>
<td>97.6&nbsp;</td>
<td>97.9&nbsp;</td>
<td>2.23&nbsp;</td>
<td>1.92&nbsp;</td>
<td>97.1&nbsp;</td>
<td>95.8&nbsp;</td>
<td>100.0&nbsp;</td>
</tr>
</tbody>
</table>
</body>
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Carol Stone, CBE

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104c.jpg" width="353">
After last month&#39;s somewhat counter-intuitive labor market report in Canada, October data righted the relationships of jobs -- up -- and unemployment -- down, showing an improved picture overall.
The number of workers employed jumped 68,700 after easing 2,300 in September. There were notable gains in several industry sectors: trade, finance, professional and technical services, education, and health and social services. Those in trade and finance were outsized and served to offset declines in previous months. Others are less defined, but indicative of generally rising trends. In the goods producing sector, total jobs were down 3,200; manufacturing, down 7,700, extended an irregular downtrend that began in early 2003, and construction fell 4,900.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104d.jpg" width="353">
The unemployment rate declined further in October, to 6.6% from 6.7% in September and two months at 6.8%. As we indicated last month, these are generation-low unemployment rates. The last time unemployment in Canada for all workers 15 years old and over was 6.6% or below was in April 1975, more than 30 years ago. Many Canadian labor market gauges highlight a middle age range of 15-64 years old, that is, omitting older workers. This unemployment rate remained at 6.8% in October, basically where it has been for the last seven months. Last month, we emphasized that lower unemployment didn&#39;t necessarily imply tight labor markets because participation was declining. There was a slight improvement in this situation in October, with the overall rate rising to 67.2% from September&#39;s 67.1%; the rate for 15-64 year olds, shown in the table below, also ticked up, from 77.7% to 77.8%.
We also cited last time the weakness in employment of young workers, but in October jobs for 15-24 year olds increased 32,000, contributing to a rise in their participation rate from 65.6% to 66.0%. Their unemployment rate dropped from 12.7% to 12.1%. Clearly month-to-month movements in these figures, particularly around the beginning of a school year, may not tell much fundamental about employment conditions generally, but for these young people, we can point to progress in reducing their unemployment from 14.0% early in 2004 and some hint of stabilization in their participation rates at about 66% throughout 2005. The number of jobs they hold is just about even with a year ago.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
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<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@G4/@G46/@G46.HTM">Canada</a>Age 15 and over</th>
Mo/Mo Change, 000s
<th scope="col">Yr/Yr % Oct</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Oct 2005</td>
<td>Sept 2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Employment</td>
<td>68.7</td>
<td>-2.3</td>
<td>1.2%</td>
<td>1.5%</td>
<td>1.9%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Goods- Producing</td>
<td>-3.2</td>
<td>-14.5</td>
<td>0.4%</td>
<td>2.0%</td>
<td>-0.5%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">Service- Producing</td>
<td>71.9</td>
<td>12.2</td>
<td>1.5%</td>
<td>1.2%</td>
<td>2.6%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Labor Force</td>
<td>52.7</td>
<td>-7.4</td>
<td>0.7%</td>
<td>1.1%</td>
<td>1.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Ages 15-64</td>
<td>Oct 2005</td>
<td>Sept 2005</td>
<td>Oct 2004</td>
<td colspan="3">Annual Average</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>6.8%</td>
<td>6.8%</td>
<td>7.1%</td>
<td>7.2%</td>
<td>7.7%</td>
<td>7.7%</td>
</tr>
<tr>
<td class="firstcol">Participation Rate</td>
<td>77.8%</td>
<td>77.7%</td>
<td>78.1%</td>
<td>78.2%</td>
<td>78.1%</td>
<td>77.4%</td>
</tr>
</tbody>
</table>
</body>
</html>

After last month's somewhat counter-intuitive labor market report in Canada, October data righted the relationships of jobs -- up -- and unemployment -- down, showing an improved picture overall. The number of workers employed jumped [...]

Canadian Employment Rebounds in October; Participation Rate & Unemployment Steady

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104a.jpg" width="353">
Non-farm payrolls rose 56,000 last month following a revised 8,000 worker decline in September, initially reported at down 35,000. In addition, the August rise in payrolls was revised lower to 148,000 from 211,000 reported earlier. Consensus expectations had been for a larger 122,000 increase in October.
The Bureau of Labor Statistics indicated that the weaker-than-expected October number was due to softness in the labor market outside of hurricane-affected regions.
Construction employment rose 33,000 (3.8% y/y), about twice the average gain during the prior four months. October&#39;s strength at least partly reflected rebuilding following Hurricane Katrina.
Factory sector payrolls increased 12,000 following a little revised 28,000 worker decline in September. Transportation equipment jobs increased 22,000, largely due to the return of 18,000 striking workers in the aerospace industry.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104b.jpg" width="353">
Payrolls in private service producing industries fell the same 3,000 (+1.7% y/y) as during September which was revised from -67,000. Retail jobs fell 5,400 (+0.7% y/y) and the September decline was lessened to 58,000, initially spotted at -88,000. The leisure &amp; hospitality industries shed another 18,000 (+1.6% y/y) after a 63,000 decline in September, revised from -80,000.
Professional &amp; business services jobs rose 12,000 (2.7% y/y) and financial sector jobs rose 22,000 (2.4% y/y).Education &amp; health services jobs increased 11,000 (2.2% y/y).
Average hourly earnings rose 0.5%, more than double expectations. Factory sector earnings rose 0.7% (2.6% y/y) and private service sector earnings jumped 0.9% (3.5% y/y).
From the household survey, the unemployment rate fell to 5.0% versus expected stability at 5.1%. Employment jumped 214,000 (2.0% y/y) and the labor force fell 14,000 (+1.5% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>56,000</td>
<td>-8,000</td>
<td>1.4%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>12,000</td>
<td>-28,000</td>
<td>-0.7%</td>
<td>-1.2%</td>
<td>-4.9%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8</td>
<td>33.7</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.5%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>2.1%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.0%</td>
<td>5.1%</td>
<td>5.5%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
</body>
</html>

Non-farm payrolls rose 56,000 last month following a revised 8,000 worker decline in September, initially reported at down 35,000. In addition, the August rise in payrolls was revised lower to 148,000 from 211,000 reported earlier. [...]

October U.S. Payrolls Soft

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104a.jpg" width="353">
Non-farm payrolls rose 56,000 last month following a revised 8,000 worker decline in September, initially reported at down 35,000. In addition, the August rise in payrolls was revised lower to 148,000 from 211,000 reported earlier. Consensus expectations had been for a larger 122,000 increase in October.
The Bureau of Labor Statistics indicated that the weaker-than-expected October number was due to softness in the labor market outside of hurricane-affected regions.
Construction employment rose 33,000 (3.8% y/y), about twice the average gain during the prior four months. October&#39;s strength at least partly reflected rebuilding following Hurricane Katrina.
Factory sector payrolls increased 12,000 following a little revised 28,000 worker decline in September. Transportation equipment jobs increased 22,000, largely due to the return of 18,000 striking workers in the aerospace industry.
Payrolls in private service producing industries fell the same 3,000 (+1.7% y/y) as during September which was revised from -67,000. Retail jobs fell 5,400 (+0.7% y/y) and the September decline was lessened to 58,000, initially spotted at -88,000. The leisure &amp; hospitality industries shed another 18,000 (+1.6% y/y) after a 63,000 decline in September, revised from -80,000.
Professional &amp; business services jobs rose 12,000 (2.7% y/y) and financial sector jobs rose 22,000 (2.4% y/y).Education &amp; health services jobs increased 11,000 (2.2% y/y).
Average hourly earnings rose 0.5%, more than double expectations. Factory sector earnings rose 0.7% (2.6% y/y) and private service sector earnings jumped 0.9% (3.5% y/y).
From the household survey, the unemployment rate fell to 5.0% versus expected stability at 5.1%. Employment jumped 214,000 (2.0% y/y) and the labor force fell 14,000 (+1.5% y/y).

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB01/@EB01.HTM">Employment</a></th>
<th scope="col">Oct</th>
<th scope="col">Sept</th>
<th scope="col">Y/Y</th>
<th scope="col">2004</th>
<th scope="col">2003</th>
<th scope="col">2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Payroll Employment</td>
<td>56,000</td>
<td>-8,000</td>
<td>1.4%</td>
<td>1.1%</td>
<td>-0.3%</td>
<td>-1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>12,000</td>
<td>-28,000</td>
<td>-0.7%</td>
<td>-1.2%</td>
<td>-4.9%</td>
<td>-7.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Weekly Hours</td>
<td>33.8</td>
<td>33.8</td>
<td>33.8</td>
<td>33.7</td>
<td>33.7</td>
<td>33.8</td>
</tr>
<tr>
<td class="firstcol">Average Hourly Earnings</td>
<td>0.5%</td>
<td>0.1%</td>
<td>2.9%</td>
<td>2.1%</td>
<td>2.7%</td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>5.0%</td>
<td>5.1%</td>
<td>5.5%</td>
<td>5.5%</td>
<td>6.0%</td>
<td>5.8%</td>
</tr>
</tbody>
</table>
Canadian Employment Rebounds in October; Participation Rate & Unemployment Steady 
by <a href="/comment/Stone.html">Carol Stone</a> November 4, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104c.jpg" width="353">
After last month&#39;s somewhat counter-intuitive labor market report in Canada, October data righted the relationships of jobs -- up -- and unemployment -- down, showing an improved picture overall.
The number of workers employed jumped 68,700 after easing 2,300 in September. There were notable gains in several industry sectors: trade, finance, professional and technical services, education, and health and social services. Those in trade and finance were outsized and served to offset declines in previous months. Others are less defined, but indicative of generally rising trends. In the goods producing sector, total jobs were down 3,200; manufacturing, down 7,700, extended an irregular downtrend that began in early 2003, and construction fell 4,900.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/051104d.jpg" width="353">
The unemployment rate declined further in October, to 6.6% from 6.7% in September and two months at 6.8%. As we indicated last month, these are generation-low unemployment rates. The last time unemployment in Canada for all workers 15 years old and over was 6.6% or below was in April 1975, more than 30 years ago. Many Canadian labor market gauges highlight a middle age range of 15-64 years old, that is, omitting older workers. This unemployment rate remained at 6.8% in October, basically where it has been for the last seven months. Last month, we emphasized that lower unemployment didn&#39;t necessarily imply tight labor markets because participation was declining. There was a slight improvement in this situation in October, with the overall rate rising to 67.2% from September&#39;s 67.1%; the rate for 15-64 year olds, shown in the table below, also ticked up, from 77.7% to 77.8%.
We also cited last time the weakness in employment of young workers, but in October jobs for 15-24 year olds increased 32,000, contributing to a rise in their participation rate from 65.6% to 66.0%. Their unemployment rate dropped from 12.7% to 12.1%. Clearly month-to-month movements in these figures, particularly around the beginning of a school year, may not tell much fundamental about employment conditions generally, but for these young people, we can point to progress in reducing their unemployment from 14.0% early in 2004 and some hint of stabilization in their participation rates at about 66% throughout 2005. The number of jobs they hold is just about even with a year ago.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/G10/@G4/@G46/@G46.HTM">Canada</a>Age 15 and over</th>
Mo/Mo Change, 000s
<th scope="col">Yr/Yr % Oct</th>
December/December
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Oct 2005</td>
<td>Sept 2005</td>
<td>2004</td>
<td>2003</td>
<td>2002</td>
</tr>
<tr>
<td class="firstcol">Employment</td>
<td>68.7</td>
<td>-2.3</td>
<td>1.2%</td>
<td>1.5%</td>
<td>1.9%</td>
<td>4.0%</td>
</tr>
<tr class="odd">
<td class="firstcol">Goods- Producing</td>
<td>-3.2</td>
<td>-14.5</td>
<td>0.4%</td>
<td>2.0%</td>
<td>-0.5%</td>
<td>6.3%</td>
</tr>
<tr>
<td class="firstcol">Service- Producing</td>
<td>71.9</td>
<td>12.2</td>
<td>1.5%</td>
<td>1.2%</td>
<td>2.6%</td>
<td>3.1%</td>
</tr>
<tr class="odd">
<td class="firstcol">Labor Force</td>
<td>52.7</td>
<td>-7.4</td>
<td>0.7%</td>
<td>1.1%</td>
<td>1.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td class="firstcol">Ages 15-64</td>
<td>Oct 2005</td>
<td>Sept 2005</td>
<td>Oct 2004</td>
<td colspan="3">Annual Average</td>
</tr>
<tr class="odd">
<td class="firstcol">Unemployment Rate</td>
<td>6.8%</td>
<td>6.8%</td>
<td>7.1%</td>
<td>7.2%</td>
<td>7.7%</td>
<td>7.7%</td>
</tr>
<tr>
<td class="firstcol">Participation Rate</td>
<td>77.8%</td>
<td>77.7%</td>
<td>78.1%</td>
<td>78.2%</td>
<td>78.1%</td>
<td>77.4%</td>
</tr>
</tbody>
</table>
</body>
</html>

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

US production rebounded in Q2, but demand continued to slow

US leader, Germany trailer for real GDP growth over past 3 years

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

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The Consumer Price Index increased 2.7% y/y during November, down from 2.8% in October. The 0.2% m/m increase fell short of the 0.3% gain expected in the Action Economics Forecast Survey. The y/y gain in the headline CPI was the weakest since April. It was down from September’s high of 3.0% and compared to 2.9% during 2024. The CPI excluding food & energy increased 0.1% (2.6% y/y) in November. Its y/y rise compared to 2.8% y/y in October and was the weakest rise since March 2021.	

Energy prices rose 1.6% (4.1% y/y in November. Gasoline prices strengthened 3.0% (0.9% y/y). Fuel oil prices increased 3.1% (11.3% y/y). Natural gas prices fell 2.1% (+9.1% y/y), and electricity prices strengthened 1.1% (6.9% y/y). 
Food prices rose 0.1% (2.6% y/y) during November. Egg prices declined 6.4% (-13.2% y/y). Meat, poultry & fish prices strengthened 0.8% (6.8% y/y), while dairy product prices fell 0.9% (-1.6% y/y). Cereal & bakery product costs held steady (+1.9% y/y). Fruit & vegetable prices fell 0.4% and were little changed y/y. Nonalcoholic beverage prices increased 0.9% and 4.3% y/y in November.

Goods prices less food and energy rose 0.2% and rose a steady 1.4% y/y during November. Prices of used cars and trucks increased 0.3% (3.6% y/y), and new vehicle costs rose 0.2% (0.6% y/y). Appliance prices fell 0.6% (+0.5% y/y) while home furnishings prices rose 0.4% (2.6% y/y). Recreation product costs fell 0.3% but increased 0.7% y/y in November. Apparel prices increased 0.6% (0.1% y/y) in November. Education & communication product costs declined 0.3% (-3.1% y/y). Medical care goods prices rose 0.1% (1.1% y/y) in November. 

Services prices less energy edged 0.1% higher but increased 3.0% y/y in November, down from 7.0% y/y in 2022. Shelter prices (35.5% of the CPI) rose 0.1% (3.0% y/y), as owners’ equivalent rent of primary residences also rose 0.1% (3.4% y/y). Transportation service prices fell 0.3% (1.7% y/y). The cost of medical services edged 0.1% and rose 3.3% y/y, and the cost of recreation services fell 0.3% (+2.4% y/y). Education & communication services prices increased 0.4% m/m and 2.2% y/y.

The Consumer Price figures can be found in Haver's **USECON** database. The expectations figure is contained in the **AS1REPNA** database.

For the release of CPI on December 18, 2025, the BLS was able to retroactively acquire most nonsurvey data for October and will publish October 2025 values where possible. However, the majority of the CPI series rely on survey data which was not collected for October 2025 due to the government shutdown. Accordingly, the BLS will not publish October values for those series. Haver Analytics has created a second set of CPI indexes and relative importance series in **USECON**. These series will contain any published BLS values for October and interpolated values for unpublished detailed indexes. We will then calculate higher aggregate series such as the All Items index and All Items less food and energy using any published indexes along with our interpolated indexes and relative importance. 


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- Year-to-year comparison is slowest in four months.
- Core price gain exhibits weakest y/y increase since 2021. 
- Services price inflation tumbles y/y; core goods price gain is stable.


U.S. Consumer Price Inflation Moderates in November

Sandy Batten

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Existing home sales rose 0.5% m/m (-1.0% y/y) in November to 4.13 million homes (SAAR) following a 1.5% monthly gain in October and a 1.3% monthly rise in September, according to the National Association of Realtors (NAR). It was the highest level of sales since February and matched expectations in the Action Economics Forecast Survey. The average effective 30-year mortgage interest rate was unchanged at 6.54% last month, but this is down markedly from 7.10% in May and accounts for some of the revival in home sales over the past several months. The sales figures are based on closings of sales contracts signed over the past couple of months.

Existing single-family home sales rose 0.8% m/m (-0.8% y/y) in November to 3.75 million units after a 1.1% m/m rise in October and a 1.4% monthly gain in September. Sales of condos and co-ops slumped 2.6% m/m (-2.6% y/y) to 380,000 in November following a 5.4% monthly jump in October.

Compared to a month ago, sales rose 4.1% m/m in the Northeast, increased 1.1% m/m in the South, were unchanged in the West and fell 2.0% m/m in the Midwest. Compared to a year ago, sales were unchanged in both the Northeast and the South, fell 3.0% y/y in the Midwest and declined 1.3% y/y in the West.

The median price of all existing homes (NSA) declined 1.4% m/m (+1.2% y/y) to $409,200 in November. The median price of an existing single-family home fell 1.4% m/m (+1.2% y/y) to $414,300 in November. Prices of single-family homes in the Northeast edged up 0.9% from a year ago. Prices in the Midwest jumped 5.8% y/y; prices in the South rose 1.0% y/y. In contrast, prices in the West declined 0.8% from a year ago.

Inventories of homes for sale continued to weaken in November. The number of existing homes for sale (NSA) slumped 5.9% m/m (+7.5% y/y) to 1.43 million units in November. The supply of homes on the market at the current selling rate (NSA) slid to 4.2 months, its lowest reading since March.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.


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- Existing home sales increased 0.5% m/m in November, the third consecutive monthly gain.
- Month-over-month sales increased in the Northeast and South, were unchanged in the West, and fell in the Midwest.
- Year-over-year sales were unchanged in the Northeast and South and decreased in the Midwest and West.


U.S. Existing Home Sales Edged Up in November

Robert Brusca

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The new UK Confederation of British Industry (CBI) survey on the distributive trades sector shows a sharp weakening of an already weak survey for December and for the outlook into January of 2026. 

The month-to-month deterioration from November was widespread across metrics for retailing as well as for wholesaling for the current month as well as for the outlook. The monthly degradation is without exception across the board - omitting the inventory metric which is a different animal in any event since inventory building is sometimes involuntary. 

**The Retail survey**
Current conditions: In December, the retail survey for sales compared to a year ago, orders compared to year ago, and sales for the time of year (a seasonal adjustment metric), all worsened month-to-month. The November readings were weak and in December sales compared to a year-ago worsened by 12 points, Orders compared to a year ago worsened by 17 points month-to-month and sales for the time of year worsened by 11 points. These metrics for December are below their respective 12-month average by 6 to 13 points, as well for these categories. The rankings tell a stark story, year-on-year sales have been lower only 5.3% of the time, Year-on-year orders have been weaker only 5.6% of the time, while time of the year sales have been lower only 13% of the time. These are all extremely low-ranking metrics.

Expected Conditions: In January expected conditions have weakened month-to-month by amounts ranging from 33 points to 16 points depending on the metric. And sales and orders compared to a year ago as well as sales for the time of year each are weaker than their respective 12-month average readings by amounts ranging from 4 points to 23 points. The rankings on expectations are even worse than for the current metrics. Expected sales compared to a year ago rank lower less than 1% of the time, the same is true of orders. While sales for the time of year have been weaker 7.7 percent of the time. 
 
**Wholesale survey** 
The rankings for wholesaling are even lower than for retailing across the current and expected metrics. The month-to-month degradation for the current readings ranges from 7 points to 17 points weaker while the reading degradation monthly ranges from 5 points to 16 points. Wholesale sales and orders compared to a year ago and sales for the time of year each rank below the 5% mark. The expectations for January shows expectations for the three categories each are at a 2.5 percentile standing or lower. 

**Summing up**
The distributive trades survey has all but crashed and burned in December. Over the last 26 years the average of the three current metrics’ rankings has been lower only 18 times. The average outlook ranking for the month ahead has been weaker only 5 times in the last 26 years (over 313 months). On a relative basis the expected sales/orders performance is more depressed than the Current results for January. The pooled rankings show current ranking over the past 26-years weaker only 5.8 percent of the time with expectations lower only 1.6 percent of the time. These are very weak metrics. It is surprising that the BOE is walking on eggshells to cut rates with mixed support for rate cuts amid such weakness. There is already a GDP decline in the monthly data for October. UK and inflation is still too high, but it is breaking lower at a relatively fast pace. Will the UK be the first economy down after Covid? 




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United Kingdom

CBI’s Distributive Trades Survey Weakens Sharply in December

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Belgian consumer confidence has been on the rise since early this year, however, in December the index has taken a step backwards with a reading of -1 compared to a November reading of +2 and then an October reading of zero. The confidence indicator, on data back to 1991 has a ranking in its 78.5 percentile, marking it as a reasonably strong reading on confidence compared to its values over that period. On the whole the trend is still solid, the month’s step-back is small. 

**The Economic Situation** 
Economic situation for the next 12 months is weaker in December on a reading of -28 compared to -26 in November. The assessment of the previous 12-months is weaker in December at -42 compared to a reading of -38 in November. The outlook is weaker and the recent legacy is assessed as being slightly weaker as well, than it was in November. The assessment of the economic situation for the next 12 months is weak at a 9.7 percentile standing and the assessment of the previous 12 months is also weak at a 23.4 percentile standing.

**Price Trends**
Price trends are seen as higher over the next 12-months at a reading of 38 compared to 27 in November. The backward-looking assessment of price trends also has them stronger in December than 
in November at a reading of 58 compared to 56 in November. Both of these price trend assessments 
are high with the outlook reading at its 94th percentile and the backward-looking assessment in its 81st percentile. Price expectations hit their low mid 2023-late 2023 and have been on the rise steadily ever since. The price metric of ‘12-months ahead’ was at zero in April of 2024 but climbed to +19 by February 2025 and currently sits at a level of 38. Price expectations are well in gear to the upside in Belgium despite relative price stability in the Euro-Area. 

**Unemployment**
Concerns about unemployment elevated slightly in December to -9 from -10 in November but these are significant readings compared to, say, the 12-month-ago reading which is at a level of +32. The sense of backtracking here is extremely weak. The sense of progress on the part of survey respondents becoming more confident about the future is clearly the prevalent feature here. The December reading for unemployment in fact has only a 2.5 percentile standing, indicating extremely weak concerns about the prospects of unemployment ahead despite the minor month-to-month step-back.

**Major Household purchase environment**
The environment for making major household purchases deteriorates slightly in December at -15 compared to -13 in November. This only puts the index back to where it was in October. The response to the question, ‘is it favorable to buy at present’ is unchanged from its November value at -19 and it has been stuck there for three months in a row. The outlook to make major household purchases in the next 12-months logs a weaker reading at -15 than its 12-month value of -13but is stronger than its 12-month level of -18. The reading for the ‘favorable to buy at present’ question, however, is weaker at a -19 compared to -14, logged 12-months ago. The environment for making a household purchase over the next 12-months has a 55.6 percentile ranking which is above its median, however, the assessment of ‘favorable to buy at present’ has only a 20th percentile standing significantly below its median reading (median readings occur at a ranking of 50%)..

**The Financial situation**
The financial situation for the next 12-months is assessed weaker at -3 in December, compared to zero in November; it compares to a - 2 in October. The assessment 12-months ago was also -2 so this is a very minor deterioration comparing the financial situation of households with the last 12-months produces another deterioration at -8 in December compared to -6 in November and that compares to 12-months ago at -5 another deterioration. However, the backward-looking assessment has a 52-percentile standing which is above its median while the outlook reading of -3 has a 23-percentile standing which puts it in the lower quarter of all expectations on data back to 1991. The current situation is appraised at 20 a step-back from November and October levels as well as from 12-months ago. But the current appraisal also has a queue standing in its 65.7 percentile which has a comfortable margin above its median reading. Households clearly have concerns about their financial situation even though their outlook for making household purchases is above median and their concerns about unemployment are low. Currently, conditions appear to be construed as solid.

**Savings**
Household savings over the next 12-months are weaker in December at a reading of 20 compared to 26 in November; they are closer to their 12-month ago reading of 21. December is still a relatively high reading, in any event, with a 91-percentile standing. The question, ‘is it favorable to save at present’ is unchanged in November compared to December at a reading of -28 although it is weaker than it was 12-months ago and the percentile standing at its 78th percentile, again, a firm reading for this metric.

**Summing up - assessment** 
The consumer confidence reading from the Belgian National Bank this month shows a slight set back month-to-month, however, there is a significant an improvement that has been underway that is quite clear from the chart. The concerns that consumers have seemed to be about their financial situation haven't translated into concerns about unemployment or their willingness to make major household purchases, with unemployment concerns very low and their willingness to make household purchases for the period ahead at essentially normal levels. Still, there is more concern about inflation that is percolating, which is interesting considering that overall inflation has been relatively stable and muted in the European monetary area. 




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Belgium

Belgian Consumer Confidence - On the Rise, but Weaker Month-to-Month

Andrew Cates

**Faster-than-Expected Monetary Easing**
Our first potential upside risk for 2026 is that monetary policy across most major advanced economies is loosened further and by more than markets and forecasters currently anticipate. Monetary policy cycles have a history of being underestimated in both length and magnitude—in large part because of the powerful feedback loops between interest rates, inflation, and economic behaviour. On the way up, higher policy rates feed into mortgage costs, debt-service burdens, rents, and the general cost of doing business, reinforcing wage pressures and inflation persistence. But these same channels work in reverse on the way down. As rates fall, debt servicing eases, housing and rental inflation softens, and cost pressures across the economy unwind more rapidly than expected—allowing inflation to decelerate faster and creating scope for further easing. A risk, therefore, is that if disinflation becomes self-reinforcing, central banks find themselves cutting rates more aggressively than currently priced, not because of economic distress, but because restrictive policy proves increasingly unnecessary.

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**Energy Supply Dynamics Prove More Supportive**
The second chart reinforces the message from the first: easing monetary policy may be accompanied—and amplified—by a more benign energy backdrop. Recent projections from the EIA point to a renewed build-up in OECD crude oil and liquids inventories over the year ahead, a dynamic that has historically been associated with downward pressure on oil prices. If inventories continue to rise as supply growth outpaces demand, spot prices for crude could undershoot current forecasts, keeping energy inflation subdued. That, in turn, would reinforce disinflationary forces already in play—lowering headline CPI, easing cost pressures for firms and households, and giving central banks greater confidence to loosen policy further. In that sense, softer oil prices would not just be a standalone positive shock, but part of a reinforcing feedback loop alongside rate cuts, supporting real incomes, financial conditions, and global growth into 2026.


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**AI-Driven Productivity Gains Materialise More Quickly** 
The third chart shows a clear pickup in US nonfinancial productivity growth, reviving the debate around whether AI-driven efficiency gains may arrive sooner than many forecasters expect. While the longer-term productivity potential of AI remains uncertain and uneven across sectors, there are reasons to think that at least some near-term gains could prove more tangible than currently assumed. Rather than transformative breakthroughs, early benefits are likely to come from incremental improvements—automation of routine processes, better scheduling and logistics, more efficient use of capital and labour, and modest reductions in overhead costs—areas where US firms are already well positioned to implement new technologies quickly. If these gains accumulate and diffuse more broadly, the implications would still be meaningful. Even a modest, sustained uplift in productivity would help contain unit labour costs, support real income growth, and raise the economy’s speed limit without generating renewed inflation pressure. In that scenario, productivity would not need to “revolutionise” the economy to matter: incremental efficiency gains could nonetheless provide a supportive backdrop for growth, earnings, and policy easing into 2026—representing a genuine upside risk to the outlook.


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**The US Economy Proves Resilient Again**
The next chart highlights a further upside risk to the 2026 outlook: the possibility that the US economy once again outperforms its peers. Unlike the typical pre-recession backdrop, there is little evidence of meaningful financial stress in the US private sector. After a prolonged period of balance-sheet repair, private-sector debt ratios have been trending lower in recent years, while the sector as a whole is running a healthy financial surplus. This stands in stark contrast to previous late-cycle episodes, which were characterised by rising leverage, widening deficits, and growing dependence on credit expansion. The absence of private-sector excesses reduces the economy’s vulnerability to higher rates and external shocks, and helps explain why growth has remained more durable than expected. If households and firms continue to prioritise balance-sheet strength rather than forced deleveraging, the usual mechanisms that tip the economy into recession may fail to materialise. In that environment, even modest easing in financial conditions could translate into renewed spending and investment, allowing the US to sustain above-trend growth into 2026—representing another upside risk to the global outlook.


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**India’s Growth Engine Accelerates Further** 
Chart 5 points to another potential upside risk for 2026 emanating from India’s economy. After a period of relative pessimism earlier in the year, consensus growth forecasts for 2026 have been revised modestly higher, even as inflation projections have continued to drift lower. This combination—firmer growth expectations alongside easing inflation pressures—creates scope for a more supportive policy backdrop than markets currently assume. With real interest rates no longer rising and financial conditions stabilising, India’s investment cycle, already underpinned by public infrastructure spending and improving corporate balance sheets, could prove more durable than forecast. If these trends persist, India may deliver growth that is both stronger and more internally driven than expected, providing a meaningful demand impulse to the broader global economy. Given India’s increasing weight in global growth, even small upside surprises would have outsized effects on trade, commodity demand, and regional activity—reinforcing the case that the global outlook for 2026 may be skewed to the upside.


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**The Global South Becomes a More Independent Source of Demand** 
The final chart points to a broader upside risk for the global economy in 2026: that economies across the so-called Global South generate more durable momentum than currently assumed. With a few notable exceptions—such as China and Thailand—many emerging economies continue to benefit from stronger growth in their working-age populations and/or faster real GDP per capita growth than their advanced-economy counterparts. These demographic and income dynamics are helping to underpin domestic consumption, support labour-force expansion, and attract capital inflows, as reflected in the pattern of net FDI across countries. In contrast, much of the advanced world faces binding demographic constraints and lower steady-state growth rates, limiting the scope for demand to re-accelerate organically. If growth in the Global South proves more resilient and internally driven—rather than overly dependent on exports to advanced economies—it could provide a more stable and geographically diversified source of global demand. In that scenario, global growth in 2026 would be less reliant on a narrow set of advanced economies, reinforcing the case that risks to the outlook may be skewed to the upside.


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_This marks our final Charts of the Week publication for 2025 The next edition will be released on Thursday 8 January._

Last week’s Charts of the Week focused on the darker tail risks hanging over the 2026 outlook: the possibility of monetary policy mis-calibration, that geopolitics and trade fragmentation further disrupt supply chains, and that elevated debt levels—particularly in the public sector—reassert themselves as a drag on growth. This week’s charts take a deliberately different tack. Taken together, they highlight a set of upside risks that are possibly underappreciated in current forecasts. For example, policy easing across advanced economies may extend further than expected as disinflation feeds on itself (chart 1); oil prices could surprise on the downside as inventories rebuild (chart 2); US productivity may deliver incremental but meaningful gains sooner than assumed (chart 3); the US economy itself could continue to benefit from an absence of private-sector financial stress (chart 4); India’s growth momentum might firm again as inflation pressures recede (chart 5); and, more broadly, parts of the Global South appear increasingly capable of generating their own demand impulse, supported by favourable demographics and income growth (chart 6). None of these forces is guaranteed, and each carries its own caveats—but together they suggest that, having spent much of the past year fixated on downside risks, the risks to global growth in 2026 may be more evenly balanced than is widely assumed.

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Economy in Brief: 2005

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Small Business Optimism Up, Pricing Intentions Cool

Small Business Optimism Up, Pricing Intentions Cool

September Industrial Production in Denmark, Germany, Norway and the UK

Challenger Layoffs Up Again in October, Trend Lower

Challenger Layoffs Up Again in October, Trend Lower

Canadian Employment Rebounds in October; Participation Rate & Unemployment Steady

October U.S. Payrolls Soft

October U.S. Payrolls Soft