Gerald D. Cohen

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The Conference Board's Composite Index of Leading Economic Indicators declined 0.1% (+2.1% year-on-year) during December following an unrevised 0.2% gain in November. The Action Economics Forecast Survey expected a 0.1% decrease. The series is comprised of 10 components which tend to precede changes in the overall economy. As a result of the government shutdown two of the components of the index – new orders for consumer goods and materials as well as building permits – are not available for December, thus the Conference Board forecast these series. Moreover, a third component, nondefense capital goods orders is based on preliminary November data. Given this, there is a high likelihood of a revision to the December reading of the Index of Leading Indicators. The Conference Board also postponed the regularly scheduled benchmark revisions of the composite indicators until all underlying data are available.

The drop in equities prices in December was the biggest contributor to the negative reading. Weakness in the ISM new orders index as well as building permits also drove the index lower. Lower claims, looser credit conditions, improved consumer expectations for business/economic conditions, a steeper yield curve and some strength in both measures of manufacturing orders made positive contributions. Three-month growth in the leading index fell at a 0.7% annual rate, the largest decline in almost three years.

The Index of Coincident Economic Indicators increased 0.2% (4.3% y/y) in December following an unrevised 0.2% gain during November. All of the index components – changes in personal income less transfer payments, industrial production, nonagricultural payroll employment and manufacturing & trade sales – made positive contributions. Three-month growth in the coincident index increased at a 2.3% annual pace, in line with recent trends.

The Index of Lagging Economic Indicators increased 0.5% last month (2.8% y/y) following upwardly revised 0.5% growth in November. Strength in commercial & industrial loans outstanding and the six-month growth in the services CPI drove the majority of the gain. The average duration of unemployment was the only negative contributor. The three-month growth in the lagging index jumped at 6.2% annual rate, the fastest pace in six years.

The Conference Board figures are available in Haver's BCI database;
the components are available there, and most are also in USECON. The
expectations are in the AS1REPNA database. Visit the Conference Board's
<a href="http://www.conference-board.org/">site</a> for coverage of leading
indicator series from around the world.

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<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" >Business Cycle Indicators (%)</th>
 <th scope="col" >Dec</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Dec Y/Y</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Leading</td>
 <td >-0.1</td>
 <td >0.2</td>
 <td >-0.3</td>
 <td >2.1</td>
 <td >5.9</td>
 <td >4.1</td>
 <td >1.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Coincident</td>
 <td >0.2</td>
 <td >0.2</td>
 <td >0.2</td>
 <td >4.3</td>
 <td >2.2</td>
 <td >1.8</td>
 <td >1.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Lagging</td>
 <td >0.5</td>
 <td >0.5</td>
 <td >0.6</td>
 <td >2.8</td>
 <td >2.5</td>
 <td >2.6</td>
 <td >2.9</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The Conference Board's Composite Index of Leading Economic Indicators declined 0.1% (+2.1% year-on-year) during December following an unrevised 0.2% gain in November. The Action Economics Forecast Survey expected a 0.1% decrease. The [...]

U.S. Leading Economic Indicators Decrease

Robert Brusca

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	 Global Growth Crawls on Its Belly 
 
 
 
 

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The EMU PMI composite index is at a 66-month low. The EMU diffusion reading, as well as each sector reading for manufacturing and services, has a value of 50 plus ‘change’. A value of 50 in diffusion terms marks a sector as dead in the water, output neutral, zero growth. And the EMU is perilously close to being that right now across the board.

Country by country from weakness to moderation 
France posts a composite reading below 50, a reading that has been affected by its ongoing ‘Yellow Vest’ protests that has also sapped strength from the Macron government. France shows some industrial expansion (reading of 51.2 for manufacturing), but the service sector reading at a diffusion value of 47.5 is very weak and shows sector contraction for the second month in a row.

Germany manages to log an overall expansion with a reading of 52.1 on its composite. But that is still a low point for the past five years. German manufacturing is showing the smallest of contractions with a sector reading of 49.9. German services with a reading at 53.1 is still expanding, but in the lower 10% of all readings in the past five years. That is not exactly a tour-de-force of strength.

Japan’s manufacturing sector also plunged to dead neutral in January. It is in the lower 14% of all reading over the past five years.

The United States shows a more strength but not much momentum. And while the U.S. queue percentile ranks are much higher than in Europe or Japan, the U.S. composite reading is below its four-year median and that has only produced growth of 2.3%.



Response to weakness-stay the course, cross the fingers 
Central bankers in the U.K. and Japan have just met and their decisions have been to stay the course. Policy is not reacting to the new news of weaker economic signals. Only in the U.S. where the Fed has been actively raising rates since end-2015 has the central bank engaged in anything like a policy change by seeming to have adopted a flatter rate profile for the period ahead than the one it had preciously endorsed for most of last year. Various policymakers in the U.S. also suggest that the Fed could be willing to sit on the sidelines for some time. But in the EMU and Japan, rates are still exceptionally low. The ECB has terminated its asset purchase program and so its policy of ‘unchanged’ means it is sticking with the less stimulative policy that previously was adopted.

Central bankers not recoveries die of old age 
Central bankers are wary of the economy since recovery has been in train for some time and current growth signals are less vibrant. Policymakers are fond of saying that recoveries do not simply die of old age. In an interview in the U.S. recently, former Fed Chair Ben Bernanke wryly noted that recoveries do not die of old age rather central banks more commonly murdered them. So in the U.S., the Fed has backed off its past path of rate hikes. That backing off has allowed markets to recover and slow the flattening of the yield curve that had really gone into overdrive around yearend. In Japan and the EMU, policies are simply staying put and market reactions to actions are muted as the bankers have done what markets expected...mark time.

Praying for deliverance instead of policy that delivers 
Central bankers are hoping that this fit of weakness will pass. Interest rate levels in Japan and the EMU already are extremely low. Bankers do not want to be put in a position of having to create new stimulus under these conditions. And the current weakness is still more like growth moderation and does not necessarily require action. Although I dare say, if rate levels were higher and conditions are weak enough, it is likely that we would be seeing some central banking response. But bankers now simply lack the flexibility to act. The fact is that the ‘heights’ of growth are not as high as they once were, leading GDP and other metrics to drift more commonly and to languish in the low-growth portions of their ranges and that always makes for some nervousness.

Are we lacking shocks? 
It is not as if the global economy is devoid of shocks, or their potential, an important thing to remember since it is often said that it takes some sort of jolt or shock to create a recession. In the New Year, Italian banks have been in the news in a bad way. The U.K. is still trying to come to grips with Brexit and despite all the negotiations it is not clear that it is any closer to a real decision be it hard Brexit or not or even a new referendum for the masses. There is the potential for a shock there. Debt levels have crept up globally. And while all eyes are on China, its debt levels are so high that debt is no longer as effective a prod for growth as it once was. China currently is laboring under tariffs imposed by the U.S. and negotiations between the US and China are under the pressure of a deadline and the threat of even greater tariffs. While President Trump has just said that U.S.-China trade negotiations are going well, Commerce Secretary Wilbur Ross has just noted that the U.S. and China are ‘miles apart’ to use his phrase. When/if the U.S. and China get a deal, the U.S. and the EU have negotiations and it seems clear that judging from how the EU treated the UK, the EU is not of much of a mind to bend very much on trade but that remains to be seen.

Kicking the tires on global growth and recession prospects 
On balance, the global economy has decelerated. The IMF has trimmed its outlook, but shaving a few tenths of a percentage point off of annual growth rate forecast is not a draconian thing; it is more of a signal than an event per se. The IMF is warning us where the risks lie – just in case we have not figured it out for ourselves. We all know that economies too quickly and easily seem to slip from performing what seems like ‘well’ into an unexpected recession – since nearly every recession is unexpected. Still, there are usually events before recessions like central banks hiking rates (check, in the U.S.) or engaging in other administrative tightening (check U.S. and ECB balance sheets; China has gone the other way to ease reserve requirements again). Markets usually get out ahead of recessions with some sort of kerfuffle (check equity markets; check flattening yield curve in the U.S.). No, the U.S. yield curve has not turned on its very reliable inversion signal, but that switch is not far from being flipped. It could be switch on in the period of less than a week were conditions to sour. So, on balance, I would warn that while recoveries do not die of old age, this one is showing some of the signs of diminished health. And while the Fed has not clearly killed it, the Fed has clearly been at least kicking it in the shins. Now some counter-argue that interest rates are still historically low. But so is inflation and so has been growth. Global trade tensions are historically high as are geopolitical tensions. There is plenty in the pot to make something good to stew over. So let’s not folderol around and pretend everything is fine when we know it is not. This may not be a spot so tight that we need the Great Houdini to get out of it, but we do need for policymakers to get a few a things right and to avoid making some crucial mistakes. My reading is that policymakers in the U.S., the U.K. and the EMU are divided over their respective ‘domestic’ issues let alone over issues where they need to meet and strike a bargain with another nondomestic entity. And I am suspicious of the state of uniformity on policy within China- always more of a black-box. So let’s all have a healthy respect for the risk. You can ‘forget’ the Federal Reserve’s assessment that risks are balanced- that is more foolishness than I have time to dispel here.

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The EMU PMI composite index is at a 66-month low. The EMU diffusion reading, as well as each sector reading for manufacturing and services, has a value of 50 plus ‘change’. A value of 50 in diffusion terms marks a sector as dead in [...]

EMU PMI Readings Scrape 66-Month Low

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The Conference Board's Composite Index of Leading Economic Indicators declined 0.1% (+2.1% year-on-year) during December following an unrevised 0.2% gain in November. The Action Economics Forecast Survey expected a 0.1% decrease. The series is comprised of 10 components which tend to precede changes in the overall economy. As a result of the government shutdown two of the components of the index -- new orders for consumer goods and materials as well as building permits -- are not available for December, thus the Conference Board forecast these series. Moreover, a third component, nondefense capital goods orders is based on preliminary November data. Given this, there is a high likelihood of a revision to the December reading of the Index of Leading Indicators. The Conference Board also postponed the regularly scheduled benchmark revisions of the composite indicators until all underlying data are available.

The drop in equities prices in December was the biggest contributor to the negative reading. Weakness in the ISM new orders index as well as building permits also drove the index lower. Lower claims, looser credit conditions, improved consumer expectations for business/economic conditions, a steeper yield curve and some strength in both measures of manufacturing orders made positive contributions. Three-month growth in the leading index fell at a 0.7% annual rate, the largest decline in almost three years.

The Index of Coincident Economic Indicators increased 0.2% (4.3% y/y) in December following an unrevised 0.2% gain during November. All of the index components -- changes in personal income less transfer payments, industrial production, nonagricultural payroll employment and manufacturing & trade sales -- made positive contributions. Three-month growth in the coincident index increased at a 2.3% annual pace, in line with recent trends.

The Index of Lagging Economic Indicators increased 0.5% last month (2.8% y/y) following upwardly revised 0.5% growth in November. Strength in commercial & industrial loans outstanding and the six-month growth in the services CPI drove the majority of the gain. The average duration of unemployment was the only negative contributor. The three-month growth in the lagging index jumped at 6.2% annual rate, the fastest pace in six years.

The Conference Board figures are available in Haver's BCI database;
the components are available there, and most are also in USECON. The
expectations are in the AS1REPNA database. Visit the Conference Board's
<a href="http://www.conference-board.org/">site</a> for coverage of leading
indicator series from around the world.

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<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" >Business Cycle Indicators (%)</th>
 <th scope="col" >Dec</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Dec Y/Y</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Leading</td>
 <td >-0.1</td>
 <td >0.2</td>
 <td >-0.3</td>
 <td >2.1</td>
 <td >5.9</td>
 <td >4.1</td>
 <td >1.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Coincident</td>
 <td >0.2</td>
 <td >0.2</td>
 <td >0.2</td>
 <td >4.3</td>
 <td >2.2</td>
 <td >1.8</td>
 <td >1.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Lagging</td>
 <td >0.5</td>
 <td >0.5</td>
 <td >0.6</td>
 <td >2.8</td>
 <td >2.5</td>
 <td >2.6</td>
 <td >2.9</td>
 </tr>
 </tbody>
 </table>
 
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Sandy Batten

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Initial claims for jobless insurance unexpectedly fell to 199,000 in week ended January 19 from a downwardly revised 212,000 in the previous week. The Action Economics Forecast Survey expected 216,000 claims. This is the lowest reading on claims since November 1969 when the labor force was half its current size. The four-week moving average slipped to 215,000 from 220,500. During the last ten years, there has been a -73% correlation between the level of initial claims and the m/m change in nonfarm payrolls.

Continuing claims for unemployment insurance fell to 1.713 million in the week ended January 12 from 1.737 million the previous week. The four-week moving average of continuing claims edged up to 1.730 million from 1.729 million. This is the highest reading since mid-August of last year.

How has the federal government shutdown impacted these figures? Not likely very much directly. There could be some indirect effect as employees of government contractors that have been furloughed by the shutdown apply for benefits. The initial claims figures are reports from state-run programs. Unemployed federal government employees would apply for benefits from federal programs, not the programs included in these headline figures. However, the initial claims report contains not seasonally adjusted information on these federal unemployment insurance programs with a one week lag. In the week ended January 12, 25,419 federal employees filed for unemployment benefits, up from 1,658 in the same week a year ago. On average, around 800-1000 federal employees apply for unemployment benefits each week. The current shutdown is partial. So, not all federal employees are eligible to apply for benefits.

The insured unemployment rate held steady at 1.2% in the week ended January 12, after hitting a record low of 1.1% last November. The figure compares the number of people receiving benefits to the number covered by unemployment insurance.

Insured unemployment rates vary widely by state. During the week ending January 5, the lowest rates were in Florida (0.47%), North Carolina (0.49%), Tennessee (0.65%) and Virginia (0.66%). The highest rates were in Higher rates were in Alaska (3.46%), New Jersey (2.78%), Connecticut (2.66%) and Pennsylvania (2.60%). The state data are not seasonally adjusted.

Data on weekly unemployment claims going back to 1967 are
contained in Haver's WEEKLY database and are summarized monthly in USECON.
Data for individual states are in REGIONW. The expectations figure is from the
Action Economics Forecast Survey, carried in the AS1REPNA database.

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" >Unemployment Insurance (SA, 000s)</th>
 <th>01/19/19</th>
 <th>01/12/19</th>
 <th>01/05/19</th>
 <th>Y/Y %</th>
 <th>2018</th>
 <th>2017</th>
 <th>2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Initial Claims</td>
 <td >199</td>
 <td >212</td>
 <td >216</td>
 <td >-13.1</td>
 <td >221</td>
 <td >243</td>
 <td >264</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Continuing Claims</td>
 <td >--</td>
 <td >1,713</td>
 <td >1,737</td>
 <td >-10.9</td>
 <td >1,763</td>
 <td >1,964</td>
 <td >2,143</td>
 </tr>
 <tr>
 <td class="firstcol" >Insured Unemployment Rate (%)</td>
 <td >--</td>
 <td >1.2</td>
 <td >1.2</td>
 <td >
 1.4 
 (Jan. 2018)
 </td>
 <td >1.2</td>
 <td >1.4</td>
 <td >1.6</td>
 </tr>
 </tbody>
 </table>
 
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Initial claims for jobless insurance unexpectedly fell to 199,000 in week ended January 19 from a downwardly revised 212,000 in the previous week. The Action Economics Forecast Survey expected 216,000 claims. This is the lowest [...]

U.S. Initial Unemployment Insurance Claims Fell to 50-Year Low

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Gasoline prices averaged a fairly steady $2.25 per gallon this past
week (-12.1% y/y)........




These data are reported by the U.S. Department of Energy. The
price data can be found in Haver's WEEKLY and DAILY databases.
Greater detail on prices, as well as the demand, production and inventory data,
along with regional breakdowns, are in OILWKLY.

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<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" >Weekly Energy Prices</th>
 <th scope="col" >01/21/19</th>
 <th scope="col" >01/14/19</th>
 <th scope="col" >01/07/19</th>
 <th scope="col" >Y/Y %</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Retail Gasoline ($ per Gallon Regular, Monday Price,
 End of Period)</td>
 <td >2.25</td>
 <td >2.25</td>
 <td >2.24</td>
 <td >-12.3</td>
 <td >2.27</td>
 <td >2.47</td>
 <td >2.31</td>
 </tr>
 <tr>
 <td class="firstcol" >Light Sweet Crude Oil, WTI ($ per bbl,
 Previous Week's Average)</td>
 <td >52.06</td>
 <td >50.85</td>
 <td >46.70</td>
 <td >-18.4</td>
 <td >64.95</td>
 <td >50.87</td>
 <td >43.22</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Natural Gas ($/mmbtu, LA, Previous
 Week's Average)</td>
 <td >3.50</td>
 <td >2.89</td>
 <td >2.92</td>
 <td >-15.3</td>
 <td >3.18</td>
 <td >2.99</td>
 <td >2.51</td>
 </tr>
 </tbody>
 </table>
 
</html>

Gasoline prices averaged a fairly steady $2.25 per gallon this past week (-12.1% y/y)........ These data are reported by the U.S. Department of Energy. The price data can be found in Haver's WEEKLY and DAILY databases. Greater detail [...]

U.S. Prices of Energy Products Are Mixed

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The Federal Housing Finance Agency (FHFA) Price Index for house purchases rose 0.3% (5.7% y/y) during October following a 0.2% September rise.





The FHFA house price index is a weighted purchase-only index that measures
average price changes in repeat sales of the same property. An associated quarterly index includes
refinancings on the same kinds of properties. The indexes are based on transactions involving
conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
Only mortgage transactions on single-family properties are included. The FHFA data are available
in Haver's USECON database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" >FHFA U.S. House Price Index, 
 Purchase Only (SA %)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >0.4</td>
 <td >0.4</td>
 <td >0.3</td>
 <td >5.8</td>
 <td >6.7</td>
 <td >6.1</td>
 <td >5.4</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; New England</td>
 <td >0.2</td>
 <td >1.0</td>
 <td >0.3</td>
 <td >5.3</td>
 <td >5.9</td>
 <td >4.1</td>
 <td >3.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Middle Atlantic</td>
 <td >1.0</td>
 <td >-0.0</td>
 <td >0.4</td>
 <td >4.8</td>
 <td >4.9</td>
 <td >3.7</td>
 <td >2.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; East North Central</td>
 <td >-0.2</td>
 <td >0.6</td>
 <td >0.7</td>
 <td >5.7</td>
 <td >6.1</td>
 <td >5.4</td>
 <td >4.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West North Central</td>
 <td >-0.1</td>
 <td >1.1</td>
 <td >-0.1</td>
 <td >5.6</td>
 <td >5.4</td>
 <td >5.6</td>
 <td >4.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; South Atlantic</td>
 <td >1.1</td>
 <td >-0.3</td>
 <td >0.4</td>
 <td >6.7</td>
 <td >7.0</td>
 <td >7.0</td>
 <td >6.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; East South Central</td>
 <td >0.9</td>
 <td >0.8</td>
 <td >0.3</td>
 <td >7.3</td>
 <td >5.9</td>
 <td >5.1</td>
 <td >4.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West South Central</td>
 <td >1.0</td>
 <td >0.1</td>
 <td >0.3</td>
 <td >4.5</td>
 <td >6.5</td>
 <td >5.8</td>
 <td >6.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Mountain</td>
 <td >0.2</td>
 <td >0.2</td>
 <td >1.1</td>
 <td >7.4</td>
 <td >8.8</td>
 <td >7.9</td>
 <td >7.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Pacific</td>
 <td >-0.8</td>
 <td >1.2</td>
 <td >-0.7</td>
 <td >4.8</td>
 <td >8.7</td>
 <td >8.0</td>
 <td >7.7</td>
 </tr>
 </tbody>
</table>
&nbsp;

 
 
 
 
 New England: Maine, New Hampshire, Vermont,
 Massachusetts, Rhode Island and Connecticut. 
 Middle Atlantic: New York, New Jersey and Pennsylvania. 
 East North Central: Michigan, Wisconsin, Illinois, Indiana and Ohio. 
 West North Central: North Dakota, South Dakota, Minnesota, Nebraska,
 Iowa, Kansas and Missouri. 
 South Atlantic: Delaware, Maryland, D.C., Virginia, West Virginia,
 North Carolina, South Carolina, Georgia and Florida. 
 East South Central: Kentucky, Tennessee, Mississippi and Alabama. 
 West South Central: Oklahoma, Arkansas, Texas and Louisiana. 
 Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and
 New Mexico. 
 Pacific: Alaska, California, Hawaii, Oregon, Washington.
 
 
 
 
</html>

The Federal Housing Finance Agency (FHFA) Price Index for house purchases rose 0.3% (5.7% y/y) during October following a 0.2% September rise. The FHFA house price index is a weighted purchase-only index that measures average price [...]

U.S. FHFA House Prices Post Solid Increase in November

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Trade headlines 
Japan logged a deficit on its trade account of 184 billion yen in Decmber, its sixth deficit in a row and seventh in the last eight months. As the averages show, Japan's trade position has been in deficit over 12 months, over six months and over three months and the average deficit has been getting progressively larger. It has grown from 85 billion yen over 12 months to an average of 323 billion yen over three months. Even so, December's deficit is the smallest posted in the last five months.

Nominal trade trends 
Japan's exports and imports each are falling for two months in a row. In December, exports fell by 1.3% and saw that drop exceeded by a 5.3% fall in imports. It is the relatively larger drop in imports that is responsible for the smaller deficit logged on the December trade account.

Over 12 months, Japan's exports now are falling by 2.3%. Imports are up over 12 months but only by 0.6%. Over the past year, the yen has risen by a small amount vs. the dollar while the real broad yen exchange rate has been very stable as well and has risen slightly. Exchange rate changes are not a big part of the change in Japan's trade picture recently.

Export and import prices and real flows 
Over the past year, Japan's export prices have been hammered lower. Japan's import prices are up by 3.4% over 12 months. Using these prices to adjust nominal yen trade flows and convert them to real flows changes the picture. Real exports rose in December, but that still did not offset their drop in November; thus, exports are still lower on balance over two months. Imports in real terms were flat in November and up by 0.7% in December, gaining slightly on balance over two months. Year-over-year both export and import volumes are lower with imports down by 2.7% and exports lower by 1.1%.

What trade tells us 
Japan's trade flows clearly are slow-moving and the weaker import volumes over 12 months actually help to plow some growth back into the domestic economy. But that is a minor point. The main point is that the drop in imports tells us that domestic demand in Japan has been weak. Japan's largest trade partner is China with the U.S. in second place. China is slowing and some of the Chinese data have just begun to deteriorate sharply at the end of 2018. There could be more negative transmission to Japan.


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Japan and the policy cycle 
The BOJ has just met and is holding the line on policy. We are expecting the ECB to hold the line in its Thursday meeting. With Brexit uncertainty, and a real possibility of a jolting hard-Brexit, the BOE should hold the line as well. In the U.S., the Fed already has essentially said it was going to back off for a while. The IMF has cut its global growth forecast. China reported weak GDP for end-2018. The IMF in its outlook made some of its deepest cuts in the outlook for Germany and the EMU. Meanwhile, in the U.S., economic signals have not been clear and have run hot and cold where we have them at all. With some of the U.S. government shutdown, many U.S. reports are not even being issued.

What we can ‘know' or at least guess 
Global trade flows clearly are slowing. The U.S.-China trade unrest is a reason for a lot of it. There is a March deadline for getting a U.S.-China deal and some in the Trump Administration have issued optimistic statements about prospects for a deal ‘on-time.' But U.S. President Donald Trump has said that he will not water down his demands to make a deadline. The U.S. wants some real promises, some deliverable ‘nuts and bolts' promises and hard benchmarks for progress instead of vague and unenforceable statements of intent. There is still this issue of China seeking technological dominance by 2025 and its past willingness to steal or force technology transfer. This negotiating approach uses the same sort of framework that the U.S. has taken with North Korea where talks also are upcoming over nuclear disarmament. We see the same tactics playing out the President's stance on the wall (genuflect) he wants build on the U.S. southern border as he has taken a long government shutdown to try to get what he wants. Putting all this together, it seems reasonable to assume that Trump will be a serious negotiator with China and he will be seeking to get some real and significant changes from China. That means that, despite all the effusive optimism, the March deadline might not be met especially if China misreads Trump and thinks it can bully him into accepting a weak deal to meet the deadline. As I see things, that would be a mistake on China's part. But China also has been known to play hard ball so I'm not very convinced that we should treat this March ‘deadline' date as a likely for a deal despite all the rhetoric about it. Until we have a U.S.-China trade deal, expect China to continue to be under pressure and to try to prop up its fading growth rate. It will continue to try to pull domestic levers on debt issuance and fiscal policy to stave off weakness. Japan will continue to be caught in this crossfire.


</html>

Trade headlines Japan logged a deficit on its trade account of 184 billion yen in Decmber, its sixth deficit in a row and seventh in the last eight months. As the averages show, Japan's trade position has been in deficit over 12 [...]

Japan Logs Another Trade Deficit

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The Federal Housing Finance Agency (FHFA) Price Index for house purchases rose a solid 0.4% m/m (5.8% y/y) in November following an upwardly revised 0.4% m/m increase in October (previously reported as +0.3% m/m). The 5.8% y/y rate of advance is the slowest since May 2016. Though prices increases have strengthened a bit recently, house price appreciation has eased noticeably over this year. In the most recent six months, the national index has increased at a 4.8% annual rate, down from the recent high of 8.6% at an annual rate in the six months ending in February 2018 but up from 4.3% posted in the six months ending in August 2018.

The moderation in prices in the national index over 2018 has generally been echoed across the nine major census regions. The most pronounced decelerations have been in the Pacific, Middle Atlantic, and West South Central regions. In November, prices in the Pacific regions fell 0.8% m/m (+4.8% y/y) while prices in the Middle Atlantic region recovered, jumping 1.0% m/m (4.8% y/y).

Joining the monthly decline in the Pacific region, prices in the East North Central and West North Central regions also fell in November, -0.2%m/m (+5.7% y/y) and -0.1% m/m (+5.6% y/y), respectively.

In contrast, prices jumped up 1.1% m/m (6.7% y/y) in the South Atlantic region and rose 1.0% m/m (4.5% y/y) in the West South Central region.

The FHFA house price index is a weighted purchase-only index that
measures average price changes in repeat sales of the same property. An associated quarterly
index includes refinancings on the same kinds of properties. The indexes are based on transactions
involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.
Only mortgage transactions on single-family properties are included. The FHFA data are available in
Haver's USECON database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" >FHFA U.S. House Price Index, 
 Purchase Only (SA %)</th>
 <th scope="col" >Nov</th>
 <th scope="col" >Oct</th>
 <th scope="col" >Sep</th>
 <th scope="col" >Nov Y/Y</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 <th scope="col" >2015</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >0.4</td>
 <td >0.4</td>
 <td >0.3</td>
 <td >5.8</td>
 <td >6.7</td>
 <td >6.1</td>
 <td >5.4</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; New England</td>
 <td >0.2</td>
 <td >1.0</td>
 <td >0.3</td>
 <td >5.3</td>
 <td >5.9</td>
 <td >4.1</td>
 <td >3.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Middle Atlantic</td>
 <td >1.0</td>
 <td >0.0</td>
 <td >0.4</td>
 <td >4.8</td>
 <td >4.9</td>
 <td >3.7</td>
 <td >2.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; East North Central</td>
 <td >-0.2</td>
 <td >0.6</td>
 <td >0.7</td>
 <td >5.7</td>
 <td >6.1</td>
 <td >5.4</td>
 <td >4.3</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West North Central</td>
 <td >-0.1</td>
 <td >1.1</td>
 <td >-0.1</td>
 <td >5.6</td>
 <td >5.4</td>
 <td >5.6</td>
 <td >4.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; South Atlantic</td>
 <td >1.1</td>
 <td >-0.3</td>
 <td >0.4</td>
 <td >6.7</td>
 <td >7.0</td>
 <td >7.0</td>
 <td >6.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; East South Central</td>
 <td >0.9</td>
 <td >0.8</td>
 <td >0.3</td>
 <td >7.3</td>
 <td >5.9</td>
 <td >5.1</td>
 <td >4.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; West South Central</td>
 <td >1.0</td>
 <td >0.1</td>
 <td >0.3</td>
 <td >4.5</td>
 <td >6.5</td>
 <td >5.8</td>
 <td >6.2</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Mountain</td>
 <td >0.2</td>
 <td >0.2</td>
 <td >1.1</td>
 <td >7.4</td>
 <td >8.8</td>
 <td >7.9</td>
 <td >7.6</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Pacific</td>
 <td >-0.8</td>
 <td >1.2</td>
 <td >-0.7</td>
 <td >4.8</td>
 <td >8.7</td>
 <td >8.0</td>
 <td >7.7</td>
 </tr>
 </tbody>
</table>
&nbsp;

 
 
 
 
 New England: Maine, New Hampshire, Vermont,
 Massachusetts, Rhode Island and Connecticut. 
 Middle Atlantic: New York, New Jersey and Pennsylvania. 
 East North Central: Michigan, Wisconsin, Illinois, Indiana and Ohio. 
 West North Central: North Dakota, South Dakota, Minnesota, Nebraska,
 Iowa, Kansas and Missouri. 
 South Atlantic: Delaware, Maryland, D.C., Virginia, West Virginia,
 North Carolina, South Carolina, Georgia and Florida. 
 East South Central: Kentucky, Tennessee, Mississippi and Alabama. 
 West South Central: Oklahoma, Arkansas, Texas and Louisiana. 
 Mountain: Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and
 New Mexico. 
 Pacific: Alaska, California, Hawaii, Oregon, Washington.
 
 
 
 
</html>

The Federal Housing Finance Agency (FHFA) Price Index for house purchases rose a solid 0.4% m/m (5.8% y/y) in November following an upwardly revised 0.4% m/m increase in October (previously reported as +0.3% m/m). The 5.8% y/y rate of [...]

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

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Tom Moeller

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Real GDP eased 0.3% SAAR (+2.1% y/y) during the first quarter of 2025 after increasing 2.4% in Q4’24 and 3.1% in Q3’24. A 0.4% increase had been expected in the Action Economics Forecast Survey. It was the first decline since Q1 2022.

Foreign trade subtracted 4.83 percentage points from growth last quarter as imports surged 41.3% (13.4% y/y) ahead of tariffs, which began to come into effect in the first quarter. The rise followed a 1.9% decline in Q4’24. Exports rose 1.8% (3.0% y/y) after easing 0.2% in Q4. Inventories added 2.25 percentage points to growth after subtracting 0.84 percentage point from Q4 growth.

Real final sales to domestic purchasers grew 2.3% (2.9% y/y) in Q1 after rising 3.0% in Q4. Personal consumption expenditures rose 1.8% (3.1% y/y) following a 4.0% gain. Durable goods spending fell 3.4% (+5.3% y/y) after surging 12.4% in Q4. Motor vehicle purchases declined 11.1% (+5.5% y/y) after strengthening 19.7% in Q4. Spending on home furnishings & appliances gained 1.5% (6.1% y/y) following a 5.4% rise. Recreational goods & vehicle outlays rose 2.5% (7.0% y/y) last quarter after a 13.9% Q4 increase.

Nondurable goods outlays rose 2.7% (3.0% y/y) following 3.1% growth in Q4. Apparel spending increased 6.7% (2.5% y/y) following a 5.0% rise. Food & beverage buying gained 2.5% (2.3% y/y) after a 1.8% increase. Gasoline & fuel oil purchases increased 4.6% (3.4% y/y) after falling 2.0% in Q4.

Spending on services increased 2.4% last quarter (2.7% y/y) after a 3.0% gain. Outlays on housing & utilities increased 3.4% (1.8% y/y) after rising 1.1% in Q4. Health care expenditures rose 4.0% (4.8% y/y) following a 4.7% strengthening. Transportation outlays increased 5.3% (4.6% y/y) after a 3.7% rise while recreation spending rose 4.7% (2.8% y/y) following a 4.5% rise. Restaurant & hotel expenditures declined 2.1% (+0.5% y/y) following a 2.8% rise. Financial services expenditures rose 1.9% (2.0% y/y) after a 3.1% Q4 increase.

Business fixed investment increased 9.8% (3.6% y/y) following a 3.0% decline in Q4. Expenditures on structures rose 0.4% (-0.4% y/y) after a 2.9% increase. Expenditures on producers’ durable equipment jumped 22.5% (8.0% y/y) after falling 8.7%.  Outlays on information processing equipment soared 69.3% (18.9% y/y) following a 7.3% decline. Industrial equipment investment fell 1.4% (-0.3% y/y) after easing 0.9%. Intellectual property product spending rose 4.1% (1.8% y/y) following a 0.5% decline. 

Residential structures investment increased 1.3% (-0.1% y/y) in Q1 after a 5.5% Q4 rise.

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Government spending fell 1.5% (+2.4% y/y) after a 3.1% Q4 rise. Federal government expenditures declined 5.1% (+2.9% y/y) after rising 4.0% in Q4. National defense expenditures declined 8.0% (+4.0% y/y) after increasing 4.8% in Q4. State & local government spending rose 0.8% (2.1% y/y) following a 2.5% rise.

The GDP price index rose 3.7% (2.6% y/y) after increasing 2.3% in Q4. It was the largest increase since Q4’22. A 2.4% increase had been expected. The PCE chain price index increased 3.6% (2.5% y/y) following a 2.4% rise. The PCE price index excluding food and energy rose 3.5% (2.8% y/y) after increasing 2.6% in Q4. The business fixed investment price index rose 0.4% (1.8% y/y) after 1.5% rise. The residential price index strengthened 3.9% (3.2% y/y) after a 1.9% rise while the government price index increased 4.7% (2.8% y/y) following a 2.1% rise.

The GDP data can be found in Haver’s **USECON** and **USNA** databases. **USNA** contains virtually all of the Bureau of Economic Analysis detail in the national accounts. The Action Economics consensus estimates can be found in **AS1REPNA**.

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- Decline in GDP is first in three years.
- Foreign trade subtracts substantially ahead of tariffs.
- Domestic final demand growth weakens.
- Price index strengthens with higher core PCE prices.

U.S. GDP Unexpectedly Declines in Q1’25; Prices Strengthen

Michael J. Moran

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High-side readings on the price indexes for personal consumption expenditures in January and February caused some concern about emerging price pressure, especially with some policies of the Trump administration possibly adding to the upward force. However, March brought notable relief, with the headline price index falling slightly (-0.04%). A marked decline in energy prices was helpful (-2.7%), but core prices also were subdued, increasing less than 0.1%.  Year-over-year changes were still above the Fed’s target of 2%, but only barely so for the headline measure (2.3%). The core index backed away from the reading of 3.0% in February, but the latest reading of 2.7% was in line with observations in the past year, and still uncomfortably above target.

Consumers roused from a winter slumber in March, with nominal outlays increasing 0.7%. With inflation restrained, real outlays also posted a gain of 0.7%. Spending on durable gods stood out, with real outlays advancing 3.2%. Real outlays for both nondurable goods and services rose 0.4%, a solid pace. Signs of life were certainly welcome after an average decline of 0.1% in January and February. The March rebound left growth of 1.8% (annual rate) in the first quarter.

The brisk increase in spending in March was supported by a solid gain in personal income (0.5% in both nominal and real terms). Growth in wage income was firm at 0.5%, while proprietors’ income was robust with a gain of 1.8% (not annualized!). The farm sector led the advance in proprietors’ income, but the nonfarm sector also was strong (0.6%).

The personal income and consumption figures are available in Haver’s **USECON** database with detail in the **USNA** database. The Action Economics forecasts are in **AS1REPNA**.

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- Price pressure eases.
- Spending rebounds after two soft months.

Personal Income, Consumption, and Prices in March

250430F20.jpg

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The Pending Home Sales Index, a forward-looking home sales measure based on contract signings, from the National Association of Realtors rose 6.1% to 76.5 (-0.6% y/y) during March after rising a little-revised 2.1% in February. These changes followed a 4.6% January decline.

The rise in March sales occurred as the rate on a 30-year mortgage eased to an average 6.65% from 6.84% in February. This rate was well above a low of 2.68% averaged in December 2020.

Pending home sales were up in most regions of the country. Sales in the Midwest rose 4.9% (1.4% y/y) last month after rising 1.8% in February. Sales in the South increased 9.8% (-0.4% y/y) following a 5.8% February rise. Sales in the West improved 4.8% (-2.0% y/y) after falling 3.0% in February. Sales in the Northeast were off 0.5% (-3.0% y/y) in March after falling 0.9% in February.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, similar to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is usually a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's **PREALTOR** database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the **WEEKLY** database.

- Sales rise to highest level in four months.
- Strength is evident throughout most of country.

U.S. Pending Home Sales Surge in March

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The employment cost index (ECI) for civilian workers, arguably the most accurate measure of labor compensation in the United States, rose 0.9% q/q (3.6% y/y) in Q1, the same quarterly increase as in last year’s Q4, according to the Bureau of Labor Statistics. The quarterly gains have fluctuated between 0.8% and 1.0% for the past six quarters. The Action Economics Forecast Survey had expected a 0.9% q/q increase and a 3.5% y/y gain.

Wages and salaries for civilian workers rose 0.8% q/q (3.5% y/y) in Q1, down from 1.0% q/q in Q4. This tied the Q3 2024 quarterly rise as the smallest increase since Q2 2021. It was also the smallest y/y increase since Q2 2021. Benefits increased by an outsized 1.2% q/q (3.9% y/y) in Q1 versus 0.8% q/q in Q4. This is the largest quarterly gain since Q2 2022. In general, employment cost gains remain above the pace observed prior to the pandemic but are slowing gradually.

Private industry workers’ compensation rose 0.8% q/q (3.4% y/y) in Q1, down from 0.9% q/q (3.6% y/y) in Q4. Wages and salaries for private industry workers increased 0.8% q/q (3.4% y/y) in Q1 versus 0.8% q/q (3.7% y/y) in Q4. The quarterly gain in Q1 tied that in Q3 2024 as the smallest increase since Q4 2020. Benefits for private industry workers jumped 1.2% q/q (3.6% y/y). the largest quarterly gain since Q2 2022. The acceleration in benefits in Q1 was primarily in service-producing industries.

Compensation in private goods-producing industries increased 1.0% q/q (3.2% y/y) in Q1, the largest quarterly gain in five quarters, versus a 0.7% q/q increase in Q4. Compensation in construction jumped 1.3% q/q, its largest quarterly increase since Q2 2022, up from a 0.6% q/q gain in Q4. Manufacturing compensation growth slowed to 0.7% q/q, its slowest quarterly advance since Q4 2020, from 0.8% q/q in Q4. Compensation in private service-producing industries increased 0.8% q/q (3.5% y/y), down slightly from a 0.9% q/q gain in Q4. Compensation in education and health services jumped 1.3% q/q, its largest quarterly gain since Q3 2023. In contrast, compensation in other services edged up 0.1% q/q in Q1, its smallest quarterly advance since before the pandemic.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

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- Compensation grew 0.9 q/q in Q1, the same pace as in Q4.
- Wage growth slowed to 0.8% q/q while benefits surged 1.2% q/q, their largest quarterly increase since Q2 2022.

Employment Cost Growth Steady in Q1 2025

Kathleen Stephansen, CBE

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The ADP National Employment Report indicated that nonfarm private sector payrolls rose 62,000 (1.4% y/y) during April after increasing 147,000 (1.4% y/y) during March, revised from 155,000. A 124,000 April rise in ADP employment had been expected in the Action Economics Forecast Survey.

Growth in median annual pay for "job stayers" eased to 4.5% y/y during April, from 4.6% y/y in March and from 4.7% y/y in the prior two months. Manufacturing sector pay grew 4.6% y/y during April, down from 4.8% y/y in March. Construction sector pay was unchanged at 4.7% y/y. Natural resource & mining sector pay grew 4.4% y/y. Financial sector pay rose 5.1% y/y, while education & health services pay rose 4.7% y/y. Leisure & hospitality pay also increased 4.7% y/y. Professional & business service sector pay increased 4.3% y/y as did trade, transportation & utilities pay. Information pay rose 4.1% y/y. Median annual pay for “job changers” rose 6.9% y/y after 6.7% y/y in March.

Small business hiring (less than 50 employees) rose 11,000 (0.6% y/y) after rising 18,000 (0.6% y/y) in March, revised down from 52,000. Employment at medium-sized firms (50-499,000 employees) rose 40,000 (1.1% y/y) after rising 43,000 (1.1% y/y). Large business hiring (500+ employees) rose 12,000 (3.4% y/y) in April, after rising 61,000 (3.6% y/y) in March, revised from 59,000.

Goods-producing employment rose 26,000 (1.3% y/y) in April, after rising 16,000 (1.3% y/y) during March, revised from 24,000. Manufacturing jobs rose 4,000 (-0.2% y/y) after rising 17,000 (-0.3% y/y) in March. The number of construction sector jobs rose 16,000 (3.4% y/y) in April, following a 2,000 (3.6% y/y) March increase, revised from 6,000. Natural resources & mining jobs rose 6,000 (2.8% y/y) in April after falling 3,000 (+1.9% y/y) in March.

The number of service-producing jobs rose 34,000 (1.4% y/y) during April, following a rise of 131,000 (1.4% y/y) in March. Professional & business services employment fell 2,000 (0.6% y/y) after rising 46,000 (0.7% y/y) in the prior month, revised from 57,000. Employment in the financial industry rose 20,000 (2.1% y/y) in April, after rising 38,000 (2.0% y/y) in March. Leisure and hospitality employment increased 27,000 (3.0% y/y), following a 23,000 (2.9% y/y) March increase, revised from 17,000. The number of education & health care jobs fell 23,000 (1.6% y/y) in April, following a 15,000 (1.8% y/y) rise in March, revised from 12,000. Information sector employment fell 8,000 (-0.1% y/y) after a rise of 3,000 (0.2% y/y) in March. The number of jobs in trade, transportation & utilities rose 21,000 (0.4% y/y) in April, after falling 4,000 (+0.4% y/y) in March, revised from a 6,000 fall. Employment in “other” services rose fell 1,000 (+3.2% y/y) following a 10,000 (3.4% y/y) rise in March, revised from 11,000.

By region, employment in the Northeast increased 10,000 (1.9% y/y) in April, following an increase of 95,000 (2.0% y/y) in March, revised from 89,000. Employment in the Midwest rose 42,000 (1.5% y/y) after a gain of 84,000 (1.4% y/y) in March, revised from 81,000. In the South, employment rose 3,000 (1.3% y/y) during April, after rising 10,000 (1.4% y/y) in March, revised from 27,000. In the West, employment rose 9,000 (0.6% y/y) after declining 43,000 (+0.6% y/y), revised from a 41,000 decline in March.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

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- Employment increase is modest in both services & factory sectors.
- Wage growth for “job stayers” moderates.
- Small and medium-sized business employment slows.

Economy in Brief: January 2019

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