Robert Brusca

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412a.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>History tells us that gains this strong do not continue to
accelerate like this for very long. Already the sequential growth rates
are showing that the pace of growth is beginning to ebb even though the
12-month rates continue to accelerate. Despite that, the six- month
growth rates, the horizon on which the OECD prefers to evaluate its
indices, shows a slow down from the previous 6 months but still posts
strong rates of expansion. The whole of the OECD area is still
advancing at a rate of 8.6% over six months, the e-Zone is up at a 6.6%
pace and the US is up at a 10.5% pace. Japan alone is still
accelerating, to a pace of 8.6% over six months.</p>
<p>But economic recovery is not simply achieved by getting out of
the woods with a strong LEI reading. As we have seen, Europe is dogged
by debt problems from Greece to Portugal to Spain. The UK, in the midst
of elections, has posted some very erratic economic figures including a
recent spike in its PPI. Today Italy posted a sideways IP result with
output remaining flat month-to-month. By itself that does not sound so
bad, but Italy has a long way to go to restore output to its past cycle
peak level. So a month of no progress is not a good result.</p>
<p>The OECD data tell us, however, that results are improving
across the OECD area and that conditions in Japan are accelerating. For
the time being it is still good news but it is still not good enough
given all the post-cycle risks that continue to lurk and to chase after
the outlook.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="5" scope="col"><b>OECD
Trend-restored leading Indicators</b> </th>
</tr>
</thead>
<tbody>
<tr style="font-weight: bold;" class="odd">
<td style="text-align: center;" colspan="5">Growth
progression-SAAR</td>
</tr>
<tr>
<td class="firstcol">&nbsp;</td>
<td>3Mos</td>
<td>6Mos</td>
<td>12mos</td>
<td>Yr-Ago</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD</td>
<td style="color: red;">6.5%</td>
<td style="color: red;">8.6%</td>
<td>10.1%</td>
<td style="color: red;">-11.7%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td style="color: red;">6.7%</td>
<td style="color: red;">8.9%</td>
<td>10.2%</td>
<td style="color: red;">-12.9%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Ezone</td>
<td style="color: red;">3.5%</td>
<td style="color: red;">6.6%</td>
<td>9.8%</td>
<td style="color: red;">-12.1%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td style="color: red;">7.0%</td>
<td>8.6%</td>
<td>7.6%</td>
<td style="color: red;">-14.6%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD US</td>
<td style="color: red;">9.1%</td>
<td style="color: red;">10.5%</td>
<td>10.9%</td>
<td style="color: red;">-13.1%</td>
</tr>
<tr style="font-weight: bold;">
<td style="text-align: center;" colspan="5">Six
month readings at 6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Recent six</td>
<td>6Mo Ago</td>
<td>12Mo Ago</td>
<td>18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td style="color: red;">8.6%</td>
<td>11.6%</td>
<td style="color: red;">-14.1%</td>
<td style="color: red;">-9.2%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD7</td>
<td style="color: red;">8.9%</td>
<td>11.6%</td>
<td style="color: red;">-16.3%</td>
<td style="color: red;">-9.4%</td>
</tr>
<tr>
<td class="firstcol">OECD.Eur</td>
<td style="color: red;">6.6%</td>
<td>13.0%</td>
<td style="color: red;">-12.4%</td>
<td style="color: red;">-11.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">OECD.Japan</td>
<td>8.6%</td>
<td>6.6%</td>
<td style="color: red;">-21.1%</td>
<td style="color: red;">-7.6%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td style="color: red;">10.5%</td>
<td>11.2%</td>
<td style="color: red;">-17.6%</td>
<td style="color: red;">-8.3%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol"><span style="color: red; font-weight: bold;">Slowdowns</span><span style="color: red; font-weight: bold;"> </span>indicated
by BOLD RED</td>
</tr>
</tbody>
</table>
<span id="articletitle">Industrial Production In Five
Countries</span><br>
<span id="byline">by <a href="/comment/Curley.html">Louise
Curley</a> April 12, 2010</span>
<span id="articletext">
<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412b.jpg" style="width: 353px; height: 265px;" align="right">Five
countries--Italy, Ireland, India, Kazakhstan and Mexico--reported
February data on industrial production today.&nbsp; One, Kazakhstan
reported data for March.&nbsp;&nbsp; We have put the various
indexes on a common basis, 2003=100, so that growth of production can
be compared.&nbsp; Production in Italy in February, for example, at
84.8, was still well below its level of 100 in 2003.&nbsp; And
although production in Ireland has increased sharply in the last two
months, it is only 20% above its 2003 level after seven
years.&nbsp; Industrial production data in Italy and Ireland since
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412c.jpg" style="width: 353px; height: 265px;" align="right">2003
are shown in the first chart.</p>
<p> Industrial production in India and
Kazakhstan declined 0.25% and 0.68% in February from January, but it
has been increasing over the past year and is 15.0% and 10.4%,
respectively, ahead of January, 2009.&nbsp;&nbsp; Incidentally,
production in Kazakhstan rose in March.&nbsp; Both India and
Kazakhstan have grown strongly in the past seven years and production
is now 73% and 56%, respectively above their 2003 levels of
production.&nbsp;</p>
<p>In contrast to the performance of
industrial production in India and Kazakhstan, that in Mexico, the
other emerging country reporting today, has recently shown some
improvement but it has grown only 10% since 2003.&nbsp; Industrial
production data since 2003 for the three emerging countries are shown
in the second chart.</p><p> It should be noted that a common index base of
production among countries enables one to compare the growth of
production among countries, but it says nothing of the magnitude of
output in the various countries.&nbsp;&nbsp;&nbsp;&nbsp;</p>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col"><b>Industrail
Production
(2003=100)</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td><b>Feb 10&nbsp;</b></td>
<td><b>Jan 10&nbsp;</b></td>
<td><b>Feb 09</b></td>
<td><b>M/M % Chg</b></td>
<td><b>Y/Y % Chg</b></td>
<td><b>2009</b></td>
<td><b>2008</b></td>
<td><b>2007</b></td>
</tr>
<tr>
<td class="firstcol">India</td>
<td>172.5</td>
<td>172.9</td>
<td>149.9</td>
<td>-0.25</td>
<td>15.02</td>
<td>158.4</td>
<td>149.0</td>
<td>142.2</td>
</tr>
<tr>
<td class="firstcol">Kazakhstan</td>
<td>156.3*</td>
<td>157.4</td>
<td>141.6</td>
<td>-0.68</td>
<td>10.38</td>
<td>149.8</td>
<td>147.5</td>
<td>146.5</td>
</tr>
<tr>
<td class="firstcol">Mexico</td>
<td>110.3</td>
<td>109.5</td>
<td>105.6</td>
<td>0.55</td>
<td>4.45</td>
<td>106.1</td>
<td>114.0</td>
<td>115.0</td>
</tr>
<tr>
<td class="firstcol">Italy</td>
<td>84.8</td>
<td>84.8</td>
<td>83.5</td>
<td>0.00</td>
<td>2.95</td>
<td>82.4</td>
<td>100.8</td>
<td>104.8</td>
</tr>
<tr>
<td class="firstcol">Ireland</td>
<td>119.3</td>
<td>117.9</td>
<td>106.8</td>
<td>1.2</td>
<td>11.7</td>
<td>107.2</td>
<td>111.9</td>
<td>113.7</td>
</tr>
<tr class="odd">
<td colspan="9" class="firstcol">*March-159.2</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">Dating The U.S. Recession's End</span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> April 12, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412d.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412e.jpg" style="width: 312px; height: 265px;"></p>
<p>The Business Cycle Dating Committee at the National Bureau of
Economic Research indicated that it's premature to call an end to the
U.S. recession. Their latest communiqué can be found <a href="http://www.nber.org/cycles/april2010.html">here</a>.</p>
<p>Nevertheless, Haver Analytics has gone ahead and updated the
business cycle shading in its charts, primarily for two reasons. We
have chosen June 2009 as the end date for the recession: 1) The index
of coincident economic indicators, which includes data covering nonfarm
payrolls, industrial production, business sales and personal income,
troughed in June. 2) Real GDP growth has been positive since 3Q '09 and
likely was again positive last quarter. The 1Q data will be published
later this month.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100412g.jpg" style="width: 312px; height: 265px;">
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History tells us that gains this strong do not continue to accelerate like this for very long. Already the sequential growth rates are showing that the pace of growth is beginning to ebb even though the 12-month rates continue to [...]

OECD LEIs Show StrongestSynchronized Revival Since 1975 Expansion

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409f.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>UK MFG inflation trends are still running hot with the release
of the PPI for March. Commodity prices are still rising, adding to the
pressure with Brent prices up by 7% in the March and other commodity
prices rising as well. Coupled with weakness in sterling, inflation has
a real foothold in the UK. The BOE has an inflation ceiling but that
applies to its Consumer price measure, not the PPI. Still, with this
kind of pressure on producer prices it is hard to conclude that the CPI
will be out of the woods anytime soon.</p>
<p>In terms trends in the PPI, The various sequential rates of
growth all are elevating but the three month rate is below the six
month rate for both the core and the headline rates indicating that it
is not a pure acceleration for inflation But the Core rate is still
slightly above its Yr/Yr pace and that is not a good sign. Inflation
trends in the UK could be worse but they could be a lot better too.
There is not much in this report that is reassuring if you are at the
Bank of England trying to decide on policy.</p>
<p>On top of these poor trends there is also pressure from input
prices that were up exceptionally strongly in March. While the UK has
posted some better growth numbers recently the BOE is still helping the
markets with securities purchases. The last thing it needs is for
inflation to become more unstable. Inflation is already pushing the
limits of BOE tolerance for the CPI. Any further pressure would really
put the BOE between a rock and hard place.</p>
</span>

<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="8" scope="col"><b>UK PPI MFG net output prices</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%M/M</td>
<td colspan="4">%SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-moY-Ago</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.6%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.9%</td>
<td>6.7%</td>
<td>5.0%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Core</td>
<td>0.6%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>4.3%</td>
<td>5.1%</td>
<td>3.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Core: ex food
beverages, tobacco &amp; Petroleum</td>
</tr>
</tbody>
</table>
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UK MFG inflation trends are still running hot with the release of the PPI for March. Commodity prices are still rising, adding to the pressure with Brent prices up by 7% in the March and other commodity prices rising as well. Coupled [...]

UK PPI Surges – Not What The Doctor Ordered

Tom Moeller

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409c.jpg" style="width: 312px; height: 265px;"></p>
<p>The U.S. unemployment rate has lingered near 10% since last
summer. As if that's not bad enough news, the detail behind the total
paints a picture of an even graver economic situation. The current
range of the unemployment rate is 7%-to-47% in the U.S. depending on
age, race and sex. But many other variables matter greatly for the
level of unemployment amongst certain groups.</p>
<p>The unemployment rate for adults, aged 20 or over, currently
is 9.1%. That is lower than the total, but it's still more than double
the rate from 2005 to 2007. Here, however, is where a further breakdown
of the numbers reveals even more notable divergences in unemployment. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409a.jpg" style="border: 0px solid ; width: 312px; height: 265px; float: right;" align="left"> Let's begin by looking further at age. For
teenagers, the unemployment rate is a relatively high 26.1% and that's
up from roughly 15% in 2006. But the adult female unemployment rate is
a lower at 8.0%, though that is double the 2007 low. The adult male
unemployment rate is 10.0%, roughly equal to the total.</p>
<p>The figures by race versus age &amp; gender diverge
greatly. At the low end of the unemployment scale are white individuals
with an 8.8% rate, though that is more than double the average from
2005 to 2007. Again, the rate for adult females is lower at 7.3%,
compared to 8.9% for adult white men. For blacks, the numbers rise
significantly. The unemployment rate amongst blacks and African
Americans is up to 16.5% from the 8.3% low in 2007. Again, female black
unemployment is lower than that of males at 13.2%, compared to 20.2%
for men. But the grown-ups, as usual, are better off. Unemployment
amongst adult blacks amounted to 15.5%. Though that was double the 2007
low, the rate for black teenagers was an eye-popping 41.1%. If you're
male and a teen the rate jumps higher to 47.4% from 32.5% in 2006.</p>
<p>As might be expected, the level of educational attainment
matters when it some to employment. The unemployment rate for
individuals who either took some college courses (8.2%) or received a
BA or higher (4.9%) suggest that preparation for a professional career
pays off. These numbers ignore, of course, the payoff to folks who
seriously prepare for a skilled-labor position. For adults with less
than a high school diploma, the relatively high unemployment rate of
14.5% is up from the 7.0% low in 2006-07.</p>
<p>Unemployment data are available in Haver's <b>USECON</b>
&amp; <b>EMPL</b> databases.</p>
<p><b>The Labor Market in the Great Recession </b>from
the Federal Reserve Bank of San Francisco is available here <a href="http://www.frbsf.org/publications/economics/papers/2010/wp10-07bk.pdf">here</a>.</p>
<p><b>The Economic Outlook</b> is the title of
yesterday's speech by Fed Vice Chairman Donald L. Kohn and it can be
found here <a href="http://www.federalreserve.gov/newsevents/speech/kohn20100408a.htm">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409d.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409e.jpg" style="width: 312px; height: 265px;">&gt;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Unemployment
Rate (%)</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>March '09</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>9.7</td>
<td>9.7</td>
<td>9.7</td>
<td>8.6</td>
<td>9.3</td>
<td>5.8</td>
<td>4.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 16-19 Years</td>
<td>26.1</td>
<td>25.0</td>
<td>26.4</td>
<td>22.0</td>
<td>24.3</td>
<td>18.7</td>
<td>15.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>23.7</td>
<td>22.5</td>
<td>23.5</td>
<td>20.3</td>
<td>21.9</td>
<td>16.7</td>
<td>13.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>41.1</td>
<td>42.0</td>
<td>43.8</td>
<td>33.1</td>
<td>39.6</td>
<td>31.2</td>
<td>29.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 20 Years &amp;
Over</td>
<td>9.1</td>
<td>9.1</td>
<td>9.0</td>
<td>8.0</td>
<td>8.7</td>
<td>5.2</td>
<td>4.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>8.1</td>
<td>8.2</td>
<td>8.1</td>
<td>7.4</td>
<td>7.9</td>
<td>4.7</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>15.5</td>
<td>14.8</td>
<td>15.3</td>
<td>12.7</td>
<td>13.7</td>
<td>9.1</td>
<td>7.2</td>
</tr>
</tbody>
</table>
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The U.S. unemployment rate has lingered near 10% since last summer. As if that's not bad enough news, the detail behind the total paints a picture of an even graver economic situation. The current range of the unemployment rate is [...]

U.S. Unemployment By Age, Race,Gender & Schooling

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<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409c.jpg" style="width: 312px; height: 265px;"></p>
<p>The U.S. unemployment rate has lingered near 10% since last
summer. As if that's not bad enough news, the detail behind the total
paints a picture of an even graver economic situation. The current
range of the unemployment rate is 7%-to-47% in the U.S. depending on
age, race and sex. But many other variables matter greatly for the
level of unemployment amongst certain groups.</p>
<p>The unemployment rate for adults, aged 20 or over, currently
is 9.1%. That is lower than the total, but it's still more than double
the rate from 2005 to 2007. Here, however, is where a further breakdown
of the numbers reveals even more notable divergences in unemployment. <img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409a.jpg" style="border: 0px solid ; width: 312px; height: 265px; float: right;" align="left"> Let's begin by looking further at age. For
teenagers, the unemployment rate is a relatively high 26.1% and that's
up from roughly 15% in 2006. But the adult female unemployment rate is
a lower at 8.0%, though that is double the 2007 low. The adult male
unemployment rate is 10.0%, roughly equal to the total.</p>
<p>The figures by race versus age &amp; gender diverge
greatly. At the low end of the unemployment scale are white individuals
with an 8.8% rate, though that is more than double the average from
2005 to 2007. Again, the rate for adult females is lower at 7.3%,
compared to 8.9% for adult white men. For blacks, the numbers rise
significantly. The unemployment rate amongst blacks and African
Americans is up to 16.5% from the 8.3% low in 2007. Again, female black
unemployment is lower than that of males at 13.2%, compared to 20.2%
for men. But the grown-ups, as usual, are better off. Unemployment
amongst adult blacks amounted to 15.5%. Though that was double the 2007
low, the rate for black teenagers was an eye-popping 41.1%. If you're
male and a teen the rate jumps higher to 47.4% from 32.5% in 2006.</p>
<p>As might be expected, the level of educational attainment
matters when it some to employment. The unemployment rate for
individuals who either took some college courses (8.2%) or received a
BA or higher (4.9%) suggest that preparation for a professional career
pays off. These numbers ignore, of course, the payoff to folks who
seriously prepare for a skilled-labor position. For adults with less
than a high school diploma, the relatively high unemployment rate of
14.5% is up from the 7.0% low in 2006-07.</p>
<p>Unemployment data are available in Haver's <b>USECON</b>
&amp; <b>EMPL</b> databases.</p>
<p><b>The Labor Market in the Great Recession </b>from
the Federal Reserve Bank of San Francisco is available here <a href="http://www.frbsf.org/publications/economics/papers/2010/wp10-07bk.pdf">here</a>.</p>
<p><b>The Economic Outlook</b> is the title of
yesterday's speech by Fed Vice Chairman Donald L. Kohn and it can be
found here <a href="http://www.federalreserve.gov/newsevents/speech/kohn20100408a.htm">here</a>.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409d.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409e.jpg" style="width: 312px; height: 265px;">&gt;
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Unemployment
Rate (%)</b></th>
<th scope="col"><b>March</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>March '09</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>9.7</td>
<td>9.7</td>
<td>9.7</td>
<td>8.6</td>
<td>9.3</td>
<td>5.8</td>
<td>4.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 16-19 Years</td>
<td>26.1</td>
<td>25.0</td>
<td>26.4</td>
<td>22.0</td>
<td>24.3</td>
<td>18.7</td>
<td>15.7</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>23.7</td>
<td>22.5</td>
<td>23.5</td>
<td>20.3</td>
<td>21.9</td>
<td>16.7</td>
<td>13.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>41.1</td>
<td>42.0</td>
<td>43.8</td>
<td>33.1</td>
<td>39.6</td>
<td>31.2</td>
<td>29.4</td>
</tr>
<tr>
<td class="firstcol">&nbsp; 20 Years &amp;
Over</td>
<td>9.1</td>
<td>9.1</td>
<td>9.0</td>
<td>8.0</td>
<td>8.7</td>
<td>5.2</td>
<td>4.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
White</td>
<td>8.1</td>
<td>8.2</td>
<td>8.1</td>
<td>7.4</td>
<td>7.9</td>
<td>4.7</td>
<td>3.6</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;
Black or African American</td>
<td>15.5</td>
<td>14.8</td>
<td>15.3</td>
<td>12.7</td>
<td>13.7</td>
<td>9.1</td>
<td>7.2</td>
</tr>
</tbody>
</table>
<span id="articletitle">UK PPI Surges &#8211; Not What The
Doctor Ordered</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> April 9, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100409f.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>UK MFG inflation trends are still running hot with the release
of the PPI for March. Commodity prices are still rising, adding to the
pressure with Brent prices up by 7% in the March and other commodity
prices rising as well. Coupled with weakness in sterling, inflation has
a real foothold in the UK. The BOE has an inflation ceiling but that
applies to its Consumer price measure, not the PPI. Still, with this
kind of pressure on producer prices it is hard to conclude that the CPI
will be out of the woods anytime soon.</p>
<p>In terms trends in the PPI, The various sequential rates of
growth all are elevating but the three month rate is below the six
month rate for both the core and the headline rates indicating that it
is not a pure acceleration for inflation But the Core rate is still
slightly above its Yr/Yr pace and that is not a good sign. Inflation
trends in the UK could be worse but they could be a lot better too.
There is not much in this report that is reassuring if you are at the
Bank of England trying to decide on policy.</p>
<p>On top of these poor trends there is also pressure from input
prices that were up exceptionally strongly in March. While the UK has
posted some better growth numbers recently the BOE is still helping the
markets with securities purchases. The last thing it needs is for
inflation to become more unstable. Inflation is already pushing the
limits of BOE tolerance for the CPI. Any further pressure would really
put the BOE between a rock and hard place.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col"><b>UK PPI MFG
net output prices</b> </th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">%M/M</td>
<td colspan="4">%SAAR</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Mar-10</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>12-moY-Ago</td>
</tr>
<tr>
<td class="firstcol">MFG</td>
<td>0.6%</td>
<td>0.4%</td>
<td>0.2%</td>
<td>4.9%</td>
<td>6.7%</td>
<td>5.0%</td>
<td>2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Core</td>
<td>0.6%</td>
<td>0.3%</td>
<td>0.2%</td>
<td>4.3%</td>
<td>5.1%</td>
<td>3.6%</td>
<td>3.2%</td>
</tr>
<tr>
<td colspan="8" class="firstcol">Core: ex
food
beverages, tobacco &amp; Petroleum</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Unemployment By Age,Race,Gender & Schooling

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<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Euro consumer is not helping to lead growth to the
Promised Land. Retail sales came up lame in February after rising by
just the thinnest margin of 0.1% in January. The growth rate for retail
sales is steady over 3-and 6-months at under 1.5% in nominal terms. The
lift from auto sales is going, going gone as purchase incentive plans
have ended and the bulge in vehicle registrations is unwinding fast.
Retail sales in Germany, the big EMU economy, are off for two months in
a row. There is no leadership there.</p>
<p>Greece&#8217;s problems continue to worsen and to hang over growth
prospects for the Zone. No one is sure just what will happen, but
speculation is rife and that makes things worse. The German hard line
on Greece that delivers election protection to Angelina Merkel can&#8217;t
make the Zone look like a very attractive place to be. The cry we heard
in the past, &#8217;we are all Europeans now,&#8217; rings hollow. They are all
Europeans until a crisis hits then they are German, French, Greek and
etc. For now Greek bonds are suffering their widest spreads to bunds
since EMU was formed; credit default protection is getting to be very
expensive for Greek paper. A few market pundits push for Greece to
default but for the most part that is a fringe faction. Most realize
the potential dangers from such an event and the risk of knock-on
effects from having Greece actually default. Just think of the US and
what happened when Lehman Brothers failed. It is often hard to predict
the fallout from such events; German banks already hold a lot of Greek
bonds on their balance sheets.</p>
<p>Meanwhile the Germans are being tough on Greece. One must
wonder if Greece at some point does not simply succumb to the pressure
and call the German bluff and let the forces of default begin to run
their course, forcing Germany to either to deal with the fallout of
default or to back Greece more solidly. In the meantime the Greek
tragedy plays out as one of Europe&#8217;s longest running sold-out
performances. Uncertainty about Greece continues to adversely impact
growth in the Zone.</p>
<p>The main bright news for Europe has come from the UK where
industrial output has risen strongly (compared to flat output in
Germany this month) and rising home prices. The Bank of England is
continuing to given the markets there assistance with securities
purchases. Still growth in the UK is less than stellar, that&#8217;s why the
BOE is still providing market support after all.</p>
<p>The US recovery is looking better&#8230; then bleaker. While the
data clearly have improved, the jobless claims report from the current
week has shot up to a five-week high making it clear that jobs growth
is mounting no head of steam in the wake of the March jobs report. It&#8217;s
time to go back to playing fantasy baseball, not fantasy recovery. The
Fed Chairman is making it clear that job growth is not significantly in
gear, dashing the value of any analysis that was arguing that the Fed
is on the brink of a rate hike after one lukewarm job report.</p>
<p>Clearly the global economy is still sputtering. While the US
expansion seems to be the strongest that is in train; it continues to
be unable to get the various jobs metrics on the right path together
with any speed. Consumers remain the key to the global recovery since
there are many nations with the ability to supply goods. Germany and
China and Japan are exporting again. The US is exporting, too. But
exports need consumers, and consumers are holding back, especially in
Europe. Investment demand is not enough by itself to drive the kind of
recovery that the world needs.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"><b>Euro-Area
Retail
Sales</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/M</td>
<td colspan="3">Saar</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.2%</td>
<td>1.4%</td>
<td>1.3%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.1%</td>
<td>-2.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>2.6%</td>
<td>-0.8%</td>
<td>-3.0%</td>
<td>-5.0%</td>
<td>-1.0%</td>
<td>5.6%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">NonFood
Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>-0.4%</td>
<td>-0.5%</td>
<td>1.0%</td>
<td>0.4%</td>
<td>0.8%</td>
<td>-0.9%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>2.1%</td>
<td>-3.0%</td>
<td>-0.2%</td>
<td>-4.5%</td>
<td>-0.7%</td>
<td>3.4%</td>
</tr>
</tbody>
</table>
</body></html>

The Euro consumer is not helping to lead growth to the Promised Land. Retail sales came up lame in February after rising by just the thinnest margin of 0.1% in January. The growth rate for retail sales is steady over 3-and 6-months at [...]

Euro-Consumer Remains Sluggish

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Earlier improvement in the labor market paused last week,
according to the Bureau of Labor Statistics. Initial claims for jobless
insurance rose 18,000 to 460,000, the highest level in five weeks. The
increase followed a 3,000 decline during the prior week which was half
that reported initially. Nevertheless, the latest level is down from
the recession peak of 651,000 reached in March of 2009. Last week's
level exceeded Consensus expectations for 435,000 new claims but the
four-week moving average of initial claims rose just slightly to
450,250.</p>
<p>Continuing claims for unemployment insurance during the latest
week fell to a new cycle low and are down by one-third since the
late-June peak. The overall decline is a function of the improved job
market but also reflects the exhaustion of 26 weeks of unemployment
benefits. Continuing claims provide an indication of workers' ability
to find employment. The four-week average of continuing claims also
fell to a cycle low of 4.648 mil. This series dates back to 1966.</p>
<p>Extended benefits for unemployment insurance rose by
more-than-one half w/w to 214,393. Nevertheless, they were down by
two-thirds from a peak of 597,688 reached in November.Each state
administers a separate unemployment insurance program within guidelines
established by Federal law. Benefit amounts and the length of time
benefits are received are determined by state law. For example, in
Michigan and New York, an additional 73 weeks of benefits are available
while in California an additional 79 weeks are available.</p>
<p>The insured unemployment rate slipped to 3.5% after five weeks
at 3.6%. The rate reached a high of 4.9% during May. During the last
ten years, there has been a 96% correlation between the level of the
insured unemployment rate and the overall rate of unemployment
published by the Bureau of Labor Statistics.</p>
<p>The highest insured unemployment rates in the week ending
March 19 were in Alaska (7.1% percent), Oregon (6.0), Wisconsin (5.7),
Pennsylvania (5.4), Michigan (5.4), Nevada (5.3), North Carolina (5.0)
and Connecticut (5.0). The lowest insured unemployment rates were in
Virginia (2.0), Texas (2.3), Georgia (3.0), Florida (3.2), Wyoming
(3.4), Maryland (3.4), Ohio (3.5), New York (3.9) and Maine (4.2).
These data are not seasonally adjusted but the overall insured
unemployment rate is.</p>
<p>The unemployment insurance claims data is available in Haver's
<b>WEEKLY</b> database and the state data is in the <b>REGIONW</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b>04/02/10</b></th>
<th scope="col"><b>03/26/10</b></th>
<th scope="col"><b>03/19/10</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>460</td>
<td>442</td>
<td>445</td>
<td>-28.5%</td>
<td>572</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,550</td>
<td>4,681</td>
<td>-22.1%</td>
<td>5,809</td>
<td>3,340</td>
<td>2,549</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.5</td>
<td>3.6</td>
<td>4.6 (4/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</body></html>

Earlier improvement in the labor market paused last week, according to the Bureau of Labor Statistics. Initial claims for jobless insurance rose 18,000 to 460,000, the highest level in five weeks. The increase followed a 3,000 decline [...]

U.S. Initial Unemployment Insurance Claims Increase

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408a.jpg" style="border: 0px solid ; width: 363px; height: 265px; float: left;" align="left"></p>
<p>Consumer borrowing continued its retrenchment during February.
Consumer credit outstanding fell $11.5B, reversing a revised $10.6B
January increase which was much larger than reported last month. The
Federal Reserve reported late-Wednesday that the resultant 4.0% y/y
decline in credit outstanding remained near the record. During the last
ten years, there has been a 60% correlation between the y/y change in
credit outstanding and the change in personal consumption expenditures.</p>
<p>Usage of revolving credit was cut sharply. The $9.5B drop
followed a modest January increase and left usage down a near-record
9.1% y/y. Versus February 2009, finance companies lowered lending by
14.3%, commercial bank lending fell 12.7%, pools of securitized assets
fell 7.4%. Loans from credit unions offset some of these declines with
a 6.5% increase while savings institution raised lending 1.6%.</p>
<p>Increased usage of non-revolving credit (autos &amp; other
consumer durables), which accounts for nearly two-thirds of the total,
fell a moderate $2.0B following a sharp $9.1B January gain. The 1.1%
y/y decline is clearly modest relative to the cutback in revolving
credit and it has been stable at that rate since the middle of last
year. Federal government &amp; Sallie Mae lending expanded by
nearly three-quarters y/y during February. That increase offset a 14.5%
decline in pools of securitized assets, a 13.7% fall in savings
institutions, an 11.8% decline in finance companies, a 2.8% fall in
credit union lending and a 0.1% downtick in commercial bank lending.</p>
<p>These figures are the major input to the Fed's quarterly Flow
of Funds accounts for the household sector.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Consumer
Credit Outstanding (m/m Chg, SAAR)</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-11.5B</td>
<td>$10.6B</td>
<td>$-7.5B</td>
<td>-4.0%</td>
<td>-4.4%</td>
<td>1.5%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-9.5B</td>
<td>$1.5B</td>
<td>$-9.4B</td>
<td>-9.1%</td>
<td>-9.6%</td>
<td>1.6%</td>
<td>8.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-2.0B</td>
<td>$9.1B</td>
<td>$1.9B</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>1.5%</td>
<td>4.4%</td>
</tr>
</tbody>
</table>
</body></html>

Consumer borrowing continued its retrenchment during February. Consumer credit outstanding fell $11.5B, reversing a revised $10.6B January increase which was much larger than reported last month. The Federal Reserve reported late- [...]

U.S. Consumer Credit Decline Reverses Earlier Gain

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<body>
<br>

<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408a.jpg" style="border: 0px solid ; width: 363px; height: 265px; float: left;" align="left"></p>
<p>Consumer borrowing continued its retrenchment during February.
Consumer credit outstanding fell $11.5B, reversing a revised $10.6B
January increase which was much larger than reported last month. The
Federal Reserve reported late-Wednesday that the resultant 4.0% y/y
decline in credit outstanding remained near the record. During the last
ten years, there has been a 60% correlation between the y/y change in
credit outstanding and the change in personal consumption expenditures.</p>
<p>Usage of revolving credit was cut sharply. The $9.5B drop
followed a modest January increase and left usage down a near-record
9.1% y/y. Versus February 2009, finance companies lowered lending by
14.3%, commercial bank lending fell 12.7%, pools of securitized assets
fell 7.4%. Loans from credit unions offset some of these declines with
a 6.5% increase while savings institution raised lending 1.6%.</p>
<p>Increased usage of non-revolving credit (autos &amp; other
consumer durables), which accounts for nearly two-thirds of the total,
fell a moderate $2.0B following a sharp $9.1B January gain. The 1.1%
y/y decline is clearly modest relative to the cutback in revolving
credit and it has been stable at that rate since the middle of last
year. Federal government &amp; Sallie Mae lending expanded by
nearly three-quarters y/y during February. That increase offset a 14.5%
decline in pools of securitized assets, a 13.7% fall in savings
institutions, an 11.8% decline in finance companies, a 2.8% fall in
credit union lending and a 0.1% downtick in commercial bank lending.</p>
<p>These figures are the major input to the Fed's quarterly Flow
of Funds accounts for the household sector.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408b.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408c.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Consumer
Credit Outstanding (m/m Chg, SAAR)</b></th>
<th scope="col"><b>February</b></th>
<th scope="col"><b>January</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-11.5B</td>
<td>$10.6B</td>
<td>$-7.5B</td>
<td>-4.0%</td>
<td>-4.4%</td>
<td>1.5%</td>
<td>5.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-9.5B</td>
<td>$1.5B</td>
<td>$-9.4B</td>
<td>-9.1%</td>
<td>-9.6%</td>
<td>1.6%</td>
<td>8.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-2.0B</td>
<td>$9.1B</td>
<td>$1.9B</td>
<td>-1.1%</td>
<td>-1.3%</td>
<td>1.5%</td>
<td>4.4%</td>
</tr>
</tbody>
</table>
<span id="articletitle">U.S. Initial Unemployment
Insurance Claims Increase </span><br>
<span id="byline">by <a href="/comment/Moeller.html">Tom
Moeller</a> April 8, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>Earlier improvement in the labor market paused last week,
according to the Bureau of Labor Statistics. Initial claims for jobless
insurance rose 18,000 to 460,000, the highest level in five weeks. The
increase followed a 3,000 decline during the prior week which was half
that reported initially. Nevertheless, the latest level is down from
the recession peak of 651,000 reached in March of 2009. Last week's
level exceeded Consensus expectations for 435,000 new claims but the
four-week moving average of initial claims rose just slightly to
450,250.</p>
<p>Continuing claims for unemployment insurance during the latest
week fell to a new cycle low and are down by one-third since the
late-June peak. The overall decline is a function of the improved job
market but also reflects the exhaustion of 26 weeks of unemployment
benefits. Continuing claims provide an indication of workers' ability
to find employment. The four-week average of continuing claims also
fell to a cycle low of 4.648 mil. This series dates back to 1966.</p>
<p>Extended benefits for unemployment insurance rose by
more-than-one half w/w to 214,393. Nevertheless, they were down by
two-thirds from a peak of 597,688 reached in November.Each state
administers a separate unemployment insurance program within guidelines
established by Federal law. Benefit amounts and the length of time
benefits are received are determined by state law. For example, in
Michigan and New York, an additional 73 weeks of benefits are available
while in California an additional 79 weeks are available.</p>
<p>The insured unemployment rate slipped to 3.5% after five weeks
at 3.6%. The rate reached a high of 4.9% during May. During the last
ten years, there has been a 96% correlation between the level of the
insured unemployment rate and the overall rate of unemployment
published by the Bureau of Labor Statistics.</p>
<p>The highest insured unemployment rates in the week ending
March 19 were in Alaska (7.1% percent), Oregon (6.0), Wisconsin (5.7),
Pennsylvania (5.4), Michigan (5.4), Nevada (5.3), North Carolina (5.0)
and Connecticut (5.0). The lowest insured unemployment rates were in
Virginia (2.0), Texas (2.3), Georgia (3.0), Florida (3.2), Wyoming
(3.4), Maryland (3.4), Ohio (3.5), New York (3.9) and Maine (4.2).
These data are not seasonally adjusted but the overall insured
unemployment rate is.</p>
<p>The unemployment insurance claims data is available in Haver's
<b>WEEKLY</b> database and the state data is in the <b>REGIONW</b>
database.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408e.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408f.jpg" style="width: 312px; height: 265px;">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b><a ;="" href="http://www.haverselect.com/dlx/WEEKLY/@W5/@W507/@W507.HTM">Unemployment
Insurance (000s)</a></b></th>
<th scope="col"><b>04/02/10</b></th>
<th scope="col"><b>03/26/10</b></th>
<th scope="col"><b>03/19/10</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2009</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Initial Claims</td>
<td>460</td>
<td>442</td>
<td>445</td>
<td>-28.5%</td>
<td>572</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,550</td>
<td>4,681</td>
<td>-22.1%</td>
<td>5,809</td>
<td>3,340</td>
<td>2,549</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.5</td>
<td>3.6</td>
<td>4.6 (4/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
<span id="articletitle">Euro-Consumer Remains Sluggish</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> April 8, 2010</span>
<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100408g.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Euro consumer is not helping to lead growth to the
Promised Land. Retail sales came up lame in February after rising by
just the thinnest margin of 0.1% in January. The growth rate for retail
sales is steady over 3-and 6-months at under 1.5% in nominal terms. The
lift from auto sales is going, going gone as purchase incentive plans
have ended and the bulge in vehicle registrations is unwinding fast.
Retail sales in Germany, the big EMU economy, are off for two months in
a row. There is no leadership there.</p>
<p>Greece&#8217;s problems continue to worsen and to hang over growth
prospects for the Zone. No one is sure just what will happen, but
speculation is rife and that makes things worse. The German hard line
on Greece that delivers election protection to Angelina Merkel can&#8217;t
make the Zone look like a very attractive place to be. The cry we heard
in the past, &#8217;we are all Europeans now,&#8217; rings hollow. They are all
Europeans until a crisis hits then they are German, French, Greek and
etc. For now Greek bonds are suffering their widest spreads to bunds
since EMU was formed; credit default protection is getting to be very
expensive for Greek paper. A few market pundits push for Greece to
default but for the most part that is a fringe faction. Most realize
the potential dangers from such an event and the risk of knock-on
effects from having Greece actually default. Just think of the US and
what happened when Lehman Brothers failed. It is often hard to predict
the fallout from such events; German banks already hold a lot of Greek
bonds on their balance sheets.</p>
<p>Meanwhile the Germans are being tough on Greece. One must
wonder if Greece at some point does not simply succumb to the pressure
and call the German bluff and let the forces of default begin to run
their course, forcing Germany to either to deal with the fallout of
default or to back Greece more solidly. In the meantime the Greek
tragedy plays out as one of Europe&#8217;s longest running sold-out
performances. Uncertainty about Greece continues to adversely impact
growth in the Zone.</p>
<p>The main bright news for Europe has come from the UK where
industrial output has risen strongly (compared to flat output in
Germany this month) and rising home prices. The Bank of England is
continuing to given the markets there assistance with securities
purchases. Still growth in the UK is less than stellar, that&#8217;s why the
BOE is still providing market support after all.</p>
<p>The US recovery is looking better&#8230; then bleaker. While the
data clearly have improved, the jobless claims report from the current
week has shot up to a five-week high making it clear that jobs growth
is mounting no head of steam in the wake of the March jobs report. It&#8217;s
time to go back to playing fantasy baseball, not fantasy recovery. The
Fed Chairman is making it clear that job growth is not significantly in
gear, dashing the value of any analysis that was arguing that the Fed
is on the brink of a rate hike after one lukewarm job report.</p>
<p>Clearly the global economy is still sputtering. While the US
expansion seems to be the strongest that is in train; it continues to
be unable to get the various jobs metrics on the right path together
with any speed. Consumers remain the key to the global recovery since
there are many nations with the ability to supply goods. Germany and
China and Japan are exporting again. The US is exporting, too. But
exports need consumers, and consumers are holding back, especially in
Europe. Investment demand is not enough by itself to drive the kind of
recovery that the world needs.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="7" scope="col"><b>Euro-Area
Retail
Sales</b>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="3">M/M</td>
<td colspan="3">Saar</td>
</tr>
<tr class="grey2">
<td class="firstcol">&nbsp;</td>
<td>Feb-10</td>
<td>Jan-10</td>
<td>Dec-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>0.0%</td>
<td>0.1%</td>
<td>0.2%</td>
<td>1.4%</td>
<td>1.3%</td>
<td>-0.5%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</td>
<td>-0.1%</td>
<td>-0.1%</td>
<td>-0.2%</td>
<td>-1.8%</td>
<td>-2.1%</td>
<td>-2.1%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>2.6%</td>
<td>-0.8%</td>
<td>-3.0%</td>
<td>-5.0%</td>
<td>-1.0%</td>
<td>5.6%</td>
</tr>
<tr class="odd">
<td colspan="7" class="firstcol">NonFood
Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>-0.4%</td>
<td>-0.5%</td>
<td>1.0%</td>
<td>0.4%</td>
<td>0.8%</td>
<td>-0.9%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>2.1%</td>
<td>-3.0%</td>
<td>-0.2%</td>
<td>-4.5%</td>
<td>-0.7%</td>
<td>3.4%</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Consumer Credit DeclineReverses Earlier Gain

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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250502A5.jpg

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Nonfarm payrolls increased 177,000 (1.2% y/y) during April after rising 185,000 in March, revised from 228,000, and 102,000 in February, revised from 117,000. Expectations had been for a 130,000 rise in the Action Economics Forecast Survey. The latest figure left the three-month average change at 155,000 in April, down from 232,000 in January.

Average hourly earnings rose 0.2% during April after unrevised increases of 0.3% in March and 0.2% in February. Earnings growth of 3.8% y/y was below the 5.9% high in March 2022.

The unemployment rate, measured in the household survey, held m/m at an expected 4.2% in April, and compared to 4.1% in February and 4.0% in January. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, eased to 7.8% in April from 7.9% in March.

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

- Job growth spreads across most sectors.
- Earnings growth trend decelerates.
- Jobless rate holds steady.

U.S. Job Growth Is Firm in April but March Gain Is Lessened

Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

250501Z1.jpg

**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

250501Z2.jpg

**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

250501Z3.jpg

**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

250501Z4.jpg

**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

250501Z5.jpg

**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

250501Z6.jpg

Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

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Charts of the Week: Tariff Truce, Tenuous Trust

250501F20.jpg

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U.S. light vehicle sales dropped 2.9% (+6.5% y/y) to 17.31 million units (SAAR) in April after surging 10.8% to 17.82 million units in March. The retreat in April vehicle sales accompanied a 1.7% y/y rise in real disposable income through March, which compared to 2.0% growth last year.

Sales declines were broad-based last month. Light truck sales fell 1.3% (+9.9% y/y) during April to 14.34 million units (SAAR), after rising 12.4% in March. Purchases of domestically-made light trucks declined 1.2% (+11.9% y/y) to 11.02 million units, after jumping 12.5% in March. Sales of imported light trucks fell 1.8% (+4.4% y/y) to 3.32 million units, following an 11.6% March surge.

Trucks’ record 82.8% share of the light vehicle market last month compared to 81.5% in March and 80.3% in April of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales also declined last month, down 9.5% (-7.5%) to 2.97 million units (SAAR) following a 3.5% March rise. The decline reversed all of the increase over the prior two months. Purchases of domestically-produced cars fell 9.8% (-4.3% y/y) last month to 2.22 million units, after rising 3.8% in March. Sales of imported autos declined 9.6% (-15.7% y/y) to 0.75 million units, following a 2.5% March increase.

Imports' 23.5% share of the U.S. light vehicle market was little changed from 23.6% in March and compared to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market held steady at 25.3% last month and compared to 27.7% in April of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.2% last month after falling to 23.3% in March.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the I**NDUSTRY** database.

250501H20.jpg

250501I20.jpg

- Light truck sales pull back, while auto sales tumble.
- Both domestic and imported sales decline.
- Imports' market share slips further.

U.S. Light Vehicle Sales Fall in April

250501J5.jpg

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The ISM Purchasing Managers Index of activity in the manufacturing sector slipped to 48.7 in April from 49.0 during March and 50.3 in February. It remained up from a low of 46.9 in October of last year. A level of 50 is the break-even point between a rising and falling level of activity. The Action Economics Forecast Survey expected a reading of 47.8 for April. The series reached a monthly high of 63.8 in March 2021.

Two of the five component indexes weakened last month. The April production index fell to 44.0 after declining to 48.3 in March. It was the lowest level since May 2020. A lessened 19.8% (NSA) of respondents reported higher production while an increased 24.2% reported lower output. The inventories index declined to 50.8 last month from 53.4 in March. The index remained up from a low of 43.2 in October of last year.

Moving higher, the new orders index rose to 47.2 last month from 45.2 in March. The index remained below a January high of 55.1. Twenty-eight percent (NSA) of respondents reported higher new orders while 26.7% reported a decline. The employment index rose to 46.5 from 44.7 in March. It was below a high of 50.3 in January. A greater 13.1% (NSA) of respondents reported more hiring while a fewer 16.2% indicated less. The supplier delivery index rose to 55.2 from 53.5 in March. A higher 16.6% (NSA) of respondents reported slower delivery speeds while a fairly steady 6.2% reported a quickening.

The prices index, which is not part of the composite series, edged up to 69.8 (NSA) in April after increasing to 69.4 in March. It was the highest level since June 2022, up from a December 2022 low of 39.4. An increased 49.2% of respondents reported higher prices last month, up from 12.2% in November, while a higher 9.7% reported lower prices.

In other series, the export orders index plummeted to 43.1 in April from 49.6 during March. It was down from the high of 52.4 in January. The imports index fell sharply to 47.1 from 50.1 in March. It was the lowest reading since December 2023. The order backlog index dropped to 43.7 (NSA) last month from 44.5 in March. It was the lowest level in five months.

The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

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- Declines in last three months follow earlier improvement.
- Production & inventories account for m/m shortfall.
- Prices index edges up to another three-year high.

U.S. ISM Manufacturing Index Indicates Contraction in April

Winnie Tapasanun

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The value of construction put in place unexpectedly fell 0.5% m/m in March after rises of 0.6% in February (+0.7% initially) and 0.1% in January (-0.5% previously), data from the U.S. Census Bureau showed. The March reading was the first m/m fall following five straight m/m gains. A 0.3% m/m March rise had been expected in the Action Economics Forecast Survey. The year-on-year rate of increase decelerated to 2.8% in March, the lowest since May 2019, after registering at 3.4% in February and January. The latest y/y figure was lower than 8.7% in March 2024; thus, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.

Private construction slid 0.6% (+2.3% y/y) in March, down for the first time since September, following increases of 0.7% in February (+0.9% initially) and 0.1% in January (-0.7% previously). Residential private construction fell 0.4% (+2.8% y/y) in March, the first m/m fall in six months, after an unrevised 1.3% gain in February. Home improvement building dropped 1.2% (+13.4% y/y), the first m/m decline since December, following a 2.3% February gain; it was 41.1% of the residential private construction. Single-family building edged up 0.1% (-0.8% y/y), the smallest of seven consecutive m/m increases, after a 0.8% February rise; it was 46.6% of the residential private construction. Meanwhile, multi-family building was essentially unchanged m/m (-12.1% y/y) in March following 15 straight m/m decreases; it was 12.3% of the residential private construction.

Nonresidential private construction fell 0.8% (+1.6% y/y) in March after a 0.1% increase in February (+0.4% initially) and a 0.1% easing in January (-0.2% previously). The March fall reflected m/m drops in the following nonresidential private constructions. These included religious (-2.9%; +16.4% y/y), health care (-2.2%; -5.2% y/y), office (-1.8%; +2.7% y/y), educational (-1.7%; -4.2% y/y), lodging (-1.6%; -1.0% y/y), commercial (-1.0%; -5.8% y/y), manufacturing (-0.4%; +3.6% y/y), communication (-0.3%; +2.2% y/y), and utilities (-0.1%; +7.0% y/y). In contrast, private constructions for amusement & recreation (1.5%; 7.0% y/y) and transportation (0.7%; 10.2% y/y) rose m/m in March.

The value of public construction declined 0.2% (+4.7% y/y) in March after holding steady in February (+0.2% initially), reflecting a 0.2% increase (-1.9% y/y) in residential public construction and a 0.2% easing (+4.8% y/y) in nonresidential public construction. The March decline reflected m/m drops in the following nonresidential public constructions. These included utilities (-4.8%; -12.8% y/y), commercial (-1.6%; +40.3% y/y), amusement & recreation (-1.0%; +19.1% y/y), educational (-0.6%; +7.6% y/y), sewage & waste disposal (-0.6%; +10.6% y/y), and health care (-0.4%; +13.0% y/y). Notably, spending on highways & streets, which made up 28.7% of public construction spending, fell 0.5% (-2.4% y/y) in March, the first m/m fall since October, following a 0.9% increase in February. To the upside, the following public constructions rose m/m in March: office (1.6%; 6.0% y/y), transportation (1.4%; 7.3% y/y), public safety (0.7%; 4.1% y/y), conservation & development (0.6%; 4.7% y/y), and water supply (0.6%; 12.2% y/y).

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

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- March construction spending -0.5% m/m; +2.8% y/y, the lowest y/y rate since May ’19.
- Residential private construction -0.4% m/m, led by a 1.2% drop in home improvement building.
- Nonresidential private construction -0.8% m/m, down for the second month in three.
- Public sector construction -0.2% m/m, reflecting a 0.2% decline in nonresidential public building.

Economy in Brief: April 2010

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