Tom Moeller

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      <p>The National Federation of Independent Business indicated that its
      September index of small business optimism ticked up to 88.9 from an
      unrevised 88.1 in August. Nevertheless, it remained near the lowest level
      since last July. Improvement in firms' expectations for the economy and
      sales was offset by deterioration in jobs and the availability of credit.
      The percentage of firms raising prices made up most of last month's
      deterioration but the percentage of firms planning to raise prices fell to
      14%, its lowest since November.</p>
      <p>The most important problems faced by small business were poor sales (28%),
      government requirements (18%), taxes (16%), inflation (8%), insurance cost
      &amp; availability (7%), competition from large businesses (7%), quality
      of labor (6%), financial &amp; interest rates (3%) and the cost of labor
      (3%).</p>
      <p>Roughly 24 million small businesses exist in the U.S. and they create
      80% of all new jobs. The NFIB figures can be found in Haver's <b>SURVEYS</b>
      database.</p>
      
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      <table class="centered" width="100%" border="0" cellspacing="0">
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        <thead>
         <tr>
            <th class="firstcol" ><b>National Federation of
              Independent Business</b></th>
            <th scope="col" ><b>Sep</b></th>
            <th scope="col" >Aug</th>
            <th scope="col" ><b>Jul</b></th>
            <th scope="col" ><b>Sep<br>10</b></th>
            <th scope="col" ><b>2010</b></th>
            <th scope="col" ><b>2009</b></th>
            <th scope="col" ><b>2008</b></th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" >Small Business Optimism Index
              (SA,1986=100)</td>
            <td>88.9</td>
            <td>88.1</td>
            <td>89.9</td>
            <td>89.0</td>
            <td>89.9</td>
            <td>86.7</td>
            <td>89.8</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Firms Expecting Higher Real Sales
              In Six Months (Net %)</td>
            <td>-6</td>
            <td>-12</td>
            <td>-2</td>
            <td>-3</td>
            <td>1</td>
            <td>-11</td>
            <td>-7</td>
          </tr>
          <tr>
            <td class="firstcol" >Firms Expecting Economy To Improve
              (Net %)</td>
            <td>-22</td>
            <td>-26</td>
            <td>-15</td>
            <td>-3</td>
            <td>-1</td>
            <td>-0</td>
            <td>-10</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Firms With One or More Job Openings
              (Net %)</td>
            <td>14</td>
            <td>15</td>
            <td>12</td>
            <td>11</td>
            <td>10</td>
            <td>9</td>
            <td>18</td>
          </tr>
          <tr>
            <td class="firstcol" >Firms Reporting That Credit Was
              Harder To Get (Net %)</td>
            <td>10</td>
            <td>13</td>
            <td>10</td>
            <td>14</td>
            <td>13</td>
            <td>14</td>
            <td>9</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Firms Raising Avg. Selling Prices
              (Net %)</td>
            <td>6</td>
            <td>1</td>
            <td>7</td>
            <td>-11</td>
            <td>-12</td>
            <td>-20</td>
            <td>17</td>
          </tr>
        </tbody>
      </table>
      </span>
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The National Federation of Independent Business indicated that its September index of small business optimism ticked up to 88.9 from an unrevised 88.1 in August. Nevertheless, it remained near the lowest level since last July. [...]

U.S. Small Business Optimism Stabilizes

Louise Curley

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	  <p>The financial turmoil in the Euro Area is taking its toll on the real
      economy. Earlier this month it was reported that German Industrial
      Production declined 1.0% in August from July. Since then a number of other
      countries from the Euro Area have released data on August Industrial
      Production that have generally been positive. The exception has been
      Greece, which not unexpectedly continued to decline and was 3.2% below
      July. Some of the other troubled countries of the Area, namely,
      Spain, Portugal and Italy reported significant gains in August. 
      Spain was up 3.4%, Italy, 4.3% and Portugal 8.2%. France managed a 0.5%
      increase and Finland a 2.1% rise.</p>
      <p> The industrial production index
      representing a significant portion of country's economic activity on
      a monthly basis is often used as a predictor of the quarterly measure of
      real Gross Domestic Product. As a predictor it does have its
      limitations. It is not the most timely statistic. Here it is
      mid October and the latest data are for August. Moreover, even
      though the data are seasonally adjusted, there is considerable variation
      in the month to month changes as can be seen in the attached charts. 
      Nevertheless, over time the data show a trend that can color one's
      prediction. </p>
      <p>In the case of the first chart, industrial
      production in Italy appears to show a mildly rising trend, while the data
      for Portugal and Spain appear to be trendless and that for Greece in
      a definite down trend. In spite of the August increases in the
      industrial production indexes for Italy, Portugal and Spain, these
      increases are unlikely to result in a rise in real GDP. The decline
      in Greece's industrial production in August reflects the continued
      disruptions in the real economy of the financial crisis and is most
      unlikely to change much in the coming months.</p>
      <p>The trends in the second
      chart are in sharp contrast to those in the first chart. Industrial
      production in France, Germany and Finland, all show definite rising
      trends, suggesting that the impact of the financial crisis may be muted on
      the economies of these countries.</p>
        
      
      	<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
          
         
			      <th scope="col" class="firstcol">Industrial Production M/M % Changes in SA Indexes</th>
			      Aug<br>11
			      Jul<br>11
			      Jun<br>11
			      <th scope="col">May<br>11</th>
			      <th scope="col">Apr<br>11 </th>
			      <th scope="col">Mar<br>11</th>
			      <th scope="col">Feb<br>11</th>
			      <th scope="col">Jan<br>11</th>
			  
			  
			  <tbody>
			    <tr>
			      <td class="firstcol">Germany</td>
			      <td>-1.04</td>
			      <td>3.87</td>
			      <td>-0.89</td>
			      <td>0.99</td>
			      <td>0.09</td>
			      <td>1.00</td>
			      <td>1.29</td>
			      <td>0.18</td>
			    </tr>
			    <tr class="odd">
			      <td class="firstcol">Greece</td>
			      <td>-3.23</td>
			      <td>9.97</td>
			      <td>-456</td>
			      <td>1.59</td>
			      <td>-539</td>
			      <td>-1.60</td>
			      <td>-1.10</td>
			      <td>-1.56</td>
			    </tr>
			    <tr>
			      <td class="firstcol">Portugal</td>
			      <td>8.23</td>
			      <td>-2.89</td>
			      <td>-3.12</td>
			      <td>3.22</td>
			      <td>-384</td>
			      <td>0.75</td>
			      <td>2.31</td>
			      <td>-3.981</td>
			    </tr>
			    <tr class="odd">
			      <td class="firstcol">Spain</td>
			      <td>3.35</td>
			      <td>-0.98</td>
			      <td>-3.23</td>
			      <td>2.68</td>
			      <td>-3.41</td>
			      <td>0.12</td>
			      <td>-1.16</td>
			      <td>3.62</td>
			    </tr>
			    <tr>
			      <td class="firstcol">Italy</td>
			      <td>4.26</td>
			      <td>-0.33</td>
			      <td>-0.55</td>
			      <td>-0.44</td>
			      <td>1.00</td>
			      <td>0.67</td>
			      <td>1.60</td>
			      <td>1.68</td>
			    </tr>
			  <tr class="odd">
			      <td class="firstcol">France</td>
			      <td>0.52</td>
			      <td>1.82</td>
			      <td>-1.47</td>
			      <td>2.04</td>
			      <td>-0.75</td>
			      <td>-0.85</td>
			      <td>0.32</td>
			      <td>0.86</td>
			  </tr>
			    <tr>
			      <td class="firstcol">Finland</td>
			      <td>2.09</td>
			      <td>-0.40</td>
			      <td>-3.72</td>
			      <td>2.0</td>
			      <td>2.09</td>
			      <td>-0.30</td>
			      <td>1.81</td>
			      <td>-4.15</td>
			    </tr>
			 
   </tbody>


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The financial turmoil in the Euro Area is taking its toll on the real economy. Earlier this month it was reported that German Industrial Production declined 1.0% in August from July. Since then a number of other countries from the [...]

August Industrial Production In The Euro-Area

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      <p><a href="/comment/111010a_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111010a.png" align="left"></a>
      Consumers may have developed some economic uncertainty. Reported late
      Friday, overall consumer credit outstanding fell $9.5B following a revised
      $11.9B July rise, initially reported as $15.5B. An $8.0B increase had been
      expected by Action Economics. It was the first monthly decline in credit
      since September of last year. Credit has risen 2.1% during the last twelve
      months following the 1.7% decline during 2010.</p>
      <p>Non-revolving credit, which accounts for nearly two-thirds of the total,
      backpedaled $7.3B and reversed half of the July gain. Nevertheless, the
      4.6% y/y change builds on the 1.5% increase last year. Loans by the
      Federal government rose by more-than one-half y/y but finance company
      lending fell 4.5% y/y. Commercial bank credit also fell 4.8% y/y but
      saving institutions lending ticked up 0.5% y/y. Nonfinancial business
      credit inched up 0.9% y/y but pools of securitized assts fell 20.3% y/y.</p>
      <p>Consumers also reduced revolving credit balances during August by $2.2B
      and it lessened the y/y decline to 2.8%. Prior to 2009, revolving credit
      usage had never been negative y/y. Pools of securitized assets dropped 15.2%
      y/y and commercial bank credit fell 4.4% y/y. Meanwhile, finance company
      credit rose 6.3% y/y while savings institution credit jumped 13.0% y/y.
      Credit union lending rose a stable and slower 2.3% y/y and nonfinancial
      business credit remained unchanged.</p>
      <p>During the last ten years, there has been a 53% correlation between the
      y/y change in credit outstanding and the change in personal consumption
      expenditures, although the correlation recently has weakened considerably.
      The credit figures are the major input to the Fed's quarterly Flow of
      Funds accounts for the household sector.</p>
      <p>The consumer credit data are available in Haver's <b>USECON</b>
      database. The Action Economics figures are in the <b>AS1REPNA</b>
      database.</p>
      
      <p><a href="/comment/111010b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111010b.png"></a>
	  <a href="/comment/111010c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111010c.png"></a></p>
      
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      	<colgroup><col><col><col><col><col><col><col><col></colgroup>
        <thead>
         <tr>
            <th class="firstcol" scope="col" ><b>Consumer Credit
              Outstanding<br>
              (M/M Chg, SAAR)</b></th>
            <th scope="col"><b>Aug</b></th>
            <th scope="col"><b>Jul</b></th>
            <th scope="col"><b>Jun</b></th>
            <th scope="col"><b>Y/Y</b></th>
            <th scope="col" ><b>2010</b></th>
            <th scope="col" ><b>2009</b></th>
            <th scope="col" ><b>2008</b></th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" >Total</td>
            <td>$-9.5B</td>
            <td>$11.9B</td>
            <td>$11.3B</td>
            <td>2.1%</td>
            <td>-1.7%</td>
            <td>-4.4%</td>
            <td>1.5%</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >&nbsp;&nbsp;Revolving</td>
            <td>-2.2</td>
            <td>-3.6</td>
            <td>2.6</td>
            <td>-2.8</td>
            <td>-7.5</td>
            <td>-9.6</td>
            <td>1.7</td>
          </tr>
          <tr>
            <td class="firstcol" >&nbsp;&nbsp;Non-revolving</td>
            <td>-7.3</td>
            <td>15.5</td>
            <td>8.8</td>
            <td>4.6</td>
            <td>1.5</td>
            <td>-1.3</td>
            <td>1.5</td>
          </tr>
        </tbody>
      </table>
      </span>
</body></html>

Consumers may have developed some economic uncertainty. Reported late Friday, overall consumer credit outstanding fell $9.5B following a revised $11.9B July rise, initially reported as $15.5B. An $8.0B increase had been expected by [...]

U.S. Consumer Credit Extension Pulls Back

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      <p>Last month's reading for jobs growth was better,
      but not great. <b>Nonfarm payrolls rose 103,000 last month</b> after
      August and July increases which were upwardly revised. Several
      factors, however, discount any notion of broad-based labor market
      improvement. 1) The latest figure was boosted by 45,000 telecom strikers
      returning to work. 2) Excluding strikers, payrolls were no better than
      advertised in earlier labor market reports for September. 3) In percentage
      terms, the 0.1% September increase was hardly changed from the monthly
      increases over the last year. 4) The gain brought with it no decline in
      the unemployment rate, still at 9.1%. 5) Upward revisions to earlier
      months' figures were small and confined mostly to government
      payrolls. The Consensus estimate for September payrolls was for
      +56,000.</p>
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      <b>Nonfarm payrolls rose 103,000 </b>last month following gains of
      57,000 during August and 127,000 during July, upwardly
      revised from no-change and 85,000, respectively. The latest figure reflected the
      return to work of strikers at Verizon. Factory sector payrolls fell
      another 13,000 reflecting broad-based industry weakness. Construction employment
      rose a moderate 26,000 leaving the y/y change at 0.7%. In the private service sector,
      payrolls rose 119,000 boosted by returning strikers. Elsewhere, gains were
      moderate. To the upside,
      professional &amp; business service employment rose an improved 48,000
      (3.4%
      y/y), jobs in health care &amp; social assistance gained 40,800 (2.2%
      y/y) and retail trade employment rose 13,600 (1.1%). Temporary help jobs rose
      19,400 (8.4% y/y). On the weak side were leisure &amp; hospitality jobs
      which fell 4,000 (+0.9% y/y) and financial activities where employment
      slipped 8,000 (-2.2% y/y). Government employment fell 34,000 (-1.3% y/y)
      with declines across sectors.</p>
      <p>Elsewhere in the establishment survey, average weekly hours worked
      recovered to 34.3 for September. Along with the job gains, this left the
      Q3 index of aggregate hours worked &amp; payrolls unchanged from Q2,
      following that quarter's 0.9% rise.</p>
      <p>The modest jobs gains were accompanied by a 0.2% (2.0% y/y) increase in
      average
      hourly earnings. The gain followed an upwardly revised reading of
      no-change in August but the
      y/y gain of 2.0% was half that in 2007. Earnings in the service sector
      rose 0.2% m/m (2.0% y/y)
      and factory sector earnings were unchanged (+1.4% y/y).</p>
      <p>From the <b>household survey, </b>the unemployment rate held at an
      expected 9.1% for the fourth month in the last five. That reflected a
      398,000 increase (0.5% y/y) in employment and a 423,000 rise (-0.1% y/y) in the labor force. The overall unemployment
      rate, including involuntarily part-time workers as well as those
      marginally attached, rose to 16.5%, its highest level this year.</p>
      <p> The labor force participation
      rate slipped m/m to 52.5%. The number out of the labor force but want a
      job fell 14.2% y/y. The number
      of workers unemployed for 52 weeks or longer slipped m/m to 4.386M (+2.3%
      y/y) but remained near its high. The average duration of unemployment
      reached a new high of 40.5 weeks. The breadth of employment increase over
      the last three months fell to 56.2%, its lowest in twelve months.</p>
      <p>The figures referenced above are available in Haver's <b>USECON</b>
      database. Additional detail can be found in the <b>LABOR </b>and in the <b>EMPL</b>
      databases. The expectation figures are from Action Economics and are in
      the <b>AS1REPNA</b> database.</p>
      <p><b>What Is The New Normal Unemployment Rate?</b> from the Federal
      Reserve Bank of San Francisco is available <a href="http://dfm.idaho.gov/Publications/EAB/Forecast/2011/April/Article_0411.pdf">here</a>.</p>
      
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      	<colgroup><col><col><col><col><col><col><col><col></colgroup>
        <thead>
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            <th class="firstcol" scope="col" ><b>Employment:
              (M/M Chg., 000s)</b></th>
            <th scope="col" ><b>Sep</b></th>
            <th scope="col" ><b>Aug</b></th>
            <th scope="col" ><b>Jul</b></th>
            <th scope="col" ><b>Y/Y</b></th>
            <th scope="col" ><b>2010</b></th>
            <th scope="col" ><b>2009</b></th>
            <th scope="col" ><b>2008</b></th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" >Payroll Employment</td>
            <td>103</td>
            <td>57</td>
            <td>127</td>
            <td>1.1%</td>
            <td>-0.7%</td>
            <td>-4.4%</td>
            <td>-0.6%</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >&nbsp;&nbsp;&nbsp;&nbsp;Previous</td>
            <td>--</td>
            <td>0</td>
            <td>85</td>
            <td>--</td>
            <td>--</td>
            <td>--</td>
            <td>--</td>
          </tr>
          <tr>
            <td class="firstcol" >&nbsp;Manufacturing</td>
            <td>-13</td>
            <td>-4</td>
            <td>34</td>
            <td>1.7</td>
            <td>-2.7</td>
            <td>-11.6</td>
            <td>-3.4</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >&nbsp;Construction</td>
            <td>26</td>
            <td>-7</td>
            <td>10</td>
            <td>0.7</td>
            <td>-8.1</td>
            <td>-16.0</td>
            <td>-6.1</td>
          </tr>
          <tr>
            <td class="firstcol" >&nbsp;Private Service
              Producing</td>
            <td>119</td>
            <td>51</td>
            <td>120</td>
            <td>1.6</td>
            <td>-0.1</td>
            <td>-3.5</td>
            <td>-0.2</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >&nbsp;Government</td>
            <td>-34</td>
            <td>15</td>
            <td>-46</td>
            <td>-1.3</td>
            <td>-0.3</td>
            <td>0.3</td>
            <td>1.3</td>
          </tr>
          <tr>
            <td class="firstcol" >Average Weekly Hours</td>
            <td>34.3</td>
            <td>34.2</td>
            <td>34.3</td>
            <td>34.2<br>(Sep.'10)</td>
            <td>34.1</td>
            <td>33.9</td>
            <td>34.5</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Average Hourly Earnings
              (%)</td>
            <td>0.2</td>
            <td>0.0</td>
            <td>0.3</td>
            <td>2.0</td>
            <td>2.4</td>
            <td>3.0</td>
            <td>3.8</td>
          </tr>
          <tr>
            <td class="firstcol" >Unemployment Rate(%)</td>
            <td>9.1</td>
            <td>9.1</td>
            <td>9.1</td>
            <td>9.6<br>(Sep.'10)</td>
            <td>9.6</td>
            <td>9.3</td>
            <td>5.8</td>
          </tr>
        </tbody>
      </table></span>
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Last month's reading for jobs growth was better, but not great. Nonfarm payrolls rose 103,000 last month after August and July increases which were upwardly revised. Several factors, however, discount any notion of broad-based labor [...]

U.S. Nonfarm Payrolls' Modest Rise Aided By Strike's End

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      <br>
      <span id="articletext">
      <p>They've done this before. <b>Initial claims for jobless insurance rose
      a slight 6,000 to 391,000,000 last week </b>from 395,000 (revised from
      391,000). Together, the two numbers were near the lowest of 2011. However,
      this reaching for a low was done earlier. Twice before this year, claims
      declined then backed up to leave in place a trend level near 415,000 since
      February. The latest figure was below Consensus expectations for 410,000
      claims, according to the Action Economics survey. The 4-week moving
      average of claims slipped to 414,000. During the last ten years there has
      been a 76% correlation between the level of claims and the m/m change in
      payroll employment.</p>
      <p><b>Continuing claims for unemployment insurance fell to 3.700M in the
      September 24th week. </b>It also has been trending sideways since early
      this year.<b>  The insured unemployment rate slipped to 2.9%</b>. By
      state, the rate varied with Virginia (1.4%), Oklahoma (1.7%), Texas
      (1.8%), Ohio (1.8%), Colorado (2.0%) and Tennessee (2.1%) at the low end
      of the range. The rates in Illinois (3.0%), Connecticut (3.2%), Nevada
      (3.3%), New Jersey (3.4%, California (3.5%) and Pennsylvania (3.9%) were
      at the high end.</p>
      <p>The grand total of those receiving unemployment insurance, including
      extended programs run by the states and the federal government, was 6.862M
      as of September 17, down by one-quarter y/y. Regular extended benefits,
      with eligibility dependent on conditions in individual states, recovered
      the prior week's decline with a rise to 524,685 (-48.1% y/y) and those on
      the special "EUC 2008" programs slipped to 3.027M (-26.6% y/y).</p>
      <p>Data on weekly unemployment insurance programs are contained in Haver's
      <b>WEEKLY</b> database, including the seasonal factor series, and they are
      summarized monthly in <b>USECON</b>. Data for individual states, including
      the unemployment rates that determine individual state eligibility for the
      extended benefits programs and specific "tiers" of the emergency
      program, are in <b>REGIONW</b>, a database of weekly data for states and
      various regional divisions. Action Economics estimates are in <b>AS1REPNA</b>.</p>
      <p><b>Unemployment Insurance and the Great Recession</b> from the
      University of California, Berkeley and NBER can be found here <a href="http://www.brookings.edu/%7E/media/Files/Programs/ES/BPEA/2011_fall_bpea_papers/2011_fall_bpea_conference_rothstein.pdf">http://www.brookings.edu/~/media/Files/Programs/ES/BPEA/2011_fall_bpea_papers/2011_fall_bpea_conference_rothstein.pdf</a></p>
      <table class="centered" width="1232" border="0" cellspacing="0" height="153">
        <thead>
          <tr>
            <th class="firstcol" scope="col" width="451" height="25">Unemployment
              Insurance (000s)</th>
            <th scope="col" width="111" height="25">9/31/11</th>
            <th scope="col" width="111" height="25">9/24/11</th>
            <th scope="col" width="111" height="25">9/17/11</th>
            <th scope="col" width="111" height="25">Y/Y%</th>
            <th scope="col" width="111" height="25">2010</th>
            <th scope="col" width="111" height="25">2009</th>
            <th scope="col" width="111" height="25">2008</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" width="451" height="31">Initial Claims</td>
            <td width="111" align="center" height="31">401</td>
            <td width="111" align="center" height="31">395</td>
            <td width="111" align="center" height="31">428</td>
            <td width="111" align="center" height="31">-10.7</td>
            <td width="111" align="center" height="31">461</td>
            <td width="111" align="center" height="31">577</td>
            <td width="111" align="center" height="31">413</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="451" height="31">Continuing Claims</td>
            <td width="111" align="center" height="31">--</td>
            <td width="111" align="center" height="31">3,700</td>
            <td width="111" align="center" height="31">3,752</td>
            <td width="111" align="center" height="31">-16.9</td>
            <td width="111" align="center" height="31">4,544</td>
            <td width="111" align="center" height="31">5,807</td>
            <td width="111" align="center" height="31">3,338</td>
          </tr>
          <tr>
            <td class="firstcol" width="451" height="32">&nbsp;Insured Unemployment
              Rate(%)</td>
            <td width="111" align="center" height="32">--</td>
            <td width="111" align="center" height="32">2.9</td>
            <td width="111" align="center" height="32">3.0</td>
            <td width="111" align="center" height="32">3.5<br>
              (9/10)</td>
            <td width="111" align="center" height="32">3.6</td>
            <td width="111" align="center" height="32">4.4</td>
            <td width="111" align="center" height="32">2.5</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="451" height="32">Total "All
              Programs" (NSA)</td>
            <td width="111" align="center" height="32">--</td>
            <td width="111" align="center" height="32">--</td>
            <td width="111" align="center" height="32">6.862M</td>
            <td width="111" align="center" height="32">-24.3</td>
            <td width="111" align="center" height="32">9.850M</td>
            <td width="111" align="center" height="32">9.163M</td>
            <td width="111" align="center" height="32">3.903M</td>
          </tr>
        </tbody>
      </table>
      </span>
    </div>
  </div>
</div>

<div id="footer" class="sprites">
  <ul>
  <li>&nbsp;</li>
  </ul>
  <div id="rightside0">
    <div id="entire0" class="col">
      <span id="articletitle0"><b>Mixed Employment Indicators For September</b></span>
      <p><span id="byline0">Tomorrow's jobs report will indicate whether the
      recent weakness in payrolls continued. The indicators now in hand from
      several advance data-series give mixed signals for September. However,
      overall, they lean toward a weak reading in payrolls. The current Consensus forecast, according to Action Economics, is
      for a rise in payrolls of 56,000. That would be one of the weakest this
      year and continue the deterioration versus 2010. </span></p>
      <p><span id="byline0">Pointing toward moderate deterioration versus August
      is the rise in initial claims for jobless insurance, a decline in the
      employment component of the ISM&nbsp; non-manufacturing series and the
      rise in Challenger job cut announcements. Countering these is the rise in
      the ISM manufacturing employment component and a weak, but stable, ADP
      number.</span></p>
      <span id="articletext0">
      <table class="centered" width="1232" border="0" cellspacing="0" height="153">
        <thead>
          <tr>
            <th class="firstcol" scope="col" width="451" height="25">Employment
              Indicators</th>
            <th scope="col" width="111" height="25">September</th>
            <th scope="col" width="111" height="25">August</th>
            <th scope="col" width="111" height="25">July</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" width="451" height="31">Nonfarm Payrolls (M/M
              Change, 000s)</td>
            <td width="111" align="center" height="31">--</td>
            <td width="111" align="center" height="31">0</td>
            <td width="111" align="center" height="31">85,000</td>
          </tr>
          <tr>
            <td class="firstcol" width="451" height="31">&nbsp;&nbsp; Initial
              Unemployment Insurance Claims (Survey Week)</td>
            <td width="111" align="center" height="31">428,000</td>
            <td width="111" align="center" height="31">412,000</td>
            <td width="111" align="center" height="31">422,000</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="451" height="31">&nbsp;&nbsp; Purchasing
              Managers Mfg. Employment Index</td>
            <td width="111" align="center" height="31">53.8</td>
            <td width="111" align="center" height="31">51.8</td>
            <td width="111" align="center" height="31">53.5</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="451" height="31">&nbsp;&nbsp; Purchasing
              Managers Non-Mfg. Employment Index</td>
            <td width="111" align="center" height="31">48.7</td>
            <td width="111" align="center" height="31">51.6</td>
            <td width="111" align="center" height="31">52.5</td>
          </tr>
          <tr>
            <td class="firstcol" width="451" height="32">&nbsp;&nbsp; ADP
              Private Employment Change</td>
            <td width="111" align="center" height="32">91,000</td>
            <td width="111" align="center" height="32">89,000</td>
            <td width="111" align="center" height="32">107,000</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" width="451" height="32">&nbsp;&nbsp; Challenger
              Job Cut Announcements</td>
            <td width="111" align="center" height="32">115,730</td>
            <td width="111" align="center" height="32">51,114</td>
            <td width="111" align="center" height="32">66,414</td>
          </tr>
        </tbody>
      </table>
      </span>
    </div>
  </div>
</div>


<div id="footer0" class="sprites">
  <ul>
  </ul>
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</body></html>

They've done this before. Initial claims for jobless insurance rose a slight 6,000 to 391,000,000 last week from 395,000 (revised from 391,000). Together, the two numbers were near the lowest of 2011. However, this reaching for a low [...]

U.S. Weekly Initial Claims for Jobless Insurance Tick Higher But Trend Sideways

Robert Brusca

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<span id="articletext">
<p></p>
<p><a href="/comment/111006e_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111006e.png" align="left"></a>
German industrial orders have fallen for the second month running. In July plunging foreign 
orders took the headline for orders growth into negative territory but in August it was weak 
domestic orders that dragged the series into contraction. It’s always something.</p>
<p>Despite the fact that foreign orders show an odd 12-mo to 6-mo to 3-mo accelerating 
trend that seems more the product of some odd serendipity that a slice of reality order 
growth is slowing down. Domestic orders have on the same growth sequence taken a large 
step lower. </p>
<p>The broader Yr/Yr trends depicted in the chart take the broader perspective where the 
overarching trend is most clear. It shows both the series’ volatility as well as the clear 
downward trend for each on annual percentage changes. </p>
<p>Germany is the traditional strong country in EMU and it is under a great deal of stress. 
Germany’s growth metrics are still at or near the best of the Zone but its gauges of growth 
are weakening. Weak conditions in adjoining states as well as ongoing concerns about debt 
conditions and the prospects for knock-on effects are taking a substantial toll on growth 
and investor and consumer attitudes. In Europe investors are looking for investment 
safe-havens to protect capital instead of looking at ways to make capital grow. Risk is 
off the investment table because so much of risk encroaches on everyday life.</p>
<p></p>

<table class="centered" border="0" cellSpacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
   <th colspan="9" scope="col">German Orders and Sales By Sector and Origin</th>
    </tr>
</thead>
<tbody>
    <tr class="even">
      <td class="firstcol"><b>Real and SA</b></td>
      <td colspan="3"><b>% M/M</b></td>
      <td colspan="5"><b>% SAAR</b></td>
    </tr>
    <tr class="grey3">
      <td class="firstcol">&nbsp;</td>
      <td><b>Aug-11</b></td>
      <td><b>Jul-11</b></td>
      <td><b>Jun-11</b></td>
      <td><b>3Mo</b></td>
      <td><b>6Mo</b></td>
      <td><b>12Mo</b></td>
      <td><b>YrAgo</b></td>
      <td><b>Q-2-Date</b></td>
    </tr>
    <tr>
      <td class="firstcol">Total Orders</td>
      <td>-1.4%</td>
      <td>-2.6%</td>
      <td>1.8%</td>
      <td style="color: red;"><b>-8.6%</b></td>
      <td>4.1%</td>
      <td style="color: red;"><b>3.6%</b></td>
      <td>20.5%</td>
      <td>-7.7%</td>
    </tr>
    <tr class="odd">
      <td class="firstcol">Foreign</td>
      <td>0.1%</td>
      <td>-7.2%</td>
      <td>13.1%</td>
      <td>21.4%</td>
      <td>4.2%</td>
      <td style="color: red;"><b>1.5%</b></td>
      <td>29.0%</td>
      <td>-6.8%</td>
    </tr>
    <tr>
      <td class="firstcol">Domestic</td>
      <td>-3.2%</td>
      <td>3.7%</td>
      <td>-10.1%</td>
      <td style="color: red;"><b>-33.6%</b></td>
      <td style="color: red;"><b>4.3%</b></td>
      <td style="color: red;"><b>6.6%</b></td>
      <td>10.8%</td>
      <td>-8.3%</td>
    </tr>
    <tr class="grey3">
      <td colspan="9" class="firstcol"><b>Real Sector Sales</b></td>
    </tr>
    <tr class="odd">
      <td class="firstcol">MFG/Mining</td>
      <td>-0.4%</td>
      <td>4.0%</td>
      <td>-0.1%</td>
      <td>14.4%</td>
      <td style="color: red;"><b>7.2%</b></td>
      <td style="color: red;"><b>8.5%</b></td>
      <td style="color: red;"><b>11.1%</b></td>
      <td>17.2%</td>
    </tr>
    <tr>
      <td class="firstcol">Consumer</td>
      <td>-1.5%</td>
      <td>-1.3%</td>
      <td>2.9%</td>
      <td>0.0%</td>
      <td style="color: red;"><b>-0.6%</b></td>
      <td>2.3%</td>
      <td>1.0%</td>
      <td>-7.7%</td>
    </tr>
    <tr class="odd">
      <td class="firstcol">Cons Durables</td>
      <td>-8.8%</td>
      <td>11.5%</td>
      <td>-3.8%</td>
      <td>-8.6%</td>
      <td style="color: red;"><b>-3.8%</b></td>
      <td style="color: red;"><b>4.3%</b></td>
      <td style="color: red;"><b>8.0%</b></td>
      <td>18.4%</td>
    </tr>
    <tr>
      <td class="firstcol">Cons Non-Durable</td>
      <td>-0.2%</td>
      <td>-3.3%</td>
      <td>4.0%</td>
      <td>1.7%</td>
      <td style="color: red;"><b>0.0%</b></td>
      <td>2.0%</td>
      <td>-0.1%</td>
      <td>-11.3%</td>
    </tr>
    <tr class="odd">
      <td class="firstcol">Captial Gds</td>
      <td>1.5%</td>
      <td>7.0%</td>
      <td>-0.4%</td>
      <td>36.7%</td>
      <td>14.8%</td>
      <td style="color: red;"><b>12.9%</b></td>
      <td style="color: red;"><b>14.5%</b></td>
      <td>39.7%</td>
    </tr>
    <tr>
      <td class="firstcol">Intermediate Gds</td>
      <td>-2.1%</td>
      <td>2.5%</td>
      <td>-0.5%</td>
      <td>-1.0%</td>
      <td style="color: red;"><b>1.9%</b></td>
      <td style="color: red;"><b>7.1%</b></td>
      <td>13.3%</td>
      <td>5.2%</td>
    </tr>
    <tr class="odd">
      <td class="firstcol">All MFG-Sales</td>
      <td>-0.4%</td>
      <td>4.0%</td>
      <td>-0.1%</td>
      <td>14.4%</td>
      <td style="color: red;"><b>7.3%</b></td>
      <td style="color: red;"><b>8.5%</b></td>
      <td style="color: red;"><b>11.2%</b></td>
      <td>17.2%</td>
    </tr>
  </tbody>
</table>
</span>
</body>
</html>


German industrial orders have fallen for the second month running. In July plunging foreign orders took the headline for orders growth into negative territory but in August it was weak domestic orders that dragged the series into [...]

German Order Growth Spirals Lower

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
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<body>
      <br>
      
      <span id="articletext">
      <p></p>
      
      <p><a href="/comment/111006a_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111006a.png"></a>
	  <a href="/comment/111006b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111006b.png"></a></p>
	  
      <p>They've done this before. <b>Initial claims for jobless insurance rose
      a slight 6,000 to 391,000 last week </b>from 395,000 (revised from
      391,000). Together, the two numbers were near the lowest of 2011. However,
      this reaching for a low was done earlier. Twice before this year, claims
      declined then backed up to leave in place a trend level near 415,000 since
      February. The latest figure was below Consensus expectations for 410,000
      claims, according to the Action Economics survey. The 4-week moving
      average of claims slipped to 414,000. During the last ten years there has
      been a 76% correlation between the level of claims and the m/m change in
      payroll employment.</p>
      <p><b>Continuing claims for unemployment insurance fell to 3.700M in the
      September 24th week. </b>It also has been trending sideways since early
      this year. The insured unemployment rate slipped to 2.9%. By
      state, the rate varied with Virginia (1.4%), Oklahoma (1.7%), Texas
      (1.8%), Ohio (1.8%), Colorado (2.0%) and Tennessee (2.1%) at the low end
      of the range. The rates in Illinois (3.0%), Connecticut (3.2%), Nevada
      (3.3%), New Jersey (3.4%, California (3.5%) and Pennsylvania (3.9%) were
      at the high end.</p>

      <p>The grand total of those receiving unemployment insurance, including
      extended programs run by the states and the federal government, was 6.862M
      as of September 17, down by one-quarter y/y. Regular extended benefits,
      with eligibility dependent on conditions in individual states, recovered
      the prior week's decline with a rise to 524,685 (-48.1% y/y) and those on
      the special &quot;EUC 2008&quot; programs slipped to 3.027M (-26.6% y/y).</p>
      <p>Data on weekly unemployment insurance programs are contained in Haver's
      <b>WEEKLY</b> database, including the seasonal factor series, and they are
      summarized monthly in <b>USECON</b>. Data for individual states, including
      the unemployment rates that determine individual state eligibility for the
      extended benefits programs and specific &quot;tiers&quot; of the emergency
      program, are in <b>REGIONW</b>, a database of weekly data for states and
      various regional divisions. Action Economics estimates are in <b>AS1REPNA</b>.</p>

      <p><b>Unemployment Insurance and the Great Recession</b> from the
      University of California, Berkeley and NBER can be found 
      <a href="http://www.brookings.edu/~/media/Files/Programs/ES/BPEA/2011_fall_bpea_papers/2011_fall_bpea_conference_rothstein.pdf">here</a>.</p>
    
     <p><a href="/comment/111006c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111006c.png"></a>
	 <a href="/comment/111006d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111006d.png"></a></p>
	 
      <table class="centered" width="100%" border="0" cellspacing="0">
      	<colgroup><col><col><col><col><col><col><col><col></colgroup>
        <thead>
         <tr>
            <th class="firstcol" scope="col" >Unemployment
              Insurance (000s)</th>
            <th scope="col" >9/31/11</th>
            <th scope="col" >9/24/11</th>
            <th scope="col" >9/17/11</th>
            <th scope="col" >Y/Y%</th>
            <th scope="col" >2010</th>
            <th scope="col" >2009</th>
            <th scope="col" >2008</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" >Initial Claims</td>
            <td>401</td>
            <td>395</td>
            <td>428</td>
            <td>-10.7</td>
            <td>461</td>
            <td>577</td>
            <td>413</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Continuing Claims</td>
            <td>--</td>
            <td>3,700</td>
            <td>3,752</td>
            <td>-16.9</td>
            <td>4,544</td>
            <td>5,807</td>
            <td>3,338</td>
          </tr>
          <tr>
            <td class="firstcol" >&nbsp;Insured Unemployment
              Rate(%)</td>
            <td>--</td>
            <td>2.9</td>
            <td>3.0</td>
            <td>3.5<br>
              (9/10)</td>
            <td>3.6</td>
            <td>4.4</td>
            <td>2.5</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Total "All
              Programs" (NSA)</td>
            <td>--</td>
            <td>--</td>
            <td>6.862M</td>
            <td>-24.3</td>
            <td>9.850M</td>
            <td>9.163M</td>
            <td>3.903M</td>
          </tr>
        </tbody>
      </table><br>

      <p><b>Mixed Employment Indicators For September</b> Tomorrow's jobs report will indicate whether the
      recent weakness in payrolls continued. The indicators now in hand from
      several advance data-series give mixed signals for September. However,
      overall, they lean toward a weak reading in payrolls. The current Consensus forecast, according to Action Economics, is
      for a rise in payrolls of 56,000. That would be one of the weakest this
      year and continues the deterioration versus 2010. </p>
      <p>Pointing toward moderate deterioration versus August
      is the rise in initial claims for jobless insurance, a decline in the
      employment component of the ISM non-manufacturing series and the
      rise in Challenger job cut announcements. Countering these is the rise in
      the ISM manufacturing employment component and a weak, but stable, ADP
      number.</p>
      <table class="centered" width="100%" border="0" cellspacing="0">
      	<colgroup><col><col><col><col></colgroup>
        <thead>
         <tr>
            <th class="firstcol" scope="col" >Employment
              Indicators</th>
            <th scope="col" >September</th>
            <th scope="col" >August</th>
            <th scope="col" >July</th>
          </tr>
        </thead>
        <tbody>
          <tr>
            <td class="firstcol" >Nonfarm Payrolls (M/M
              Change, 000s)</td>
            <td>--</td>
            <td>0</td>
            <td>85,000</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Initial
              Unemployment Insurance Claims (Survey Week)</td>
            <td>428,000</td>
            <td>412,000</td>
            <td>422,000</td>
          </tr>
          <tr>
            <td class="firstcol" >Purchasing
              Managers Mfg. Employment Index</td>
            <td>53.8</td>
            <td>51.8</td>
            <td>53.5</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Purchasing
              Managers Non-Mfg. Employment Index</td>
            <td>48.7</td>
            <td>51.6</td>
            <td>52.5</td>
          </tr>
          <tr>
            <td class="firstcol" >ADP
              Private Employment Change</td>
            <td>91,000</td>
            <td>89,000</td>
            <td>107,000</td>
          </tr>
          <tr class="odd">
            <td class="firstcol" >Challenger
              Job Cut Announcements</td>
            <td>115,730</td>
            <td>51,114</td>
            <td>66,414</td>
          </tr>
        </tbody>
      </table>
      </span>
</body></html>

They've done this before. Initial claims for jobless insurance rose a slight 6,000 to 391,000 last week from 395,000 (revised from 391,000). Together, the two numbers were near the lowest of 2011. However, this reaching for a low was [...]

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<html><head>
</head>
<body>
      		  <br>
		      
		      <span id="articletext">
		      <p></p>
		      		      
		      <p><a href="/comment/111005k_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111005k.png" align="left"></a>
		      The index of total mortgage applications fell 4.3% last week to 734.0
		      (March 16, 1990 = 100). Despite the decline, applications rose slightly
		      for the full month. Overall, applications have risen more-than 80% since
		      their early-year low. The jump has come as lower interest rates spurred
		      refinancing.</p>
		      <p>Applications to <i>refinance</i> have more-than doubled since April but
		      they fell 5.2% last week. That's on the heels of double-digit increases
		      during the prior two weeks. Weekly applications to <i>purchase</i> a home
		      slipped 0.8% w/w. They're roughly 10% above the August low but still off
		      almost two-thirds versus before the recession.</p>
		      <p>The effective rate on fixed-interest, conventional 15-year mortgages
		      held near the record low at 3.60%. The effective rate on 30-year fixed
		      rate loans fell to a new low of 4.31%. On a 30-year Jumbo the effective
		      rate was 4.62%. Though it's narrowed slightly of late, the spread between
		      15- and 30-year loan rates continued wide by historical standards. The
		      effective interest rate on an adjustable 5-year mortgage ticked up to 3.17%
		      versus 3.65% at the beginning of the year.</p>
		      <p>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 covers roughly 50% of all U.S.
		      residential mortgage applications processed each week by mortgage banks,
		      commercial banks and thrifts. The figures for weekly mortgage applications
		      are available in Haver's <b>SURVEYW</b> database.</p>
		      
		      <p><a href="/comment/111005l_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111005l.png"></a>
	  		 <a href="/comment/111005m_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/111005m.png"></a></p>
		      
		    <table class="centered" border="0" cellSpacing="0" width="100%">
			<colgroup><col><col><col><col><col><col><col><col></colgroup>
			<thead>
					<tr>
		            <th class="firstcol" scope="col">MBA Mortgage Applications (SA,
		              3/16/90=100)</th>
		            <th scope="col">9/30/11</th>
		            <th scope="col">9/23/11</th>
		            <th scope="col">9/16/11</th>
		            <th scope="col">Y/Y %</th>
		            <th scope="col">2010</th>
		            <th scope="col">2009</th>
		            <th scope="col">2008</th>
		          </tr>
		        </thead>
		        <tbody>
		          <tr>
		            <td class="firstcol">Total Market Index</td>
		            <td>734.9</td>
		            <td>767.9</td>
		            <td>702.7</td>
		            <td>-6.1</td>
		            <td>659.3</td>
		            <td>736.4</td>
		            <td>642.9</td>
		          </tr>
		          <tr class="odd">
		            <td class="firstcol">&nbsp;Purchase</td>
		            <td>175.2</td>
		            <td>176.6</td>
		            <td>172.2</td>
		            <td>-11.8</td>
		            <td>199.8</td>
		            <td>263.5</td>
		            <td>345.4</td>
		          </tr>
		          <tr>
		            <td class="firstcol">&nbsp;Refinancing</td>
		            <td>4,019.0</td>
		            <td>4,239.6</td>
		            <td>3,813.2</td>
		            <td>-3.9</td>
		            <td>3,348.1</td>
		            <td>3,509.2</td>
		            <td>2,394.1</td>
		          </tr>
		          <tr class="odd">
		            <td class="firstcol">15-Year Mortgage Effective Interest Rate (%)</td>
		            <td>3.60</td>
		            <td>3.58</td>
		            <td>3.57</td>
		            <td>4.15<br>
		              (9/10)</td>
		            <td>4.39</td>
		            <td>4.85</td>
		            <td>5.88</td>
		          </tr>
		        </tbody>
		      </table>
		      </span>
</body></html>

The index of total mortgage applications fell 4.3% last week to 734.0 (March 16, 1990 = 100). Despite the decline, applications rose slightly for the full month. Overall, applications have risen more-than 80% since their early-year [...]

U.S. Mortgage Applications Slip W/W But Rise M/M

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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Michael J. Moran

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The Producer Price Index rose 0.5% in December, exceeding both the expected increase of 0.2% and the average advance of 0.3% in the prior six months. However, a surge of 0.7% in the service category accounted for much of the increase. The service component often moves erratically, and thus the sizeable increase in the headline index is not especially troubling. Within services, trade services are especially volatile, and prices here jumped 1.7% in December. Lower prices of food and energy (-0.3% and -1.4%, respectively) offset some of the pressure in the service area.

Prices of goods excluding food and energy, a grouping that shows less volatility than the food, energy, and service areas, rose 0.4% in December. The increase exceeded the average of 0.3% in the prior six months, but goods destined for export pushed the measure higher, jumping 0.7%. Goods intended for the domestic market (consumers, businesses, governments) saw price increases close to the recent average of 0.3%.

While the latest report on producer prices showed several notable shifts, underlying trends were little changed. The year-over-year increase in final-demand prices (the headline measure in this report) totaled 3.0% in December, a reading comfortably within the range evident since mid-2024 (chart, above left). The year-over-year increases in the goods and services categories changed only marginally: slightly higher for services and a tad lower for goods (chart, above right).

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The monthly report on the PPI also includes prices on intermediate goods and services, which might provide insight into final prices in coming months. The service category has been moving along a steady path, with year-over-year changes running in a range of approximately 1.5% to 2.5%. Prices of intermediate goods have been trending upward, moving from deflation during much of 2023-24 to an average year-over-year increase of approximately 3.5% in the past four months.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s **USECON** database. Further detail is contained in **PPI** and **PPIR**. The expectations figures are available in the **AS1REPNA** database.

- Prices of food and energy declined in December, but service prices surged.
- Prices of goods excluding food and energy rose more than the recent average, but the change did little damage to the underlying trend.

December PPI: Marked Shifts in Volatile Areas; Underlying Trends Steady

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GDP in the European Monetary Union rose by 1.3% at an annual rate quarter-to-quarter in the fourth quarter of 2025. This is a step up from 1.1% in the third quarter and from 0.6% in the second quarter. Year-over-year growth in the monetary union slowed to 1.3% in the fourth quarter compared to 1.4% in the third quarter and 1.5% in the second quarter; however, GDP growth is holding up well, and the quarterly profile suggests that the current growth rate is solid.

**Early-stage GDP reporters**
At this early stage, only seven countries have reported publicly GDP figures, and we see them in the table. Among them, the strongest growth rate in the fourth quarter is from Portugal at 3.2%, followed by Spain at 3.1%, and then the Netherlands at 2.1%; the weakest growth rate reported in the table is from France at 0.7% at an annual rate in Q4.

**Quarterly acceleration/deceleration**
In the fourth quarter with GDP measured quarter to quarter, GDP has accelerated in the monetary union from 1.1% in Q3 to 1.3% in Q4. At the country level, there are accelerations in Germany, Italy, Portugal, and Spain; the Netherlands logs the same growth rate in Q3 as in Q4 at 2.1%. Belgium and France log slowdowns, with Belgian growth posting a 0.8% annual rate in Q4 compared to 1.0% in Q3 and with France at 0.7% in Q4 compared to 2.1% in Q3.

**Year-on-year trends**
Year-over-year trends are different from this, however. On a year-over-year basis, the monetary union shows slightly slower growth at 1.3% in Q4 compared to 1.4% in Q3. Accelerating comparisons show Belgium, France, Germany, Italy, and the Netherlands all on rising growth rate profiles for year-on-year growth. Growth slows quarter-to-quarter in Portugal and in Spain.

**Growth in historic context**
The year-on-year growth rate overall ranked on data back to 1997 shows only Italy and Portugal with rates of growth above their respective medians for the period (back to 1997). Italy's growth rate has a 55.4 percentile standing, the same as for Portugal. Spain’s 48.9 percentile standing places its growth rate near its median, while the other countries produce growth rates largely in the mid-30th to low 40th percentiles for this period.

**Large economy/small economy**
Comparing growth rates for the largest four economies to the rest of the monetary union, we have the large economies growing stronger quarter-to-quarter in the fourth quarter of 2025 at 1.4% compared to 1.2%; this is a reversal of the pattern that we saw in Q3 and Q2. In fact, the year over year growth rates show the four largest economies growing slower than the rest of the monetary union, for the last four quarters. In the fourth quarter, they have a 40.2 percentile standing on growth rates back to 1997 while the rest of the monetary union comes in very close to its median growth rate with a percentile standing at 48.9%. It doesn't appear that any particular part of the monetary union is doing especially well, but the smaller countries appear to be closer to normal than the larger countries where growth remains more significantly challenged than it has been over the last 30 years.

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Europe

EMU GDP Steps Up on the Quarter

Andrew Cates

**Global Growth Conditions**
Flash PMI readings for January 2026 point to a global growth backdrop that remains uneven, with notable differences across economies in both activity levels and recent momentum. Several economies, including the UK, Australia and Japan, are firmly in expansionary territory above the 50 threshold and have also recorded solid positive three-month gains, suggesting some strengthening in activity entering the new year. The euro area and Germany are also comfortably above 50, indicating ongoing expansion, although recent momentum has been more subdued compared with some peers. France stands out as the main laggard, with the composite PMI still below the expansion threshold despite an improvement over the past three months. The US, meanwhile, has seen some softening in recent momentum even as activity remains in expansionary territory. India continues to post the strongest headline reading, though with little additional acceleration. Overall, the flash PMI data continue to portray a global economy that is expanding, but in a differentiated and uneven fashion rather than through a synchronised upswing.

260129Z1.jpg

**The US dollar**
Alongside the uneven global growth signals, financial markets have also begun to reflect a shifting pattern in demand for US assets. The chart below shows a notable depreciation in the broad nominal effective exchange rate of the US dollar through the first half of 2025, followed by a period of relative stabilisation in the second half of the year and a more abrupt weakening at the start of 2026. While the earlier decline likely reflected narrowing growth and interest-rate differentials, the recent sharper move points more clearly to changing capital-flow dynamics and a partial erosion of the dollar’s safe-haven appeal. Although far from a disorderly adjustment, the renewed softness has revived discussion of a broader “sell America” theme, suggesting that geopolitical uncertainty and policy risk may now be playing a larger role in currency markets alongside traditional cyclical drivers.

260129Z2.jpg

**Consumer confidence in the US and Europe**
The recent depreciation in the US dollar has coincided with a marked relative weakness in US consumer confidence compared with other major economies. As the chart illustrates, this week’s data from the Conference Board revealed that US sentiment has fallen well below its long-run average and now sits at notably weaker levels than in both the euro area and the UK (based on normalised readings), where confidence has shown tentative signs of stabilisation. The deterioration in US readings appears less related to financial conditions and arguably more reflective of political uncertainty and a softening in labour-market perceptions.

260129Z3.jpg

**Financial markets and data surprises**
Despite the recent softness in the US dollar and signs of shifting capital flows, global equity markets have remained relatively upbeat, reflecting a still-supportive macro backdrop. As the chart illustrates, periods of stronger global growth surprises have tended to coincide with weaker inflation surprises, a combination that has historically been favourable for risk assets and has again been evident in recent months. This pattern tentatively points to an improving supply-side dynamic, where activity has been outperforming expectations without a corresponding resurgence in price pressures. One possible factor behind this development is the early impact of productivity-enhancing technologies, including artificial intelligence, which may be helping to lift growth while easing inflation constraints at the margin.

260129Z4.jpg

**The US economy and AI**
Hard data released this week also continue to point to robust demand for advanced technology products in the US economy. The latest durable goods orders figures showed further strength in new orders for computers and related products, reinforcing the upward trend evident over the past two years. At the same time, recent trade data highlight a sustained rise in US imports of information and communications equipment, suggesting that domestic investment demand is being complemented by strong inflows of high-tech capital goods. Together, these series underscore the resilience of technology-related spending, consistent with ongoing investment linked to digitalisation, cloud infrastructure and artificial intelligence.

260129Z5.jpg

**Industrial production in Taiwan**
The strength in US technology-related demand is also being echoed upstream in global supply chains, particularly in East Asia. As the chart shows, Taiwan’s industrial production has rebounded sharply over the past year, led by a pronounced acceleration in output of computers, electronic and optical products. Growth in electronic parts and components has likewise strengthened, outpacing the broader industrial sector and underscoring the central role of the semiconductor and advanced electronics cycle in the current upturn. This pickup aligns closely with the robust US orders and import data discussed above, suggesting that strong end-demand for high-tech equipment is translating into rising production across key manufacturing hubs.

260129Z6.jpg

Financial markets have seen renewed gyrations in recent weeks, with a weaker US dollar, higher interest rate volatility and shifting capital flows reviving discussion of a “Sell America” narrative — so far more a marginal rebalancing than a wholesale retreat. The Federal Open Market Committee left the federal funds rate unchanged at its latest meeting, as widely expected, but communications around the outlook for future easing were arguably a little more hawkish than anticipated, reinforcing a cautious and increasingly data-dependent policy stance. In our charts this week we begin with January’s flash PMIs, which point to ongoing expansion across most major economies but with clear cross-country divergence in momentum (chart 1). That uneven real-economy picture has been mirrored in FX: the broad trade-weighted dollar depreciated through the first half of 2025, stabilised later in the year, but has now softened more abruptly at the start of 2026—suggesting a shift in risk premia and capital-flow dynamics (chart 2). Consistent with that, consumer confidence has weakened noticeably in the US relative to the euro area and UK, with the deterioration looking more tied to politics and labour-market perceptions (chart 3). Even so, global equity sentiment has remained comparatively upbeat, supported by a still-favourable macro mix in which global growth surprises have tended to run ahead of expectations while inflation surprises have been softer—tentatively consistent with an improving supply-side backdrop that markets increasingly associate with AI (chart 4). Finally, that theme is reinforced by hard activity indicators: US orders and imports of advanced technology products remain strong (chart 5), and Taiwan’s production data show a parallel surge in electronics output upstream (chart 6), pointing to a still-powerful global tech cycle even as broader macro and market narratives become more unsettled.

<iframe data-testid="embed-iframe" style="border-radius:12px" src="https://open.spotify.com/embed/episode/2FKXRVvfK3GZgt4d2aDAZY?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Weaker Dollar, Stronger Tech

Winnie Tapasanun

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Total factory orders rose a more-than-expected 2.7% m/m in November after a 1.2% drop in October and a 0.2% increase in September, data from the U.S. Census Bureau showed. November registered the third m/m rise in four months following m/m declines in July and June. The Action Economics Forecast Survey had expected a 0.6% m/m November increase. The year-on-year growth rate accelerated to 5.4% in November, the fastest pace since June, up from 2.3% in October and -0.9% in November 2024, while remaining well below a peak of 39.6% in April 2021. Notably, orders for nondefense aircraft & parts surged 97.6% m/m in November after falling 17.9% in October and 6.8% in September. Factory orders excluding defense rebounded 3.2% (5.3% y/y), the first m/m increase since August, after a 0.8% October decline. Factory orders excluding the transportation sector grew 0.2% (1.0% y/y), the second m/m increase in three months, after a 0.1% October easing.

Durable goods orders rose 5.3% (12.3% y/y) in November, up for the third time in four months, following a 2.1% decline in October (matching +5.3% m/m in the advance report on January 26). The November rise reflected m/m increases across nearly all major categories, led by a 14.7% rebound in transportation equipment (the third m/m rise in four months and the largest since May; +29.1% y/y), followed by increases of 1.0% (6.0% y/y) in electrical equipment, appliances & components, 0.9% (5.2% y/y) in fabricated metal products, 0.4% (1.4% y/y) in furniture & related products, 0.3% (7.7% y/y) in machinery, and 0.1% (4.4% y/y) in primary metals. Meanwhile, orders for computers & electronic products were virtually unchanged (+5.1% y/y) after two consecutive m/m rises.

Nondurable goods orders, which equal nondurable goods shipments, held steady (-1.3% y/y) in November following a 0.3% decline in October. The flat November reading reflected m/m increases of 5.0% (-9.3% y/y) in leather & allied products, 0.8% (3.6% y/y) in chemical products, 0.5% (-1.5% y/y) in textile mills, 0.3% (1.3% y/y) in apparel, 0.3% (-0.4% y/y) in printing, 0.2% (0.3% y/y) in paper products, and 0.2% (0.6% y/y) in plastics & rubber products. To the downside, the following nondurable goods shipments declined m/m in November: textile products (-1.7%; -0.1% y/y), petroleum & coal products (-1.1%; -12.2% y/y), beverage & tobacco products (-0.6%; +3.8% y/y), and food products (-0.1%; -0.3% y/y).

Total shipments dipped 0.1% (+2.1% y/y) in November following a 0.1% uptick in October and two successive m/m declines. Excluding transportation, shipments rose 0.2% (0.6% y/y), the second m/m rise in three months, after a 0.1% October dip. Shipments of durable goods industries fell 0.3% (+5.6% y/y), the first m/m fall since August, after a 0.5% October increase. This reflected m/m durable goods shipments declines of 1.7% (+10.3% y/y) in transportation equipment, 0.1% (+3.7% y/y) in primary metals, and 0.1% (-3.3% y/y) in wood products. In contrast, the following durable goods shipments rose m/m in November: furniture & related products (1.3%; 2.6% y/y), computers & electronic products (0.9%; 4.9% y/y), fabricated metal products (0.9%; 3.5% y/y), miscellaneous durable goods (0.6%; 2.6% y/y), nonmetallic mineral products (0.5%; 1.0% y/y), and machinery (0.2%; 5.8% y/y). Meanwhile, durable goods shipments for electrical equipment, appliances & components were essentially unchanged (4.2% y/y) in November after five straight m/m rises.

Unfilled orders advanced 1.4% (9.3% y/y) in November, the largest of four consecutive m/m gains, on top of a 0.2% increase in October. Excluding transportation, unfilled orders rose 0.3% (1.3% y/y), up for the fourth straight month, after a 0.3% October rise. Backlogs of durable goods increased 1.4% (9.3% y/y) in November, led by m/m gains of 2.0% (14.7% y/y) in transportation equipment and 0.7% (3.0% y/y) in electrical equipment, appliances & components, partially offset by a 0.1% decline (-0.8% y/y) in computers & electronic products.

Inventories edged up 0.1% (1.1% y/y) in November after holding steady in October and declining 0.1% in both September and August. Excluding transportation, inventories ticked up 0.1% (1.2% y/y), the sixth m/m increase in seven months, after no change in October. Durable goods inventories rose 0.2% (1.5% y/y) following a 0.2% October rise and two successive 0.1% declines, while nondurable goods inventories inched up 0.1% (0.3% y/y) after a 0.2% October decrease.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

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- Factory orders +2.7% m/m in Nov.; +5.4% y/y, largest y/y increase since June.
- Durable goods +5.3% m/m; nondurable goods orders flat; shipments marginally down.
- Transportation orders +14.7% m/m, led by a 97.6% surge in nondefense aircraft orders.
- Unfilled orders +1.4%, biggest of four straight m/m gains.
- Inventories +0.1% after October’s flat reading.

U.S. Factory Orders Rebound in November; Third M/M Gain in Four Months

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Revised data show no adjustment to the initial estimate of 4.9% growth in labor productivity during the third quarter (nonfarm business sector). This strong showing reflected a robust advance in output (5.4%) with little increase in labor input (0.5%).

Productivity figures often swing widely from quarter-to-quarter, and thus, quarterly observations should be interpreted cautiously. In this case, though, the strong results continued a pattern of generally firm increases that have been evident since late 2022. In the chart above, the 8-quarter moving average (to smooth volatility) shows stronger results than those seem before the pandemic. Average compound productivity growth from the end of 2022 to the present totaled 2.6%, up considerably from the average of 1.1 percent in the 2013-18 period.

The chart shows a jump in productivity in 2020-21. However, this gain probably reflects emergency measures adopted by businesses to survive during the Covid pandemic rather than genuine gains in efficiency, although lessons might have been learned that added momentum in subsequent quarters.

Productivity is a key factor in an economy’s inflation environment, as healthy efficiency gains allow businesses to absorb labor costs without raising prices. With strong gains in productivity, unit labor costs (labor compensation adjusted for productivity) have settled recently. Indeed, unit labor costs have declined in the past two quarters and the latest reading on the 8-quarter moving average totaled only 1.8%, easily consistent with the Federal Reserve’s inflation target of 2.0%.

The productivity and labor cost data are available in Haver’s **USECON** database. The Action Economics expectations figures are in the **AS1REPNA** database.

- Strong growth in output with little increase in labor input reinforced a firm underlying trend in productivity.
- Efficiency gains in Q3 more than offset growth in labor compensation.

Economy in Brief: 2011

Jump to:

U.S. Small Business Optimism Stabilizes

August Industrial Production In The Euro-Area

U.S. Consumer Credit Extension Pulls Back

U.S. Nonfarm Payrolls' Modest Rise Aided By Strike's End

U.S. Weekly Initial Claims for Jobless Insurance Tick Higher But Trend Sideways

German Order Growth Spirals Lower

U.S. Weekly Initial Claims for Jobless Insurance Tick Higher But Trend Sideways

U.S. Mortgage Applications Slip W/W But Rise M/M