Carol Stone, CBE

<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/050609c.jpg" width="353">
Industrial production picked up in the UK in April, rising 0.8%, the first increase since December. Metals, machinery, wood and paper products and electrical machinery were among the main movers in April&#39;s upturn. Beneficial to UK industry as this was, it still left production down 2.7% from a year ago. The manufacturing sector is also off by that amount and the mining sector, even more. Notably, among mining divisions, the energy sector has been lagging, while non-energy mining output is climbing. Year-on-year declines in the manufacturing sector are widespread, with output of textiles, paper, and electrical machinery all down at least 7%; thus, gains for all of these in April are gratifying, although that in textiles is quite small at 0.4%, month-on-month. Overall, the UK industrial sector appears hesitant, and with sluggishness in the industrial sector mirrored in employment and also most recent in a decline in new home construction starts.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050609b.jpg" width="353">
South Africa also reported April production data today. That nation&#39;s industrial activity looks much healthier, with widespread uptrends in both factory and mining sectors. Output of manufactures is up vigorously, with a 2.8% month-on-month rise in April, capping a 7.1% yearly gain. The largest increases are in food, glass, motor vehicles and furniture. South Africa&#39;s mining sector saw a monthly decrease, but trends there are generally strong, with output of nearly every major mineral well above a year ago. Copper, for instance, has seen year-to-year increases the last two months, apparently ending a long decline. &quot;Other&quot; metals have risen 27% and diamonds, 33.5%. Only nickel and gold show year-over-year declines. Mining represents nearly a quarter of total industry in South Africa, compared with 14% in the UK.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Industrial Production</th>
<th scope="col">Apr 2005</th>
<th scope="col">Mar 2005</th>
<th scope="col">Year Ago</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">UK Total</td>
<td>0.8</td>
<td>-1.0</td>
<td>-2.7</td>
<td>0.5</td>
<td>-0.1</td>
<td>-2.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.9</td>
<td>-1.6</td>
<td>-2.7</td>
<td>1.4</td>
<td>0.5</td>
<td>-3.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining</td>
<td>0.6</td>
<td>1.3</td>
<td>-5.8</td>
<td>-7.8</td>
<td>-5.3</td>
<td>-0.3</td>
</tr>
<tr>
<td class="firstcol">South Africa</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>2.8</td>
<td>0.7</td>
<td>7.1</td>
<td>4.3</td>
<td>-1.9</td>
<td>4.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining</td>
<td>-3.2</td>
<td>12.9</td>
<td>7.1</td>
<td>3.9</td>
<td>4.0</td>
<td>0.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining ex Gold</td>
<td>-2.0</td>
<td>15.0</td>
<td>12.6</td>
<td>7.3</td>
<td>7.2</td>
<td>0.8</td>
</tr>
</tbody>
</table>
</body>
</html>

Industrial production picked up in the UK in April, rising 0.8%, the first increase since December. Metals, machinery, wood and paper products and electrical machinery were among the main movers in April's upturn. Beneficial to UK [...]

More Industrial Production: Lackluster in the UK, Trending Upward in South Africa

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/050609a.jpg" width="353">
Initial claims for unemployment insurance fell 21,000 to 330,000 last week and reversed most of the prior period&#39;s slightly revised jump. Consensus expectations had been for 335,000 claims.
During the last ten years there has been a (negative) 75% correlation between the level of initial claims for unemployment insurance and the monthly change in payroll employment. There has been a (negative) 65% correlation with the level of continuing claims.
The four week moving average of initial claims fell to 331,750 (-4.2% y/y).
Continuing claims for unemployment insurance fell 4,000 following a downwardly revised gain the prior week.
The insured unemployment rate remained stable at 2.0% for the seventh consecutive week.
Equilibrium Models of Personal Bankruptcy: A Survey from the Federal Reserve Bank of Richmond can be found <a href="http://www.rich.frb.org/publications/economic_research/economic_quarterly/pdfs/spring2005/athreya.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">06/04/05</th>
<th scope="col">05/28/05</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">Initial Claims</td>
<td>330</td>
<td>351</td>
<td>-4.9%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,588</td>
<td>-10.3%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance fell 21,000 to 330,000 last week and reversed most of the prior period's slightly revised jump. Consensus expectations had been for 335,000 claims. During the last ten years there has been a [...]

Initial Unemployment Insurance Claims Back Down

<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/050609a.jpg" width="353">
Initial claims for unemployment insurance fell 21,000 to 330,000 last week and reversed most of the prior period&#39;s slightly revised jump. Consensus expectations had been for 335,000 claims.
During the last ten years there has been a (negative) 75% correlation between the level of initial claims for unemployment insurance and the monthly change in payroll employment. There has been a (negative) 65% correlation with the level of continuing claims.
The four week moving average of initial claims fell to 331,750 (-4.2% y/y).
Continuing claims for unemployment insurance fell 4,000 following a downwardly revised gain the prior week.
The insured unemployment rate remained stable at 2.0% for the seventh consecutive week.
Equilibrium Models of Personal Bankruptcy: A Survey from the Federal Reserve Bank of Richmond can be found <a href="http://www.rich.frb.org/publications/economic_research/economic_quarterly/pdfs/spring2005/athreya.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></th>
<th scope="col">06/04/05</th>
<th scope="col">05/28/05</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">Initial Claims</td>
<td>330</td>
<td>351</td>
<td>-4.9%</td>
<td>343</td>
<td>402</td>
<td>404</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>2,588</td>
<td>-10.3%</td>
<td>2,926</td>
<td>3,531</td>
<td>3,570</td>
</tr>
</tbody>
</table>
More Industrial Production: Lackluster in the UK, Trending Upward in South Africa 
by <a href="/comment/Stone.html">Carol Stone</a> June 9, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050609c.jpg" width="353">
Industrial production picked up in the UK in April, rising 0.8%, the first increase since December. Metals, machinery, wood and paper products and electrical machinery were among the main movers in April&#39;s upturn. Beneficial to UK industry as this was, it still left production down 2.7% from a year ago. The manufacturing sector is also off by that amount and the mining sector, even more. Notably, among mining divisions, the energy sector has been lagging, while non-energy mining output is climbing. Year-on-year declines in the manufacturing sector are widespread, with output of textiles, paper, and electrical machinery all down at least 7%; thus, gains for all of these in April are gratifying, although that in textiles is quite small at 0.4%, month-on-month. Overall, the UK industrial sector appears hesitant, and with sluggishness in the industrial sector mirrored in employment and also most recent in a decline in new home construction starts.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050609b.jpg" width="353">
South Africa also reported April production data today. That nation&#39;s industrial activity looks much healthier, with widespread uptrends in both factory and mining sectors. Output of manufactures is up vigorously, with a 2.8% month-on-month rise in April, capping a 7.1% yearly gain. The largest increases are in food, glass, motor vehicles and furniture. South Africa&#39;s mining sector saw a monthly decrease, but trends there are generally strong, with output of nearly every major mineral well above a year ago. Copper, for instance, has seen year-to-year increases the last two months, apparently ending a long decline. &quot;Other&quot; metals have risen 27% and diamonds, 33.5%. Only nickel and gold show year-over-year declines. Mining represents nearly a quarter of total industry in South Africa, compared with 14% in the UK.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Industrial Production</th>
<th scope="col">Apr 2005</th>
<th scope="col">Mar 2005</th>
<th scope="col">Year Ago</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">UK Total</td>
<td>0.8</td>
<td>-1.0</td>
<td>-2.7</td>
<td>0.5</td>
<td>-0.1</td>
<td>-2.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>0.9</td>
<td>-1.6</td>
<td>-2.7</td>
<td>1.4</td>
<td>0.5</td>
<td>-3.1</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining</td>
<td>0.6</td>
<td>1.3</td>
<td>-5.8</td>
<td>-7.8</td>
<td>-5.3</td>
<td>-0.3</td>
</tr>
<tr>
<td class="firstcol">South Africa</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>2.8</td>
<td>0.7</td>
<td>7.1</td>
<td>4.3</td>
<td>-1.9</td>
<td>4.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining</td>
<td>-3.2</td>
<td>12.9</td>
<td>7.1</td>
<td>3.9</td>
<td>4.0</td>
<td>0.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining ex Gold</td>
<td>-2.0</td>
<td>15.0</td>
<td>12.6</td>
<td>7.3</td>
<td>7.2</td>
<td>0.8</td>
</tr>
</tbody>
</table>
</body>
</html>

<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/050608c.jpg" width="353">
Manufacturing activity advanced in three Euro-Asian nations in April, according to industrial production data published today by national statistical offices. In the Netherlands, manufacturing output gained 1.8%, partially reversing two down months. A generally sluggish pattern has prevailed there, so that April&#39;s amount was down 0.7% (working day adjusted) from April 2004. Total industrial output eased in the month by 0.5% as mining activity contracted.
In Slovakia, factory output surged 6% in April, a welcome gain after more than a year of basically no movement. Several diverse industries, especially machinery, textiles and wood products, contributed to the rise. Total industrial production also increased 6% in the month and was 5.5% ahead of a year ago.
For Turkey, a 3.7% rise in manufacturing production for April offset a 4.2% decline in March. Output there has been on a fairly firm uptrend so that year-on-year gains have run 5 to 6% over the past six months and were higher previously. As in Slovakia, a variety of industries are participating in this growth, although in both places, production in specific sectors varies widely from month to month.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050608d.jpg" width="353">
These three countries represent three differing macro-models: the well-developed economy, the emerging economy that&#39;s fairly advanced and a more emergent emerging economy. It&#39;s intriguing to compare the position of industry within each one. In the Netherlands, industry contributes the smallest portion of the country&#39;s gross value added -- about 20%, compared with 26% for Slovakia and 29% for Turkey. Among other contrasts, finance and services come in the reverse order: they total about 25% of GDP in the Netherlands, but 15.5% in Slovakia and a mere 4% in Turkey. One might envision the mature economy as having the largest industrial sector, but on a relative basis, it&#39;s the &quot;younger&quot; economy, which is perhaps developing through its emphasis on manufacturing. The movement and trading of goods and services are about midway in the ranking of their contributions to GDP, with support services, such as finance, real estate and other business services coming in last in the younger economy (but first in the mature region). Relative patterns of growth fit this structure as well. Turkey has the most rapid growth rate: about 8% over the past five years, with Slovakia at 5% and the Netherlands just 0.5%-1% recently. This reminds us of the standard product cycle in an individual industry: rapid growth at first that moderates and then plateaus as the market for the product matures. Whole countries, it seems, can behave the same way.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Industrial Production</th>
<th scope="col">Apr 2005</th>
<th scope="col">Mar 2005</th>
<th scope="col">Apr 2004</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">Netherlands: 2000 = 100</td>
<td>98.5</td>
<td>99.0</td>
<td>97.8</td>
<td>100.2</td>
<td>97.7</td>
<td>100.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>95.7</td>
<td>94.0</td>
<td>96.9</td>
<td>96.2</td>
<td>95.8</td>
<td>98.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining &amp; Quarrying</td>
<td>111.4</td>
<td>118.6</td>
<td>108.7</td>
<td>120.2</td>
<td>103.8</td>
<td>107.1</td>
</tr>
<tr>
<td class="firstcol">Slovakia: 2000 = 100</td>
<td>131.5</td>
<td>124.1</td>
<td>124.7</td>
<td>124.7</td>
<td>120.9</td>
<td>114.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>142.7</td>
<td>134.6</td>
<td>133.3</td>
<td>134.5</td>
<td>129.9</td>
<td>120.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining &amp; Quarrying</td>
<td>84.1</td>
<td>86.6</td>
<td>90.8</td>
<td>94.4</td>
<td>105.5</td>
<td>111.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Turkey: 1997 = 100</td>
<td>131.1</td>
<td>126.5</td>
<td>125.0</td>
<td>123.4</td>
<td>112.4</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>131.1</td>
<td>126.4</td>
<td>126.1</td>
<td>123.7</td>
<td>112.1</td>
<td>102.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining &amp; Quarrying</td>
<td>91.4</td>
<td>87.7</td>
<td>72.4</td>
<td>82.6</td>
<td>79.4</td>
<td>82.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Manufacturing activity advanced in three Euro-Asian nations in April, according to industrial production data published today by national statistical offices. In the Netherlands, manufacturing output gained 1.8%, partially reversing [...]

Industrial Production Shows Three-Tiered Performance in Netherlands, Slovakia and Turkey

<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/050608b.jpg" width="353">
Total mortgage applications last week recovered more than all of the prior week&#39;s decline and rose 6.5%. Applications began the month 3.5% ahead of the May average which rose 6.5% versus April, according to the Mortgage Bankers Association.
Applications to refinance were quite strong posting a 10.3% w/w increase and began June 9.7% higher than in May which rose 11.2% from April.
Purchase applications rose 3.6% after the prior week&#39;s 4.1% decline to begin the month down modestly from May which rose 3.1% from April. During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
The effective interest rate on a conventional 30-year mortgage fell to 5.78% from 5.83% the week prior. During only two other weeks this year has the 30 year rate been lower. The effective rate on a 15-year mortgage fell slightly to 5.41%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
U.S. Economy: We&#39;re All Living on Borrowed Time from William G. Gale and Peter R. Orszag at the Brookings Institution can be found <a href="http://www.brookings.edu/views/op-ed/20050601galeorszag.htm"> here</a>.
Banking, Markets and Efficiency from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr210.html"> 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/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">06/03/05</th>
<th scope="col">05/27/05</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">Total Market Index</td>
<td>755.5</td>
<td>709.1</td>
<td>32.8%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>479.3</td>
<td>462.7</td>
<td>10.9%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,362.1</td>
<td>2,142.1</td>
<td>73.3%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Total mortgage applications last week recovered more than all of the prior week's decline and rose 6.5%. Applications began the month 3.5% ahead of the May average which rose 6.5% versus April, according to the Mortgage Bankers [...]

Mortgage Applications Recovered

<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/050608a.jpg" width="353">
The Bureau of Labor Statistics reported that the job openings rate, from the Job Openings &amp; Labor Turnover Survey (JOLTS), firmed to nearly a four year high of 2.7%. 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. The total number of job openings also rose 1.8% m/m (17.8% y/y) after an upwardly revised gain in March.
The hires rate backpedaled to 3.4% from a downwardly revised March level. The hires rate is the number of hires during the month divided by employment.
Job separations were stable, indicated by a separation rate of 3.4%. 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>.

<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/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">April &#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>2.6%</td>
<td>2.3%</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>3.6%</td>
<td>3.4%</td>
<td>3.4%</td>
<td>3.2%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
</body>
</html>

The Bureau of Labor Statistics reported that the job openings rate, from the Job Openings & Labor Turnover Survey (JOLTS), firmed to nearly a four year high of 2.7%. The job openings rate is the number of job openings on the last [...]

JOLTS: U.S. Job Openings Firm Further

<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/050608a.jpg" width="353">
The Bureau of Labor Statistics reported that the job openings rate, from the Job Openings &amp; Labor Turnover Survey (JOLTS), firmed to nearly a four year high of 2.7%. 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. The total number of job openings also rose 1.8% m/m (17.8% y/y) after an upwardly revised gain in March.
The hires rate backpedaled to 3.4% from a downwardly revised March level. The hires rate is the number of hires during the month divided by employment.
Job separations were stable, indicated by a separation rate of 3.4%. 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>.

<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/@EB14/@EB14.HTM">JOLTS</a> (Job Openings &amp; Labor Turnover Survey)</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">April &#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>2.6%</td>
<td>2.3%</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>3.6%</td>
<td>3.4%</td>
<td>3.4%</td>
<td>3.2%</td>
<td>3.2%</td>
</tr>
</tbody>
</table>
Mortgage Applications Recovered 
by <a href="/comment/Moeller.html">Tom Moeller</a> June 8, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050608b.jpg" width="353">
Total mortgage applications last week recovered more than all of the prior week&#39;s decline and rose 6.5%. Applications began the month 3.5% ahead of the May average which rose 6.5% versus April, according to the Mortgage Bankers Association.
Applications to refinance were quite strong posting a 10.3% w/w increase and began June 9.7% higher than in May which rose 11.2% from April.
Purchase applications rose 3.6% after the prior week&#39;s 4.1% decline to begin the month down modestly from May which rose 3.1% from April. During the last ten years there has been a 50% correlation between the y/y change in purchase applications and the change in new plus existing single family home sales.
The effective interest rate on a conventional 30-year mortgage fell to 5.78% from 5.83% the week prior. During only two other weeks this year has the 30 year rate been lower. The effective rate on a 15-year mortgage fell slightly to 5.41%.
The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey accounts for more than 40% of all applications processed each week by mortgage lenders. Visit the Mortgage Bankers Association site <a href="http://www.mbaa.org">here</a>.
U.S. Economy: We&#39;re All Living on Borrowed Time from William G. Gale and Peter R. Orszag at the Brookings Institution can be found <a href="http://www.brookings.edu/views/op-ed/20050601galeorszag.htm"> here</a>.
Banking, Markets and Efficiency from the Federal Reserve Bank of New York is available <a href="http://www.newyorkfed.org/research/staff_reports/sr210.html"> 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/@S5/@S5.HTM">MBA Mortgage Applications (3/16/90=100)</a></th>
<th scope="col">06/03/05</th>
<th scope="col">05/27/05</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">Total Market Index</td>
<td>755.5</td>
<td>709.1</td>
<td>32.8%</td>
<td>735.1</td>
<td>1,067.9</td>
<td>799.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Purchase</td>
<td>479.3</td>
<td>462.7</td>
<td>10.9%</td>
<td>454.5</td>
<td>395.1</td>
<td>354.7</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Refinancing</td>
<td>2,362.1</td>
<td>2,142.1</td>
<td>73.3%</td>
<td>2,366.8</td>
<td>4,981.8</td>
<td>3,388.0</td>
</tr>
</tbody>
</table>
Industrial Production Shows Three-Tiered Performance in Netherlands, Slovakia and Turkey 
by <a href="/comment/Stone.html">Carol Stone</a> June 8, 2005


<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050608c.jpg" width="353">
Manufacturing activity advanced in three Euro-Asian nations in April, according to industrial production data published today by national statistical offices. In the Netherlands, manufacturing output gained 1.8%, partially reversing two down months. A generally sluggish pattern has prevailed there, so that April&#39;s amount was down 0.7% (working day adjusted) from April 2004. Total industrial output eased in the month by 0.5% as mining activity contracted.
In Slovakia, factory output surged 6% in April, a welcome gain after more than a year of basically no movement. Several diverse industries, especially machinery, textiles and wood products, contributed to the rise. Total industrial production also increased 6% in the month and was 5.5% ahead of a year ago.
For Turkey, a 3.7% rise in manufacturing production for April offset a 4.2% decline in March. Output there has been on a fairly firm uptrend so that year-on-year gains have run 5 to 6% over the past six months and were higher previously. As in Slovakia, a variety of industries are participating in this growth, although in both places, production in specific sectors varies widely from month to month.<img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050608d.jpg" width="353">
These three countries represent three differing macro-models: the well-developed economy, the emerging economy that&#39;s fairly advanced and a more emergent emerging economy. It&#39;s intriguing to compare the position of industry within each one. In the Netherlands, industry contributes the smallest portion of the country&#39;s gross value added -- about 20%, compared with 26% for Slovakia and 29% for Turkey. Among other contrasts, finance and services come in the reverse order: they total about 25% of GDP in the Netherlands, but 15.5% in Slovakia and a mere 4% in Turkey. One might envision the mature economy as having the largest industrial sector, but on a relative basis, it&#39;s the &quot;younger&quot; economy, which is perhaps developing through its emphasis on manufacturing. The movement and trading of goods and services are about midway in the ranking of their contributions to GDP, with support services, such as finance, real estate and other business services coming in last in the younger economy (but first in the mature region). Relative patterns of growth fit this structure as well. Turkey has the most rapid growth rate: about 8% over the past five years, with Slovakia at 5% and the Netherlands just 0.5%-1% recently. This reminds us of the standard product cycle in an individual industry: rapid growth at first that moderates and then plateaus as the market for the product matures. Whole countries, it seems, can behave the same way.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Industrial Production</th>
<th scope="col">Apr 2005</th>
<th scope="col">Mar 2005</th>
<th scope="col">Apr 2004</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">Netherlands: 2000 = 100</td>
<td>98.5</td>
<td>99.0</td>
<td>97.8</td>
<td>100.2</td>
<td>97.7</td>
<td>100.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>95.7</td>
<td>94.0</td>
<td>96.9</td>
<td>96.2</td>
<td>95.8</td>
<td>98.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining &amp; Quarrying</td>
<td>111.4</td>
<td>118.6</td>
<td>108.7</td>
<td>120.2</td>
<td>103.8</td>
<td>107.1</td>
</tr>
<tr>
<td class="firstcol">Slovakia: 2000 = 100</td>
<td>131.5</td>
<td>124.1</td>
<td>124.7</td>
<td>124.7</td>
<td>120.9</td>
<td>114.8</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Manufacturing</td>
<td>142.7</td>
<td>134.6</td>
<td>133.3</td>
<td>134.5</td>
<td>129.9</td>
<td>120.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Mining &amp; Quarrying</td>
<td>84.1</td>
<td>86.6</td>
<td>90.8</td>
<td>94.4</td>
<td>105.5</td>
<td>111.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Turkey: 1997 = 100</td>
<td>131.1</td>
<td>126.5</td>
<td>125.0</td>
<td>123.4</td>
<td>112.4</td>
<td>103.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Manufacturing</td>
<td>131.1</td>
<td>126.4</td>
<td>126.1</td>
<td>123.7</td>
<td>112.1</td>
<td>102.5</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; Mining &amp; Quarrying</td>
<td>91.4</td>
<td>87.7</td>
<td>72.4</td>
<td>82.6</td>
<td>79.4</td>
<td>82.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Louise Curley

<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/050607c.jpg" width="353">
Industrial production data for April were released today for Germany, Norway, Brazil and Hungary--a large and a small developed economy and a large and a small emerging economy.
The first chart compares the trend in manufacturing production for Germany and Norway. Indexes for manufacturing rather than the total are used as the total indexes for these countries are particularly erratic, including such volatile industries as construction in Germany and oil and gas extraction and mining and quarrying in Norway. For instance, the increase in the total index for Germany was 1.1% from March to April but after excluding the 18.6% rise in construction, manufacturing was up only 0.5%. In Norway the total was up 4.7%, but excluding the rise of 6.3% in oil and gas extraction and of 17.9% in mining and quarrying, up, manufacturing was up only 2.2% Production has increased in recent months in both countries, but there has been no strong trend since 2000. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/050607d.jpg" width="353">
In contrast industrial production in the two emerging market countries has been in a strong uptrend since 2000 as can be seen in the second chart. While index numbers tell us nothing of magnitudes, they do reveal changes in the levels of production. To make it easier to compare the growth in production in the four countries we have adjusted the figures for Norway and Brazil, putting both on a bases of 2000 =100. The official Norway data are based on 1995=100 and those for Brazil, on 2002=100. These calculations are shown in the table below.
Currently production in the emerging market economies is well above 2000 levels--some 15% in Brazil and 30% in Hungary while manufacturing production in Norway is slightly below the level of 2000 and in Germany, only slightly above. Production in Brazil is beginning to falter, but production in Hungary is still strong.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">Industrial Production</th>
<th scope="col">Apr 05</th>
<th scope="col">Mar 05</th>
<th scope="col">M/M%</th>
<th scope="col">Y/Y%</th>
<th scope="col">&nbsp;2004&nbsp;&nbsp;</th>
<th scope="col">&nbsp;2003</th>
<th scope="col">&nbsp;2002</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany Mfg 2000=100</td>
<td>105.1</td>
<td>104.6</td>
<td>0.48</td>
<td>2.64</td>
<td>102.7</td>
<td>99.5</td>
<td>99.3</td>
</tr>
<tr>
<td class="firstcol">Norway Mfg 2000=100 Computed</td>
<td>98.4</td>
<td>96.2</td>
<td>2.22</td>
<td>5.63</td>
<td>95.3</td>
<td>93.9</td>
<td>98.1</td>
</tr>
<tr class="odd">
<td class="firstcol">Norway Mfg 1995 =100 Official&nbsp;</td>
<td>101.4</td>
<td>99.2</td>
<td>2.22</td>
<td>5.63</td>
<td>98.2</td>
<td>96.8</td>
<td>101.1</td>
</tr>
<tr>
<td class="firstcol">&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">Hungary 2000=100</td>
<td>130.50</td>
<td>126.58</td>
<td>3.10</td>
<td>7.26</td>
<td>123.10</td>
<td>114.37</td>
<td>107.82</td>
</tr>
<tr>
<td class="firstcol">Brazil 2000=100&nbsp; Computed</td>
<td>115.69</td>
<td>115.79</td>
<td>-0.04</td>
<td>4.68</td>
<td>112.78</td>
<td>104.37</td>
<td>104.37</td>
</tr>
<tr class="odd">
<td class="firstcol">Brazil 2002=100 Official</td>
<td>110.84</td>
<td>110.88</td>
<td>-0.04</td>
<td>4.68</td>
<td>108.05</td>
<td>100.0</td>
<td>100.0</td>
</tr>
</tbody>
</table>
</body>
</html>

Industrial production data for April were released today for Germany, Norway, Brazil and Hungary--a large and a small developed economy and a large and a small emerging economy. The first chart compares the trend in manufacturing [...]

Industrial Production: Germany, Norway, Brazil and Hungary

Cost of transporting crude oil has soared to series high

Market-based inflation expectations have not yet reflected recent surge in oil prices

Global equity markets are fearing a major economic disruption from soaring oil prices

Is recent drop in sentiment signaling softer growth ahead?

With the Iran conflict, geopolitical risk has soared to alarming levels

Soaring AI-related investment in US underpinning strong contribution of business spending to overall growth

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

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

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

Tian Yong Woon

In this week’s Letter, we examine the first-round price impacts of the surge in oil prices stemming from the ongoing Middle East conflict in Asia. Despite recent rhetoric and reports suggesting a potentially swift resolution, the conflict continues to unfold, with a ceasefire hanging in the balance, and with some measures of shipping volumes through the Strait of Hormuz still reduced to a trickle. At the same time, crude oil prices have been whipsawing amid shifting market perceptions about the persistence of the current supply shock (chart 1). The initial effects of higher oil prices are already showing up in hard data, particularly in energy- and fuel-related inflation across Indonesia, South Korea, and Vietnam (chart 2). In response, several governments have rolled out sizeable subsidy programmes to cushion rising energy costs, though these measures come with significant fiscal strain.

We also assess recent consumer inflation expectations in South Korea and Taiwan, which show early signs of edging higher (chart 3), although there is as yet no clear evidence of a meaningful unanchoring. To add further nuance, our latest Blue Chip survey suggests that most panellists expect only a limited and temporary pass-through from higher energy prices to core inflation, though a non-trivial minority anticipate a more persistent effect (chart 4). On the policy front, respondents broadly expect central banks to delay easing while avoiding outright tightening, with outcomes likely to diverge across regions (chart 5). In the near term, upcoming policy decisions in India, New Zealand, and South Korea—alongside other key data releases—will provide a useful test of these expectations (chart 6).

**The Middle East conflict**
The Middle East conflict continues to rage, with IMF-tracked shipping volumes through the Strait of Hormuz still reduced to a trickle. Meanwhile, crude oil prices remain volatile, gyrating alongside shifting perceptions over how soon normal oil flows might resume. In reality, there is still little sign of a substantive resolution, and no agreement to fully reopen the strait appears imminent, suggesting that oil flows are likely to remain constrained at low levels in the near term. That said, some investors are closely monitoring developments following reports of discussions around a potential 45-day ceasefire, which could pave the way toward a more lasting resolution. Until then, and absent any meaningful supply relief, crude oil prices—and by extension, energy-related inflation—are likely to face continued upward pressure, particularly for oil-dependent, importing economies.

260406T1.jpg

**Initial price impacts**
The initial inflation concerns among policymakers and investors stemming from the surge in oil prices are now beginning to show up in the data, as illustrated in chart 2. The latest March readings—capturing the period after the onset of the Middle East conflict—already point to a sharp acceleration in energy-related prices on a year-ago basis. Indonesia’s energy CPI basket has risen by around 9%, while diesel prices in South Korea have jumped 17%. Vietnam’s retail gasoline prices have seen an even more pronounced increase, at roughly 25.6%. Given the scale of these price surges, and their direct impact on everyday essentials—particularly fuel for daily commutes and broader economic activity—governments across Asia have begun rolling out sizeable subsidy programmes. These measures, often implemented at significant fiscal cost, aim to cushion the burden on households and firms. For instance, South Korea’s finance ministry proposed a supplementary budget of around $17.3 billion in late March to support low-income households, youth, and businesses amid higher oil prices, with approval expected by April 10. Meanwhile, Indonesia has allocated approximately $22.4 billion toward energy subsidies and support for selected energy and utilities firms to help keep prices affordable.

260406T2.jpg

**Consumer inflation expectations**
What policymakers are likely to focus on—beyond the immediate price impacts—is how the recent surge in oil prices feeds into inflation expectations. If left unanchored, these expectations could pose a far greater challenge than the supply-driven price shock itself, including reduced monetary policy effectiveness in reining in inflation and the risk of a self-fulfilling inflation cycle—though it is worth noting that such dynamics are not yet close to materialising. So far, there are some early, albeit inconclusive, signs that near-term consumer inflation expectations are beginning to drift higher in certain economies. As shown in chart 3, one-year-ahead inflation expectations edged up to 2.7% in March, while in Taiwan, consumer sentiment regarding domestic price trends over the next six months has turned notably more pessimistic relative to overall confidence.

260406T3.jpg

**The latest Blue Chip survey**
Turning to investor perspectives on how higher energy prices may feed into inflation, our special questions in the latest Blue Chip Financial Forecasts (BCFF) survey offer some useful nuance. As shown in chart 4, around two-thirds of panellists expect only a limited and temporary pass-through from higher oil prices to core inflation. That said, a non-trivial minority (31%) anticipate a more moderate and persistent pass-through. This is notable given the focus on core inflation, and underscores how energy prices can generate second-round effects even in typically non-energy components, reflecting the pervasive role of energy in everyday economic activity—from manufacturing to the upkeep of a wide range of goods and services.

260406T4.jpg

Delving deeper, we also asked panellists about their views on the prospective path of central bank policy should energy-driven inflation prove persistent. As shown in chart 5, responses broadly coalesce around two themes: central banks are likely to delay easing rather than tighten, and policy responses will vary meaningfully across regions. The former is already playing out to some extent in recent central bank decisions across Asia, with several explicitly citing the ongoing Middle East conflict as a reason to remain vigilant on inflation and refrain from easing policy prematurely. As for the latter, there are already signs of divergence in how different central banks are approaching the situation.

260406T5.jpg

**The week ahead**
Looking to the week ahead, there will be ample opportunities to assess whether investor expectations for central bank policy moves play out across Asia, with several rate decisions due—most notably in India, New Zealand, and South Korea. Also on the docket are China’s March CPI print and a range of Japan-related releases. Policymakers are likely to remain focused on balancing inflation control with supporting growth and maintaining currency stability. For now, and absent offsetting domestic factors, expectations for further near-term easing have been tempered by rising inflation risks. In China, recent CPI readings point to a modest pickup, while producer price deflation has begun to ease after a prolonged period of weak or negative inflation.

260406T6.jpg

Asia

Economic Letter from Asia: First-Round Effects

Michael J. Moran

260403A.jpg

260403B.jpg

The report on payroll employment for March was impressive when viewed in isolation. Job growth was strong at 178,000, and the advance was broadly based. The construction and manufacturing sectors both posted solid gains, and the service-producing sector registered its firmest performance in more than a year. However, the gain might be viewed as a continuation of an unusual bout of random volatility. The March advance followed a notable drop in February (-133,000, revised down from -92,000), which followed an upside surprise in January (160,000, revised up from 126,000).

To be sure, statistical noise has been a factor in the past three months, but the results also represent an encouraging shift in job growth from that in the second half of last year, when employment rose only marginally in the third quarter and fell in the fourth. The net change in the past three months seems to signal that job growth is not drying up. The net advance so far this year is far from brisk, but it is clearly in the plus column and noticeably better than results in late 2025.

The unemployment rate also might be viewed as favorable, as it dipped 0.1 percentage point to 4.3%, although it was a “soft” decline. That is, employment as measured by the household survey declined 64,000, but the size of the labor force fell by a larger amount (off 396,000). Still, the jobless rate has climbed only modestly higher since the labor market started to ease in 2023, and it has inched lower in the past few months.

Unemployment has been contained despite modest hiring because layoffs also have been light. Initial claims for unemployment benefits have moved sideways in the past few years, indicating no change in the pace of layoffs. This pattern is confirmed by terminations data in the report on job openings and labor turnover (JOLTs) from the Bureau of Labor Statistics.

A supply-side shift in the labor market also has helped to contain the unemployment rate. Growth in the size of the labor force has slowed, and with fewer individuals seeking employment, those searching are more easily absorbed. Measures of the size of the labor force can be difficult to assess because there are breaks in the series every year. The Bureau of Labor Statistics adjusts the population controls used in its estimating procedure every January without revising past data to align with the new estimates. Thus, every January involves a discontinuity in the series, which will distort year-over-year changes.

However, Haver Analytics maintains a smoothed series originally developed by BLS to eliminate the breaks in the labor force data. As shown in the chart below, the smoothed series on the size of the labor force had been growing at a pace centered on 1.2% through 2022, but it has slowed irregularly since then (an observation for October is not available because of limited data collection during the government shutdown). The overall labor force is still growing, but the slower pace means fewer individuals looking for work, which most likely results in fewer being counted as unemployed.

The BLS collects data every month on both native-born and foreign-born individuals in the labor force. The breaks in these series are an issue, and Haver does not maintain smoothed series. However, the use of moving averages achieves enough smoothing to provide a sense of underlying changes. The native-born labor force has moved erratically in the past couple of years, but it has continued to advance. The foreign-born labor force, in contrast, seems to have peaked in mid-2025 and has generally declined since then.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

260403C.jpg

260403D.jpg

- The jump of 178,000 in payroll employment in March easily exceeded the expected gain of 51,000.
- Following a net gain in January and February, the employment setting seems to have brightened slightly.
- A dip in the unemployment rate continued the recent pattern of marginal changes.

Payroll Employment: Another Surprise in March, The Third Consecutive

Robert Brusca

260403E.jpg

French manufacturing industrial production was flat in February after a January rebound; output rose by 0.2% following a 0.8% decline in December.

The components of industrial production in February showed 2.6% increase in consumer durables, a 0.4% increase in consumer nondurables, flat output from capital goods, and a 0.7% month to month decline in intermediate output.

Sequentially, French output had been growing at a slow, steady pace of 0.8% at an annual rate over both 12 months and six months, but then slipped to a 6.1% contraction at an annual rate over three months. Consumer durable goods output on this span shows consistent increases, but there are no trends to clear acceleration or deceleration. Consumer nondurables trace an accelerating path of moderate means from -1.8% over 12 months, to -0.4% over six months, and then rising at a 5.5% annual rate over three months. Capital goods output is moving in the opposite direction, growing by 3.4% over 12 months, slowing to a 0.7% annual pace over six months, and then contracting at a 9.5% annual rate over three months. Intermediate goods output is falling at 0.8% pace over 12 months, but then it switches to an expansion rate of 0.8% over six months and 0.6% and over three months. There's nothing remarkable about these patterns, except there's some acceleration, some deceleration, and a lot of mulling about at low growth rates.

As a separate item, French auto production is slipping and decelerating, falling by 7.1% at an annual rate over 12 months, falling at a 7.9% pace over six months, and then plunging at a 19.3% annual rate over three months. On these same horizons, motor vehicle registrations fall by 14.7% over 12 months; the weakness pares back to an 11.2% annual rate decline over six months, and then it steps up to a 22.1% decline at an annual rate over three months. French demand for autos is not in good shape.

In the quarter to date—now two months into the first quarter—manufacturing industrial production is falling at a 0.8% annual rate. That pace is boosted by 9.4% annual rate gain in consumer durables output but restrained by just a 0.2% annual rate increase in consumer nondurable goods. Capital goods output is falling at a 1.9% annual rate, while intermediate goods output is falling at a 1% annual rate. Also in the quarter to date, automobile production is plunging at a 24.3% annual rate, while on the demand side, motor vehicle registrations are falling at a 15% annual rate.

French manufacturing data are somewhat confusing. The chart shows that the industrial production trend has been showing consistent increases over 12 months, but it has recently been pulling back relatively sharply. On the other hand, the manufacturing PMI for France has been consistently negative going back to mid-2022 and only in early 2026 has the manufacturing PMI been posting some values above the 50% mark, indicating that output was starting to actually expand. In March, the PMI reading for manufacturing has slipped back by the thinnest margin below the 50% mark.

260403.jpg

Of course, events in the Middle East make everything more speculative, with the war effectively closing the Strait of Hormuz and no certainty about how or when that is going to be sorted out. In the meantime, the potential threat of ongoing oil price pressures has put both the ECB and the Bank of England in a position to be more wary with policy, and they warned markets about the potential for rate hikes as soon as their next meetings are engaged. That also raises questions about the outlook for growth. But we continue to track and chronicle trends in the data. It's also quite clear that we could have events that will play out that could completely undermine these trends before they get a chance to run to conclusion. It's an important time to be wary and watch all developments—a lot is in play.

France

French IP Waffles

Kathleen Stephansen, CBE

260402A5.jpg

260402B5.jpg

Initial claims for unemployment insurance declined by 9,000 to 202,000 in the week ending March 28, from 211,000 in the week ending March 21, revised from 210,000. The four-week average declined 3,000 to 207,750 in the week ending March 28, from 210,750 the March 21 week, revised from 210,500. The Forecast Survey looked for 212,000 claims to have been filed.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—rose by 25,000 to 1.841 million in the week ending March 21, from 1.816 million in the week ending March 14. The four-week moving average declined to 1.839 million in the latest week from 1.846 million in the March 14 week. This is the lowest level for this average since September 28, 2024 when it was 1.834 million. The insured unemployment rate remained at 1.2% in the week of March 21. It has remained at that level since the week of November 29, 2025.

The insured unemployment rate varied greatly across individual states and territories. In the week ending March 14, the highest unemployment rates were in Rhode Island (2.83%), New Jersey (2.73%), Massachusetts (2.66%), Washington (2.39%), Minnesota (2.31%), California (2.17%), and New York (2.01%). The lowest rates were in Florida (0.31%), Louisiana (0.32%), Arkansas (0.36%), Alabama (0.38%), and North Carolina (0.40%). Rates in other notable states include Illinois (1.99%), Connecticut (1.82%), Pennsylvania (1.72%), and Texas (1.07%). 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.

260402C5.jpg

260402D5.jpg

- New claims declined by 9,000 to 202,000.
- Continuing claims rose by 25,000 to 1.841 million.
- The insured unemployment rate remained at 1.2%.

U.S. Initial Unemployment Claims Edged Down in the Week of March 28

260402E.jpg

The S&P manufacturing PMIs for March showed improvements in 44.4% of the 18 reporters. The median reading for the month was at 50.9, indicating that expanding output was the median reading through the period. The median change showed a small step back of 0.1 diffusion points month-to-month.

Sequentially, looking at average yearly activity compared to a year ago, six months compared to 12 months, and three months compared to six months, we see progress in train. For three months compared to six months, the proportion of reporters showing improvement is 72.2%. For these reporters, over six months compared to 12 months, there is a 61.1% improvement proportion, while for 12 months compared to 12 months ago, there is only a 27.8% improvement.

The median reading over three months on average is 50.7, while the median reading over six months is 50.0 and the median reading over 12 months is 49.4. These readings show a very slow but steady improvement in manufacturing over this horizon.

In addition, we calculate the queue percentile standings for each reporter—that is, the level of the current diffusion index compared to all of the observations back to January 2022, expressing the final number as the percentile standing for the current month in that queue. On that basis, the median percentile standing for this group of reporters is 76.5%. It tells us that the median standing is in the top 25 percentile of all the readings since January 2022 to date. That's a reasonably good result. For the euro area, the queue percentile standing is at the 89.8 percentile, while for Germany it's at its 91.8 percentile. For the Monetary Union and for Germany, the current numbers are some of the best we've seen during this period. However, that doesn't mean that they're necessarily stellar readings.

**PMI diffusion vs. PMI rank standings**
German diffusion in manufacturing is 52.2 in March; for the EMU it is 51.6. Germany posts the fourth-highest PMI rank standing and the fifth highest raw standing in March. The highest standing among all reporters is 52.6 from South Korea. This is a period in which no country was posting very strong manufacturing results. In fact, the United States, with a manufacturing PMI rank standing of 79.6, has a diffusion reading in March just a tick below Germany’s whose queue standing at 91.8 seems miles ahead of the U.S.—but it isn’t. Remember that the queue standings are about relative positioning.

Looking at the details, we see that below-median rank readings were logged by Mexico, Russia, India, Brazil, Indonesia, and Turkey. The Asian markets and developing economies seem to have a harder time working up to the standards achieved by other countries.

We also have averages by certain groups of countries. For example, the U.S., the U.K., the Monetary Union, Canada, and Japan—an expanded G10 groping—had an average reading of 51.3 in March, and for that group of countries, the improvements have been steady from 12 months to six months to three months. For the BRIC countries in March, the average standing was 50.4, and for that group there has been a very slight ongoing erosion. For the Asian group, on average, the March reading is 51.2, and there has been a progression to stronger readings from 49.9 over 12 months to 50.5 over six months and to 50.8 over three months.

260402.jpg

On balance, manufacturing was quite uneven in March; however, there's a progression of improvement that is still in place. But with rising oil prices, war in Iran, and lots of knock-on effects to supply trains, it's likely that these readings are going to fall on harder times in the months ahead—unless the Iran war can be wrapped up in very, very, short order. According to the Baltic Dry index, there hasn't been much reduction in global shipping of dry goods. That index excludes oil and other wet goods shipments that clearly have been impeded. However, giving it more time, we may see that the dry index begins to show some difficulties.

Economy in Brief

Jump to:

More Industrial Production: Lackluster in the UK, Trending Upward in South Africa

Initial Unemployment Insurance Claims Back Down

Initial Unemployment Insurance Claims Back Down

Industrial Production Shows Three-Tiered Performance in Netherlands, Slovakia and Turkey

Mortgage Applications Recovered

JOLTS: U.S. Job Openings Firm Further

JOLTS: U.S. Job Openings Firm Further

Industrial Production: Germany, Norway, Brazil and Hungary