Tom Moeller

Small business optimism, according to the National Federation of Independent Business (NFIB), was about unchanged in June but, at 88.2, the index remained near the lowest level since January 1975, its second lowest level on record. [...]

U.S. Small Business Optimism Stable, Near 1975 Low

Louise Curley

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707d.jpg" width="353">
Data on May industrial production for Germany, the United Kingdom and Norway were released today.
Industrial production in Germany and in the UK declined more sharply in May than the consensus in each country had expected. In Germany, the decline from April to May was 2.4% compared with a consensus expectation of a 0.5% decline. The actual decline was the steepest decline since August, 1997. Part of the decline may have been due to the fact that many workers took two days off between a Wednesday holiday and the weekend. In the UK, the decline was 0.8% compared with a consensus estimated decline of 0.2%. <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707e.jpg" width="353">
In contrast to the May declines in Germany and the UK, industrial production in Norway rose 1.7%. The longer term trends in industrial production in the three countries are shown in the first chart. (The original base for Norway&#39;s index (1995=100) and the UK&#39;s, (2003=100) have been changed to (2000=100) to facilitate comparison with Germany, whose base is (2000=100).) Since 2004, the trend in industrial production in Germany has been sharply upwards while those in the U.K. and Norway have tended downward.
Manufacturing is much more important in the German economy than it is in either of the economies of the U.K. or Norway. The second chart shows the importance of manufacturing in the three countries. In Germany the ratio of manufacturing to Gross Value Added has been relatively steady over the past ten years, just below 24%. In the U.K. the share of manufacturing has declined steadily as the service sector has increased. Manufacturing is currently only about 13% of the total economy. In Norway oil and gas extraction and services dominate the economy and manufacturing plays a small roll, accounting for only about 9% of the economy. 

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">INDUSTRIAL PRODUCTION (2000=100)&nbsp;</th>
<th scope="col">May 08</th>
<th scope="col">Apr 08&nbsp;</th>
<th scope="col">May 07&nbsp;</th>
<th scope="col">M/M Chg&nbsp;</th>
<th scope="col">Y/Y&nbsp; Chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>116.5</td>
<td>119.4</td>
<td>115.6</td>
<td>-2.43</td>
<td>0.78</td>
<td>116.3</td>
<td>109.8</td>
<td>103.6</td>
</tr>
<tr>
<td class="firstcol">United Kingdom</td>
<td>94.86</td>
<td>95.63</td>
<td>96.40</td>
<td>-0.81</td>
<td>-1.6</td>
<td>65.7</td>
<td>95.4</td>
<td>95.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Norway</td>
<td>64.55</td>
<td>93.02</td>
<td>92.12</td>
<td>1.65</td>
<td>2.64</td>
<td>93.7</td>
<td>94.4</td>
<td>96.8</td>
</tr>
</tbody>
</table>
</body>
</html>

Data on May industrial production for Germany, the United Kingdom and Norway were released today. Industrial production in Germany and in the UK declined more sharply in May than the consensus in each country had expected. In Germany, [...]

Industrial Production Declines More Than Expected in Germany And U.K.: Increases in Norway

Robert Brusca

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707c.jpg" align="left" border="0" height="265" width="353">
UK IP is now lower in two of the past three months. The
three-month moving average has turned negative. Weakness in the
industrial economy is now spreading and deepening. The consumer sector
is leading the weakness. Consumer durable goods output is down in seven
of the last eight months on a Yr/Yr basis. Consumer nondurables are
down yr/yr in six of the last eight months but also in eight of the
last 10 months (Yr/Yr basis as well). Intermediate goods output is off
in two of the past three-months Yr/Yr. While capital goods output has
fallen in May on a Yr/Yr basis for the first time since December 2005.

The declines in output the current quarter (2008-Q2) are
severe. For MFG the drop is -1.8% at an annual rate. Consumer durable
goods output is off at a 9.4% pace in the quarter. Nondurables output
is off at a 2.9% pace. Intermediate goods output is falling at a 3.3%
pace. Capital goods output is rising at a 2.0% pace.

The UK is showing both inflation pressures and economic
weakness. The weakness in the UK is more severe than what Europe has
showed, at least as a whole. Still, the UK like Europe continues to
show capital goods as the strongest sector. In this month&#8217;s report that
strength is clearly on the decline.



<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="11" scope="col"> UK IP and MFG</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>May 08</td>
<td>Apr 08</td>
<td>May 08</td>
<td>Apr 08</td>
<td>May 08</td>
<td>Apr 08</td>
<td>&nbsp;</td>
</tr>
<tr class="even">
<td class="firstcol">UK MFG</td>
<td>May 08</td>
<td>Apr 08</td>
<td>Mar 08</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q1 Date</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG</td>
<td>-0.6%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-3.8%</td>
<td>0.0%</td>
<td>-0.8%</td>
<td>0.2%</td>
<td>-0.8%</td>
<td>0.0%</td>
<td>-1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Durables</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-2.9%</td>
<td>-13.5%</td>
<td>-7.4%</td>
<td>1.6%</td>
<td>-1.2%</td>
<td>-1.2%</td>
<td>-3.5%</td>
<td>-9.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer-Nondurables</td>
<td>-0.8%</td>
<td>-0.1%</td>
<td>-0.4%</td>
<td>-5.1%</td>
<td>0.0%</td>
<td>-2.0%</td>
<td>0.2%</td>
<td>-1.7%</td>
<td>-0.4%</td>
<td>-2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate</td>
<td>-1.0%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-5.4%</td>
<td>-1.3%</td>
<td>-3.8%</td>
<td>-2.7%</td>
<td>-2.3%</td>
<td>0.3%</td>
<td>-3.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital</td>
<td>-0.7%</td>
<td>0.7%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>3.7%</td>
<td>1.1%</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>0.8%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Memo: Detail</td>
<td>1Mo%</td>
<td>1Mo%</td>
<td>1Mo%</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q4 Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Food Drink &amp; tobacco</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>-0.4%</td>
<td>-4.3%</td>
<td>-0.4%</td>
<td>-1.0%</td>
<td>0.4%</td>
<td>-1.4%</td>
<td>-1.7%</td>
<td>-2.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Textile &amp; Leather</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>0.5%</td>
<td>6.5%</td>
<td>4.4%</td>
<td>1.8%</td>
<td>0.6%</td>
<td>3.6%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Motor Vehicles &amp; trailer</td>
<td>-3.7%</td>
<td>1.9%</td>
<td>-1.0%</td>
<td>-11.0%</td>
<td>11.4%</td>
<td>2.9%</td>
<td>5.1%</td>
<td>5.1%</td>
<td>9.4%</td>
<td>-0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Mining and Quarry</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>3.4%</td>
<td>-3.3%</td>
<td>-5.8%</td>
<td>-12.2%</td>
<td>-7.0%</td>
<td>-5.7%</td>
<td>0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Electricity, Gas &amp; Water</td>
<td>-5.2%</td>
<td>1.3%</td>
<td>-1.0%</td>
<td>-18.2%</td>
<td>3.7%</td>
<td>-10.3%</td>
<td>-1.2%</td>
<td>-3.7%</td>
<td>7.3%</td>
<td>-8.2%</td>
</tr>
</tbody>
</table>
</body></html>

UK IP is now lower in two of the past three months. The three-month moving average has turned negative. Weakness in the industrial economy is now spreading and deepening. The consumer sector is leading the weakness. Consumer durable [...]

UK IP Trends Turn Lower

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707a.jpg" width="353">
Perhaps 2.2% doesn&#39;t sound like much, but as a measure of the degree motor vehicle miles driven in the U.S.has fallen, it continues an unprecedented decline in demand. That follows an inexorable rise in vehicle miles driven. Just since 1993, total mileage driven (the distances traveled by an increasing number of vehicles) had risen by one-third.
And it wasn&#39;t just the latest spike in prices that affected drivers&#39; behavior. The twelve-month average of vehicle miles driven peaked back in late-2006. Since that all-time peak, vehicle miles are down 1.5%. 
Last month, gasoline prices moved above $4.00 per gallon (which was double their average price in 2005). In response, vehicle miles driven fell 2.2% from the first four months of 2007. As further emphasis of the degree to which vehicle miles fell, 2008&#39;s first four months&#39; total miles driven was the lowest in three years. (The data for this past May will be available in roughly two weeks in Haver&#39;s USECON data base under &quot;Other Stats.&quot;) <img align="right" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707b.jpg" width="353">
Comments made this past April from the U.S. Department of Energy regarding gasoline prices can be found <a href="http://www.energy.gov/news/3499.htm"> here</a>.
In addition to driving fewer miles, motorists responded by buying fewer of the less fuel efficient light trucks. Data released last week indicate that June sales of light trucks overall fell to their lowest level since 1995 (-24.3% y/y). The relatively fuel inefficient U.S. made trucks fared even worse. Domestic light truck sales of 4.98 mil. (AR) units were at their lowest level since 1993 (-24.6% y/y). Sales of imported light trucks also were hit and show a 22.8% y/y decline. But the decline was from record levels in 2007.
Clearly, the rise in crude oil prices is behind the surge in gasoline prices. Near $140 per barrel the cost of a barrel light sweet crude (WTI) was double that of a year ago.
Crude Awakening: Behind the Surge in Oil Prices from the Federal Reserve Bank of Dallas can be found <a href="http://dallasfed.org/research/eclett/2008/el0805.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">April &#39;07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">U.S. Vehicle Miles Traveled (million)</td>
<td>245,888</td>
<td>246,182</td>
<td>250,616</td>
<td>2,993,100</td>
<td>3,018,390</td>
<td>2,968,576</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Year-to-Year</td>
<td>-1.8%</td>
<td>-4.3%</td>
<td>-4.2%</td>
<td>-0.8%</td>
<td>1.7%</td>
<td>1.1%</td>
</tr>
</tbody>
</table>


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Perhaps 2.2% doesn't sound like much, but as a measure of the degree motor vehicle miles driven in the U.S.has fallen, it continues an unprecedented decline in demand. That follows an inexorable rise in vehicle miles driven. Just [...]

U.S. Gasoline Prices Up - Driving Down

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707a.jpg" align="left" border="0" height="265" width="353">
Perhaps 2.2% doesn't sound like much, but as a measure of the
degree motor vehicle miles driven in the U.S.has fallen, it continues
an unprecedented decline in demand. That follows an inexorable rise in
vehicle miles driven. Just since 1993, total mileage driven (the
distances traveled by an increasing number of vehicles) had risen by
one-third.
And it wasn't just the latest spike in prices that affected
drivers' behavior. The twelve-month average of vehicle miles driven
peaked back in late-2006. Since that all-time peak, vehicle miles are
down 1.5%. 
Last month, gasoline prices moved above $4.00 per gallon
(which was double their average price in 2005). In response, vehicle
miles driven fell 2.2% from the first four months of 2007. As further
emphasis of the degree to which vehicle miles fell, 2008's first four
months' total miles driven was the lowest in three years. (The data for
this past May will be available in roughly two weeks in Haver's
USECON data base under "Other Stats.") <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707b.jpg" align="right" border="0" height="265" width="353">
Comments made this past April from the U.S. Department of
Energy regarding gasoline prices can be found <a href="http://www.energy.gov/news/3499.htm"> here</a>.
In addition to driving fewer miles, motorists responded by
buying fewer of the less fuel efficient light trucks. Data released
last week indicate that June sales of light trucks overall fell to
their lowest level since 1995 (-24.3% y/y). The relatively fuel
inefficient U.S. made trucks fared even worse. Domestic light truck
sales of 4.98 mil. (AR) units were at their lowest level since 1993
(-24.6% y/y). Sales of imported light trucks also were hit and show a
22.8% y/y decline. But the decline was from record levels in 2007.
Clearly, the rise in crude oil prices is behind the surge in
gasoline prices. Near $140 per barrel the cost of a barrel light sweet
crude (WTI) was double that of a year ago.
Crude
Awakening: Behind the Surge in Oil Prices from the
Federal Reserve Bank of Dallas can be found <a href="http://dallasfed.org/research/eclett/2008/el0805.html">here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">&nbsp;</th>
<th scope="col">April</th>
<th scope="col">March</th>
<th scope="col">April '07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">U.S. Vehicle Miles Traveled
(million)</td>
<td>245,888</td>
<td>246,182</td>
<td>250,616</td>
<td>2,993,100</td>
<td>3,018,390</td>
<td>2,968,576</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Year-to-Year</td>
<td>-1.8%</td>
<td>-4.3%</td>
<td>-4.2%</td>
<td>-0.8%</td>
<td>1.7%</td>
<td>1.1%</td>
</tr>
</tbody>
</table>
Industrial Production Declines
More Than Expected in Germany And U.K.: Increases in Norway 
by <a href="/comment/Curley.html">Louise
Curley</a> July 7, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707d.jpg" align="left" border="0" height="265" width="353">
Data on May industrial production for Germany, the United
Kingdom and Norway were released today.
Industrial production in Germany and in the UK declined more
sharply in May than the consensus in each country had expected. In
Germany, the decline from April to May was 2.4% compared with a
consensus expectation of a 0.5% decline. The actual decline was the
steepest decline since August, 1997. Part of the decline may have been
due to the fact that many workers took two days off between a Wednesday
holiday and the weekend. In the UK, the decline was 0.8% compared with
a consensus estimated decline of 0.2%. <img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707e.jpg" align="right" border="0" height="265" width="353">
In contrast to the May declines in Germany and the UK,
industrial production in Norway rose 1.7%. The longer term trends in
industrial production in the three countries are shown in the first
chart. (The original base for Norway's index (1995=100) and the UK's,
(2003=100) have been changed to (2000=100) to facilitate comparison
with Germany, whose base is (2000=100).) Since 2004, the trend in
industrial production in Germany has been sharply upwards while those
in the U.K. and Norway have tended downward.
Manufacturing is much more important in the German economy
than it is in either of the economies of the U.K. or Norway. The second
chart shows the importance of manufacturing in the three countries. In
Germany the ratio of manufacturing to Gross Value Added has been
relatively steady over the past ten years, just below 24%. In the U.K.
the share of manufacturing has declined steadily as the service sector
has increased. Manufacturing is currently only about 13% of the total
economy. In Norway oil and gas extraction and services dominate the
economy and manufacturing plays a small roll, accounting for only about
9% of the economy. 


<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol">INDUSTRIAL
PRODUCTION (2000=100)&nbsp;</th>
<th scope="col">May 08</th>
<th scope="col">Apr 08&nbsp;</th>
<th scope="col">May 07&nbsp;</th>
<th scope="col">M/M Chg&nbsp;</th>
<th scope="col">Y/Y&nbsp; Chg&nbsp;</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Germany</td>
<td>116.5</td>
<td>119.4</td>
<td>115.6</td>
<td>-2.43</td>
<td>0.78</td>
<td>116.3</td>
<td>109.8</td>
<td>103.6</td>
</tr>
<tr>
<td class="firstcol">United Kingdom</td>
<td>94.86</td>
<td>95.63</td>
<td>96.40</td>
<td>-0.81</td>
<td>-1.6</td>
<td>65.7</td>
<td>95.4</td>
<td>95.2</td>
</tr>
<tr class="odd">
<td class="firstcol">Norway</td>
<td>64.55</td>
<td>93.02</td>
<td>92.12</td>
<td>1.65</td>
<td>2.64</td>
<td>93.7</td>
<td>94.4</td>
<td>96.8</td>
</tr>
</tbody>
</table>
UK IP Trends Turn Lower by <a href="/comment/Brusca.html">Robert
Brusca</a> July 7, 2008


<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080707c.jpg" align="left" border="0" height="265" width="353">
UK IP is now lower in two of the past three months. The
three-month moving average has turned negative. Weakness in the
industrial economy is now spreading and deepening. The consumer sector
is leading the weakness. Consumer durable goods output is down in seven
of the last eight months on a Yr/Yr basis. Consumer nondurables are
down yr/yr in six of the last eight months but also in eight of the
last 10 months (Yr/Yr basis as well). Intermediate goods output is off
in two of the past three-months Yr/Yr. While capital goods output has
fallen in May on a Yr/Yr basis for the first time since December 2005.

The declines in output the current quarter (2008-Q2) are
severe. For MFG the drop is -1.8% at an annual rate. Consumer durable
goods output is off at a 9.4% pace in the quarter. Nondurables output
is off at a 2.9% pace. Intermediate goods output is falling at a 3.3%
pace. Capital goods output is rising at a 2.0% pace.

The UK is showing both inflation pressures and economic
weakness. The weakness in the UK is more severe than what Europe has
showed, at least as a whole. Still, the UK like Europe continues to
show capital goods as the strongest sector. In this month&#8217;s report that
strength is clearly on the decline.


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="11" scope="col"> UK IP
and MFG</th>
</tr>
</thead>
<tbody>
<tr class="even">
<td class="firstcol">Saar except m/m</td>
<td colspan="3">Mo/Mo</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>&nbsp;</td>
</tr>
<tr class="even">
<td class="firstcol">UK MFG</td>
<td>May 
08</td>
<td>Apr 
08</td>
<td>Mar 
08</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q1 
Date</td>
</tr>
<tr class="odd">
<td class="firstcol">MFG</td>
<td>-0.6%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-3.8%</td>
<td>0.0%</td>
<td>-0.8%</td>
<td>0.2%</td>
<td>-0.8%</td>
<td>0.0%</td>
<td>-1.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer Durables</td>
<td>-0.1%</td>
<td>-0.6%</td>
<td>-2.9%</td>
<td>-13.5%</td>
<td>-7.4%</td>
<td>1.6%</td>
<td>-1.2%</td>
<td>-1.2%</td>
<td>-3.5%</td>
<td>-9.4%</td>
</tr>
<tr class="odd">
<td class="firstcol">Consumer-Nondurables</td>
<td>-0.8%</td>
<td>-0.1%</td>
<td>-0.4%</td>
<td>-5.1%</td>
<td>0.0%</td>
<td>-2.0%</td>
<td>0.2%</td>
<td>-1.7%</td>
<td>-0.4%</td>
<td>-2.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">Intermediate</td>
<td>-1.0%</td>
<td>0.1%</td>
<td>-0.5%</td>
<td>-5.4%</td>
<td>-1.3%</td>
<td>-3.8%</td>
<td>-2.7%</td>
<td>-2.3%</td>
<td>0.3%</td>
<td>-3.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Capital</td>
<td>-0.7%</td>
<td>0.7%</td>
<td>0.0%</td>
<td>0.0%</td>
<td>3.7%</td>
<td>1.1%</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>0.8%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">Memo: Detail</td>
<td>1Mo%</td>
<td>1Mo%</td>
<td>1Mo%</td>
<td>3Mo</td>
<td>3Mo</td>
<td>6mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Q4 
Date</td>
</tr>
<tr class="odd">
<td class="firstcol">Food Drink &amp; tobacco</td>
<td>-0.3%</td>
<td>-0.4%</td>
<td>-0.4%</td>
<td>-4.3%</td>
<td>-0.4%</td>
<td>-1.0%</td>
<td>0.4%</td>
<td>-1.4%</td>
<td>-1.7%</td>
<td>-2.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">Textile &amp; Leather</td>
<td>-0.3%</td>
<td>0.1%</td>
<td>0.3%</td>
<td>0.5%</td>
<td>6.5%</td>
<td>4.4%</td>
<td>1.8%</td>
<td>0.6%</td>
<td>3.6%</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">Motor Vehicles &amp; trailer</td>
<td>-3.7%</td>
<td>1.9%</td>
<td>-1.0%</td>
<td>-11.0%</td>
<td>11.4%</td>
<td>2.9%</td>
<td>5.1%</td>
<td>5.1%</td>
<td>9.4%</td>
<td>-0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Mining and Quarry</td>
<td>0.7%</td>
<td>-0.1%</td>
<td>0.3%</td>
<td>3.4%</td>
<td>-3.3%</td>
<td>-5.8%</td>
<td>-12.2%</td>
<td>-7.0%</td>
<td>-5.7%</td>
<td>0.3%</td>
</tr>
<tr class="odd">
<td class="firstcol">Electricity, Gas &amp; Water</td>
<td>-5.2%</td>
<td>1.3%</td>
<td>-1.0%</td>
<td>-18.2%</td>
<td>3.7%</td>
<td>-10.3%</td>
<td>-1.2%</td>
<td>-3.7%</td>
<td>7.3%</td>
<td>-8.2%</td>
</tr>
</tbody>
</table>
</body></html>

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080703f.jpg" width="353">
Initial claims for unemployment insurance last week surged to 404,000 versus an upwardly revised 388,000 during the prior week. Consensus expectations had been for 385,000 claims.
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.
The four-week moving average of initial claims again rose to 390,500 (22.5% y/y). Claims averaged 369,000 during May. The numbers compare to March when initial claims averaged 375,000.
Continuing claims for unemployment insurance reversed some of the prior week&#39;s jump with a 19,000 worker decline. The four-week average of continuing claims rose to a new cycle high of 3,110,750.
Continuing claims provide some indication of workers&#39; ability to find employment and they lag the initial claims figures by one week.
The insured rate of unemployment slipped to 2.3%.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a>&nbsp;</th>
<th scope="col">06/28/08</th>
<th scope="col">06/21/08</th>
<th scope="col">Y/Y</th>
<th scope="col">2007</th>
<th scope="col">2006&nbsp;</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Initial Claims</td>
<td>&nbsp;404</td>
<td>388</td>
<td>25.5%</td>
<td>322</td>
<td>313</td>
<td>331</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>3,116</td>
<td>21.9%</td>
<td>2,552</td>
<td>2,459</td>
<td>2,662</td>
</tr>
</tbody>
</table>
</body>
</html>

Initial claims for unemployment insurance last week surged to 404,000 versus an upwardly revised 388,000 during the prior week. Consensus expectations had been for 385,000 claims. A claims level below 400,000 typically has been [...]

U.S. Initial Claims for Unemployment Insurance Surged

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<img align="left" border="0" height="265" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080703e.jpg" width="353">
In June, the Composite Index for the non-manufacturing sector from the Institute for Supply Management fell to its lowest level since this past January. At 48.2, the index fell from 51.7. Consensus expectations had been for a higher reading of 51.0.
Beginning with the January 2008 Non-Manufacturing <cite>Report On Business</cite>&reg;, a composite index is now calculated as an indicator of the overall economic condition for the non-manufacturing sector. It is a composite index based on the diffusion indexes for four of the indicators (business activity, new orders, employment and supplier deliveries) with equal weights. The latest report from the ISM can be found <a href="http://www.ism.ws/ISMReport/NonMfgROB.cfm">here</a>.
The non-manufacturing business activity sub-index fell to 49.9 from 53.6 and so far in 2008 has averaged a break-even 49.9, down from 56.0 during all of last year. Since the series&#39; inception in 1997 there has been a 48% correlation between the level of the business activity index for the non-manufacturing sector and the Q/Q change in real GDP for the services and the construction sectors.
The new orders sub-index fell hard to 48.6 from 53.6 in May. The employment index fell even harder to 43.8, a historic low for this series. Since the series&#39; inception in 1997 there has been a 56% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service-producing plus the construction industries.
Pricing power surged to a historic high for this series. Since inception ten years ago, there has been a 60% correlation between the price index and the q/q change in the GDP services chain price index.
ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates back to July 1997.
Liquidity Crisis from the Federal Reserve Bank of Philadelphia can be found <a href="http://www.philadelphiafed.org/files/br/2008/q2/elul_liquidity-crises.pdf"> here</a>.

<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col></colgroup>
<thead>
<tr>
<th scope="col" class="firstcol"><a href="http://www.haverselect.com/dlx/USECON/@EF/@EF03/@EF03.HTM">ISM Nonmanufacturing Survey</a></th>
<th scope="col">June</th>
<th scope="col">May</th>
<th scope="col">June &#39;07</th>
<th scope="col">2007</th>
<th scope="col">2006</th>
<th scope="col">2005</th>
</tr>
</thead>
<tbody>
<tr>
<td class="firstcol">Composite Index</td>
<td>48.2</td>
<td>51.7</td>
<td>55.1</td>
<td>53.5</td>
<td>55.7</td>
<td>58.0</td>
</tr>
<tr>
<td class="firstcol">Prices Index</td>
<td>84.5</td>
<td>77.0</td>
<td>65.6</td>
<td>63.8</td>
<td>65.3</td>
<td>68.0</td>
</tr>
</tbody>
</table>


</html>

In June, the Composite Index for the non-manufacturing sector from the Institute for Supply Management fell to its lowest level since this past January. At 48.2, the index fell from 51.7. Consensus expectations had been for a higher [...]

U.S. ISM Non-Manufacturing Index Lowest Since January, Pricing Power Surged

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<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/080703d.jpg" align="left" border="0" height="265" width="353">
The service sector is eroding across Europe. France had
resisted deterioration for some time but in recent months the French
reading has dropped sharply. Spain and the UK have the weakest readings
since this index was instituted on a broad basis in May of 2000. France
and Italy are in the lower 10 percentile of their respective ranges.
Germany, at 53.3, is still showing expansion and is above the midpoint
of its range at a percentile standing of 56.9. For the whole of the
Euro Area the service sector standing is in the bottom 17 percentile of
its range. 
 

All country indices were slipping from mid-2007 onward Germany
alone saw its service sector then find a bottom and rebound from early
2008 through April. But over the past two months Germany&#8217;s service
sector has been under pressure, despite is being the clear best
performer in the e-Zone. 
 

The companion readings for consumer confidence show that the
performance of confidence across countries correlates well with the
performance of the service sector. Consumers in Spain and the UK are
the glummest and these countries have the weakest service sectors. The
French and Italian consumers are also glum but not as shell-shocked as
in the UK and Spain. Meanwhile, in Germany, consumer confidence, like
the service sector reading itself, stands above its range midpoint in
June. 
 

The service sector is where the jobs are and therefore where
much of consumer income is generated. The performance of this sector is
important to the economy. The slippage in European services sector
performance is a bad sign for the future, especially on a day that the
ECB has chosen to hike its key lending rate by 25bp. 
 
 


<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"> NTC
Services Indices for EU/EMU</th>
</tr>
</thead>
<tbody>
<tr class="grey4">
<td class="firstcol">&nbsp;</td>
<td>Jun-08</td>
<td>May-08</td>
<td>Apr-08</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr class="grey1">
<td class="firstcol">Euro-13</td>
<td>49.13</td>
<td>50.60</td>
<td>51.98</td>
<td>50.57</td>
<td>51.03</td>
<td>53.32</td>
<td>17.5%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany</td>
<td>53.35</td>
<td>53.79</td>
<td>54.92</td>
<td>54.02</td>
<td>52.54</td>
<td>53.83</td>
<td>56.9%</td>
</tr>
<tr class="grey1">
<td class="firstcol">France</td>
<td>50.10</td>
<td>50.46</td>
<td>52.82</td>
<td>51.13</td>
<td>54.23</td>
<td>56.34</td>
<td>8.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy</td>
<td>48.52</td>
<td>48.12</td>
<td>49.81</td>
<td>48.82</td>
<td>48.37</td>
<td>51.21</td>
<td>9.3%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Spain</td>
<td>36.72</td>
<td>43.26</td>
<td>42.50</td>
<td>40.83</td>
<td>42.29</td>
<td>47.51</td>
<td>0.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Ireland</td>
<td>41.94</td>
<td>43.89</td>
<td>45.19</td>
<td>43.67</td>
<td>46.55</td>
<td>50.84</td>
<td>0.0%</td>
</tr>
<tr class="grey5">
<td class="firstcol" colspan="8">EU
only</td>
</tr>
<tr class="grey1">
<td class="firstcol">UK (CIPs)</td>
<td>47.14</td>
<td>49.77</td>
<td>50.35</td>
<td>49.09</td>
<td>50.98</td>
<td>52.88</td>
<td>6.0%</td>
</tr>
<tr class="grey5">
<td colspan="8" class="firstcol">EU
Commission Indices for
EU and EMU</td>
</tr>
<tr class="grey4">
<td class="firstcol">EU Index</td>
<td>Jun-08</td>
<td>May-08</td>
<td>Apr-08</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr class="grey1">
<td class="firstcol">EU Services</td>
<td>7</td>
<td>6</td>
<td>6</td>
<td>-14.67</td>
<td>-13.33</td>
<td>-9.58</td>
<td>17.4%</td>
</tr>
<tr class="grey3">
<td class="firstcol">EMU</td>
<td>Jun-08</td>
<td>May-08</td>
<td>Apr-08</td>
<td>3Mo</td>
<td>6Mo</td>
<td>12Mo</td>
<td>Percentile</td>
</tr>
<tr class="grey1">
<td class="firstcol">Services</td>
<td>9</td>
<td>8</td>
<td>7</td>
<td>8.00</td>
<td>9.33</td>
<td>13.25</td>
<td>39.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Cons Confidence</td>
<td>-17</td>
<td>-15</td>
<td>-12</td>
<td>-14.67</td>
<td>-13.33</td>
<td>5.64</td>
<td>17.4%</td>
</tr>
<tr class="grey2">
<td colspan="8" class="firstcol">Consumer
confidence by
country</td>
</tr>
<tr class="grey1">
<td class="firstcol">Germany-Consumer Confidence</td>
<td>-4</td>
<td>-4</td>
<td>0</td>
<td>-2.67</td>
<td>-2.33</td>
<td>1.08</td>
<td>59.4%</td>
</tr>
<tr class="grey1">
<td class="firstcol">France-Consumer Confidence</td>
<td>-22</td>
<td>-18</td>
<td>-15</td>
<td>-18.33</td>
<td>-16.50</td>
<td>-11.33</td>
<td>21.2%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Italy-Consumer Confidence</td>
<td>-21</td>
<td>-20</td>
<td>-23</td>
<td>-21.33</td>
<td>-22.33</td>
<td>-21.42</td>
<td>14.8%</td>
</tr>
<tr class="grey1">
<td class="firstcol">Spain-Consumer Confidence</td>
<td>-38</td>
<td>-31</td>
<td>-25</td>
<td>-31.33</td>
<td>-25.67</td>
<td>-20.25</td>
<td>0.0%</td>
</tr>
<tr class="grey1">
<td class="firstcol">UK-Consumer Confidence</td>
<td>-20</td>
<td>-15</td>
<td>-13</td>
<td>-16.00</td>
<td>-12.33</td>
<td>-7.75</td>
<td>0.0%</td>
</tr>
<tr class="grey6">
<td colspan="8" class="firstcol">percentile
is over range since May
2000</td>
</tr>
</tbody>
</table>
</body></html>

The service sector is eroding across Europe. France had resisted deterioration for some time but in recent months the French reading has dropped sharply. Spain and the UK have the weakest readings since this index was instituted on a [...]

Service Sectors Are Weakening Across Europe

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

AI boosting US investment in data centers

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

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

US financial markets have gotten used to elevated policy uncertainty

FOMC now expects more rate cuts going forward than in June

China gaining ASEAN exports while US exports slump

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

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

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

Equity market exuberance outpacing macroeconomic data

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

US production rebounded in Q2, but demand continued to slow

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

Negative US inflation surprises leading G10 down

Deflation continues in China

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

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Consumer credit outstanding increased $13.1 billion (2.3% y/y) in September after rising $3.1 billion in August, revised from $0.4 billion, and $17.7 billion in July, revised from $18.1 billion. A $10.0 billion rise had been expected in the Action Economics Forecast Survey.

Nonrevolving credit outstanding rose $11.4 billion (2.1% y/y) in September after increasing $9.2 billion in August, revised from $6.3 billion, and increasing $6.7 billion in July, revised from $6.9 billion. Nonrevolving credit held by depository institutions declined 6.8% y/y in September after falling 7.4% y/y in August. Finance company debt holdings fell 1.5% y/y after declining 1.3%, while credit union holdings rose an increased 12.8% y/y in September, the quickest growth since in two years. Nonrevolving debt of the federal government rose 3.6% y/y in September, the same as in August.

In September, revolving credit outstanding, which includes credit cards, rose $1.7 billion (2.6% y/y) after falling $6.1 billion in August, revised from a $6.0 billion decline, and rising $11.0 billion in July, revised from $11.2 billion. Revolving credit outstanding held by depository institutions fell 3.0% y/y. Revolving credit held by finance companies fell a steady 14.7% y/y in September, while credit union debt rose 4.5% y/y in September, up from 3.7% y/y in August.

The consumer credit figures from the Federal Reserve Board are break-adjusted and calculated by Haver Analytics. The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of data from the Census and the Survey of Finance Companies, as well as changes in the seasonal adjustment methodology. The consumer credit data are available in Haver’s **USECON** database. The Action Economics forecast figures are contained in the **AS1REPNA** database.

**AI and the Economy** is the title of today’s speech by Federal Reserve Vice Chair Philip N. Jefferson and it can be found [here](https://www.federalreserve.gov/newsevents/speech/jefferson20251107a.htm).

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- Notable gain in credit usage follows prior month’s slowdown.
- Nonrevolving credit usage strengthens and revolving turns positive.

U.S. Consumer Credit Strengthens in September

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The Industrial Materials Price Index from the Foundation for International Business and Economic Research (FIBER) eased 0.1% during the four weeks ended November 7, 2025 after improving 0.3% in the prior four-week period. The index increased 0.5% y/y following a 0.8% y/y gain at the end of October.

Prices in the **Textile** group increased 2.5% during the last four weeks and rose 3.3% y/y. The cost of burlap increased 23.8% in the last four weeks while surging 48.1% over the last year. Showing modest improvement, cotton prices rose 0.9% in four weeks but declined 5.6% y/y.

**Metals** group prices increased 1.5% (5.9% y/y) in the last four weeks as the cost of aluminum rose 4.9	% (10.3% y/y). Zinc prices moved up 3.6% (5.4% y/y) and the cost of steel scrap rose 1.4% (-5.9% y/y). Lead prices increased 1.1% (-0.2% y/y) in four weeks and the cost of copper scrap rose 0.6% (13.9% y/y). Working lower, tin prices declined 2.2% (+13.8% y/y) in four weeks.

**Miscellaneous** group prices weakened 2.9% in the last four weeks and were off 1.0% y/y, as framing lumber prices fell 11.3% (-4.3% y/y). The cost of tallow, used for frying & baking, declined 9.0% (+10.5% y/y) in four weeks. Offsetting this weakness, natural rubber prices rose 2.0% in four weeks, but were off 6.6% y/y.

Prices in the **crude oil & benzene** group declined 1.6% (-10.8% y/y) in the last four weeks. The cost of West Texas Intermediate crude oil fell 2.2% in four weeks to $60.31 per barrel and declined 15.6% y/y. The price was increased from a low of $58.47 in the third week of last month. The price of the petro-chemical benzene fell 3.8% (-23.2% y/y) in four weeks.

**Excluding crude oil**, the industrial commodity price index was unchanged (+1.5% y/y) over the last four weeks after rising 0.5% during the prior four weeks.

The Foundation for International Business and Economic Research (FIBER) develops economic measurement techniques as applied to business cycles and inflation in the U.S. and other market economies. The commodity price data can be found in Haver's **DAILY**, **WEEKLY**, **USECON** and **CMDTY** databases.

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- Textile and metals prices strengthen.
- Framing lumber costs plummet.
- Crude oil prices weaken.

FIBER: Industrial Commodity Price Index Moves Sideways in Latest Four Weeks

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The chart provides a good overview for German trade trend. The table breaks trade trends down by categories and provides growth rates on shorter horizons of 3 months, 6 months and 12 months. But the chart depicts the overarching trends well. It shows the German surplus being diminished on a gradual path and not altogether in a clear monotonic fashion. Export and import lines on the chart move mostly sideways (horizontal). The export line is below the import line since late last year. These two series plots on the right-hand scale and they depict growth rates (year-over-year). So sideways movements mean roughly steady growth. Exports have been growth steadily year-over-year at a weak pace that on occasion has been a decline in terms of their year-on-year value. Generally, the green line is in positive territory. The red import line has been stronger, indicating somewhat better, steadier import growth over the period.

While exports had a good September, export growth sequenced from 12-months to 6-months, to 3-months has been weakening. Imports also put in a strong September but are showing some erosion from 12-month to 6-months to 3-months in terms of annualized rates of growth. Still, import growth rates remain quite strong and consistent; the sense of erosion is clear but also moderate – it’s a moderate erosion in progress for imports.

Capital goods exports from Germany are improving- this observation is based on lagged data with a one-month lag built in. But consumer goods and vehicle exports are slowing and rather sharply- likely as a result of U.S. tariffs.

Import side trends, with the same lag, are not as clear cut. Capital goods imports are growing, and motor vehicle imports are improving and accelerating. Consumer goods imports have erratically slowed.

Real exports and imports on sequential lagged data show exports contracting on most horizons while imports generate consistent positive growth in real terms. There is a big difference in these two trends expressed in real terms.

On balance, German trade trends are shifting. The trade balance is gradually eroding. Change is in play.

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Germany

German Trade Surplus Shrinks Despite Strong Exports

Andrew Cates

**The global growth cycle**
The new orders-to-inventory spread in the global manufacturing PMI is often been viewed as one of the most reliable forward-looking indicators of the global economic cycle. When new orders are rising relative to inventories, it typically signals that demand is firming, production pipelines are beginning to refill, and industrial momentum is building. Conversely, when inventories accumulate faster than orders, it often foreshadows a slowdown. As the chart shows, this spread has been holding up relatively well in recent months, suggesting that despite ongoing headwinds—US tariff policies, uneven global demand, and geopolitical uncertainty—the underlying pulse of global manufacturing remains resilient.

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**US credit standards**
The latest Senior Loan Officer Opinion Survey (SLOOS) from the Federal Reserve suggests that credit conditions remain tight but are no longer worsening, marking a tentative stabilization after several quarters of tightening. Banks reported modest easing in standards for some categories of corporate and commercial real estate loans, though mortgage lending remains constrained. Demand for business credit continues to soften, reflecting both higher borrowing costs and a cautious corporate outlook. Historically, periods of widespread tightening—like those seen in 2008 and 2020—have coincided with sharp rises in the private sector savings balance (a proxy for deleveraging), as firms and households retrench simultaneously. The current configuration, shown in the chart, indicates lingering deleveraging pressures, but not a collapse in credit availability.

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**China**
Moving to China, the latest official and Caixin PMI releases for October painted a mixed picture of activity. Both manufacturing indices softened, suggesting that the industrial rebound which underpinned much of China’s recent growth may be losing some traction. The official non-manufacturing PMI, by contrast, edged higher, hinting at continued resilience in construction and public-sector-linked services, while the Caixin services measure—which tends to reflect smaller, private-sector firms—slipped modestly. The divergence underscores China’s two-speed recovery: industrial production and exports have carried the economy, while household spending and smaller enterprises remain subdued. If manufacturing momentum fades in the coming months, the economy could face a renewed loss of balance, with fewer reliable growth engines. Still, overall performance this year has surpassed expectations, and the government’s 5% growth target remains within reach, provided activity holds steady through year-end. Looking ahead, marginal policy support and improved external sentiment—helped by selective tariff relief from the US—could offer limited, though welcome, cushioning.

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**Australia** 
In Australia, the RBA left the cash rate unchanged at its November meeting, maintaining a cautious stance amid a still-complex inflation and growth backdrop. The case for further easing has become less compelling as core inflation (trimmed mean CPI) remains above target and labour market conditions—while gradually softening—continue to show resilience. The unemployment rate has edged higher but remains low by historical standards, consistent with lingering wage and services price pressures. Recent data also hint at a tentative pickup in activity, supported by strong population growth and stabilising commodity exports. Against that backdrop, the RBA has stressed that the path for policy remains finely balanced, with a strong focus on incoming inflation data and global financial conditions. While downside risks persist—particularly from China’s slowdown and weak global trade—the persistence of domestic price pressures means the bar for renewed rate cuts remains relatively high.

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**Argentina**
Turning to Argentina, markets continue to digest the implications of President Milei’s midterm election victory amid deepening economic and financial imbalances. The peso’s broad nominal effective exchange rate has remained under heavy pressure, extending its long-running slide as investors weigh the challenges of implementing fiscal consolidation and monetary reform in a fragile political and social environment. In stark contrast, the Buenos Aires stock index has surged to record highs, reflecting optimism that Milei’s reformist agenda—anchored in deregulation, privatisation, and fiscal restraint—may eventually stabilise the economy and attract renewed capital inflows. The divergence between a falling currency and soaring equity prices highlights the tension between near-term macro risks and longer-term reform hopes. Going forward, investor confidence will hinge on the government’s ability to deliver credible policy execution while managing the inflationary fallout from ongoing peso weakness.

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**Global CO2 emissions**
Shifting focus to more structural issues, the chart underscores how decarbonisation challenges remain deeply concentrated in a few heavy-emitting sectors. Energy production alone accounts for nearly 40% of global CO₂ emissions, with manufacturing, households, and transport together contributing another 50%. This composition highlights the complex trade-offs of the energy transition: the very sectors that underpin modern living standards—power generation, industrial output, mobility, and housing—are also those most difficult to decarbonise. Climate change is therefore not just an environmental issue but a structural economic one, shaping investment, infrastructure, and pricing systems for decades to come. The tension between sustaining growth and cutting emissions will remain a defining challenge for policymakers, particularly as clean technologies face constraints in scaling fast enough to offset rising global demand for energy-intensive goods and services.

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Recent financial market developments have been shaped by a renewed bout of volatility, with heightened concerns about stretched AI valuations triggering a big correction across parts of the tech sector. This comes against a backdrop of lingering uncertainty in Washington, where the US government shutdown has continued to delay the release of several key economic reports, clouding visibility on near-term momentum. Still, the broader macro signals offer a mixed but nuanced picture. Global manufacturing PMIs have continued to hold up, hinting that underlying industrial momentum remains resilient (chart 1). The latest US Senior Loan Officer Survey points to a stabilisation in credit conditions—banks remain cautious, but the most intense phase of tightening may have now passed (chart 2). In China, the October PMIs reflected renewed softness in manufacturing alongside a still-steady services sector, tentatively suggesting that growth may be rebalancing, albeit at a weaker aggregate pace of growth (chart 3). Australia’s inflation and labour market data, meanwhile, have complicated the case for near-term policy easing, with the RBA opting to stay on hold this week as core inflation remain sticky. In Argentina, currency weakness persists even as equity markets rally, highlighting the policy and market tension surrounding President Milei’s reform agenda (chart 5). And finally, at a more structural level, latest global emissions data serve as a reminder that energy, manufacturing, transport, and households remain the principal sources of CO₂—illustrating how the climate and energy transition will continue to shape the macro landscape well beyond the current economic cycle (chart 6).

Charts of the Week: Uneven But Unbroken

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Initial claims for unemployment insurance fell 12,643 during the week ended October 25 to 219,520 (+0.6% y/y) and mostly reversed the prior week’s increase to 232,163. The four-week moving average of initial claims eased to 226,766 from 227,953. They have trended higher this year, after weakening late in 2024. The four-week average hit a low of 200,323 in January 2024.

Federal government employees initially filed 9,435 jobless insurance claims last week after 10,062 in the prior week. These figures are increased from 588 at the end of September.

Continuing claims for unemployment insurance rose to 1.957 million (5.5% y/y) in the week ended October 18 from 1.947 million in the prior week. The four-week moving average rose to 1.940 million from 1.931 million. It was the highest level since the last week of August.	

Federal government employees continuing benefits rose to 23,188 in the week ended October 18 from 14,472 in the prior week. These figures are increased from 8,680 at the end of September.

The insured unemployment rate varied greatly across individual states and territories. In the week ended October 18, the highest unemployment rates were in New Jersey (2.14%), Washington (2.03%), California (1.93%), Massachusetts (1.84%), the District of Columbia (1.86%) and Connecticut (1.70%). The lowest were in South Dakota (0.25%), Florida (0.36%), North Carolina & Louisiana (0.41%), Nebraska (0.44%) and Virginia (0.49%). Rates in other notable states include New York (1.51%), Illinois (1.50%), Pennsylvania (1.39%), and Texas (1.11%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.

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- Decline in initial claims reverses earlier gain.
- Continuing claims move higher.
- State unemployment rates vary.

Economy in Brief: 2008

Jump to:

U.S. Small Business Optimism Stable, Near 1975 Low

Industrial Production Declines More Than Expected in Germany And U.K.: Increases in Norway

UK IP Trends Turn Lower

U.S. Gasoline Prices Up - Driving Down

U.S. Gasoline Prices Up - Driving Down

U.S. Initial Claims for Unemployment Insurance Surged

U.S. ISM Non-Manufacturing Index Lowest Since January, Pricing Power Surged

Service Sectors Are Weakening Across Europe