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>
</body></html>

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

Robert Brusca

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<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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<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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<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

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<p></p>
<p>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100407e.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>The Bureau of Labor Statistics reported yesterday that the
rate of improvement in job market conditions eased in February. The
latest Job Openings &amp; Labor Turnover Survey (JOLTS) indicated
that the <b>job openings rate </b>slipped to 2.1% from an
upwardly revised 2.2% in January. Nevertheless the rate was near the
highest in roughly one year. <i>The job openings rate is the
number of job openings on the last business day of the month as a
percent of total employment plus job openings. </i>Job
availability fell 4.6% and retraced nearly half of its upwardly revised
January increase. It remained off 3.8% year-to-year. Last year job
availability fell 17.8% following a 29.7% decline during 2008. The
series dates back to December 2000.</p>
<p>The government sector led the latest decline in the job
openings rate. It fell to the lowest level since November after several
months of improvement. A slip in the private sector rate reflected
fewer professional, education &amp; health services jobs but
factory and retail jobs grew strongly.</p>
<p>The <b>hires rate</b> has been stable near 3.1%
since the end of 2008.<i>The hires rate is the number of hires
during the month divided by employment.</i>The actual number of
hires reversed all of the January increase (-3.3% y/y) but the rate of
decline has moderated substantially since the recession.</p>
<p>The <b>job separations rate </b>eased to a new
series' low of 3.1% with the actual number of separations off 18.7%
year-to-year. The layoff rate alone fell to a nineteen-month low of
1.4%. <i>Separations include quits, layoffs, discharges, and
other separations as well as retirements. </i>The layoff rate
alone fell to 1.4% from 2.0% twelve months earlier.</p>
<p>The JOLTS survey dates only to December 2000 but has followed
the movement in nonfarm payrolls, though the actual correlation between
the two series is low.</p>
</span>
<img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100407f.jpg" style="width: 312px; height: 265px;"><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100407g.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/USECON/@EB/@EB14/@EB14.HTM">JOLTS (Job Openings &amp; Labor
&nbsp;Turnover Survey)</a></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>Feb. '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 colspan="8" class="firstcol"><b>Job
Openings, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>2.1</td>
<td>2.2</td>
<td>1.9</td>
<td>2.1</td>
<td>1.9</td>
<td>2.2</td>
<td>3.1</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>2,723</td>
<td>2,854</td>
<td>2,531</td>
<td>2,830</td>
<td>2,531</td>
<td>3,078</td>
<td>4,378</td>
</tr>
<tr class="odd">
<td colspan="8"><b>Hires, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>3.1</td>
<td>3.2</td>
<td>3.1</td>
<td>3.1</td>
<td>37.3</td>
<td>41.1</td>
<td>45.9</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>3,961</td>
<td>4,087</td>
<td>3,997</td>
<td>4,095</td>
<td>48,649</td>
<td>56,082</td>
<td>63,234</td>
</tr>
<tr class="odd">
<td colspan="8" class="firstcol"><b>Layoffs
&amp;
Discharges, Total</b></td>
</tr>
<tr>
<td class="firstcol">&nbsp; Rate (%)</td>
<td>1.4</td>
<td>1.5</td>
<td>1.6</td>
<td>2.0</td>
<td>20.7</td>
<td>17.7</td>
<td>16.5</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Total (000s)</td>
<td>1,822</td>
<td>1,953</td>
<td>2,049</td>
<td>2,593</td>
<td>27,683</td>
<td>24,589</td>
<td>22,606</td>
</tr>
</tbody>
</table>
</body></html>

The Bureau of Labor Statistics reported yesterday that the rate of improvement in job market conditions eased in February. The latest Job Openings & Labor Turnover Survey (JOLTS) indicated that the job openings rate slipped to 2.1% [...]

JOLTS: U.S. Job Openings Slip

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<span id="articletext">
<p></p>
<p><img alt src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100407d.jpg" style="border: 0px solid ; width: 353px; height: 265px; float: left;" align="left"></p>
<p>German orders were flat in February as they held the 5.1% m/m
gain from the month before. Foreign orders built on a 3.7% gain in
January by rising an additional 1.8% m/m as domestic orders gave back
1.9 percentage points of their 6.7 percentage point spurt in January.
Over three months foreign orders are rising at an 11.8% pace while
domestic orders are right behind at a 9.7% pace. Overall orders are up
by 24.5% Yr/Yr, they are lower over six months, but are back strong on
the three-month horizon.</p>
<p>In the quarter to date German orders are showing a strong lift
rising at a 24.1% annual rate, with nearly identical foreign and
domestic order rates of growth. Sales of consumer durables and capital
goods are advancing the fastest in Germany in the quarter.</p>
<p>The orders news in Germany for February is good buffer to the
revised Q4 e-Zone GDP growth rate which has been cut to show zero
growth. But, looking ahead, the OECD now expects G-7 growth to slow
although growth in the US is expected to lead the pack. Europe is
having a hard time getting growth lined up. Its broader social safety
net put a quicker bottom on the decline in GDP in the Zone during the
downturn, but the enlarged public sector deficits and fiscal problems
throughout the e-Zone put any further fiscal help off limits. Europe&#8217;s
more stifled job market means that private sector jobs will not
comeback quickly leaving its hope for stronger growth in the hands of
the export sector.</p>
<p>German orders data are encouraging from that standpoint.
Germany seems to making its export-led progress and the domestic sector
appears to be in tow. The Service sector is coming along in Europe as
well. That is important because that will be the sector of job creation
that will sustain recovery.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="9" scope="col"> <b>German
Orders and Sales By Sector and Origin</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Real and SA</td>
<td style="font-weight: bold;" colspan="3">% M/M</td>
<td style="font-weight: bold;" colspan="4">% Saar</td>
<td style="font-weight: bold;">&nbsp;QTR <br>
to Date</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Feb-10</td>
<td style="font-weight: bold;">Jan-10</td>
<td style="font-weight: bold;">Dec-09</td>
<td style="font-weight: bold;">3-MO</td>
<td style="font-weight: bold;">6-Mo</td>
<td style="font-weight: bold;">12-Mo</td>
<td style="font-weight: bold;">YrAgo</td>
<td style="font-weight: bold;"></td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>0.0%</td>
<td>5.1%</td>
<td>-2.4%</td>
<td>10.5%</td>
<td style="color: red;">5.1%</td>
<td>24.5%</td>
<td style="color: red;">-36.2%</td>
<td>24.1%</td>
</tr>
<tr>
<td class="firstcol">Foreign</td>
<td>1.8%</td>
<td>3.7%</td>
<td>-2.5%</td>
<td>11.8%</td>
<td style="color: red;">5.7%</td>
<td>30.1%</td>
<td style="color: red;">-40.7%</td>
<td>23.5%</td>
</tr>
<tr>
<td class="firstcol">Domestic</td>
<td>-1.9%</td>
<td>6.7%</td>
<td>-2.1%</td>
<td>9.7%</td>
<td style="color: red;">4.8%</td>
<td>18.7%</td>
<td style="color: red;">-30.6%</td>
<td>24.9%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="9" class="firstcol">Real
Sector Sales</td>
</tr>
<tr>
<td class="firstcol">MFG/Mining</td>
<td>-0.1%</td>
<td>1.3%</td>
<td>-1.1%</td>
<td>0.4%</td>
<td style="color: red;">0.2%</td>
<td>8.2%</td>
<td style="color: red;">-24.1%</td>
<td>3.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Consumer</td>
<td>-2.0%</td>
<td>-4.0%</td>
<td>2.2%</td>
<td style="color: red;">-14.6%</td>
<td style="color: red;">-7.6%</td>
<td>-1.5%</td>
<td>-11.7%</td>
<td>-12.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Cons
Durables</td>
<td>-2.5%</td>
<td>4.1%</td>
<td>-2.1%</td>
<td style="color: red;">-2.6%</td>
<td style="color: red;">-1.3%</td>
<td>5.3%</td>
<td style="color: red;">-22.2%</td>
<td>10.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Cons
Non-Durable</td>
<td>-2.0%</td>
<td>-5.0%</td>
<td>2.8%</td>
<td style="color: red;">-16.3%</td>
<td style="color: red;">-8.5%</td>
<td>-2.4%</td>
<td>-9.8%</td>
<td>-15.6%</td>
</tr>
<tr>
<td class="firstcol">Captial Gds</td>
<td>1.0%</td>
<td>2.6%</td>
<td>-1.3%</td>
<td>9.4%</td>
<td style="color: red;">4.6%</td>
<td>10.9%</td>
<td style="color: red;">-29.9%</td>
<td>11.9%</td>
</tr>
<tr>
<td class="firstcol">Intermediate Gds</td>
<td>-0.1%</td>
<td>2.6%</td>
<td>-2.8%</td>
<td style="color: red;">-1.2%</td>
<td style="color: red;">-0.6%</td>
<td>12.3%</td>
<td style="color: red;">-24.3%</td>
<td>2.7%</td>
</tr>
<tr>
<td class="firstcol">All MFG-Sales</td>
<td>0.0%</td>
<td>1.2%</td>
<td>-1.1%</td>
<td>0.4%</td>
<td style="color: red;">0.2%</td>
<td>8.4%</td>
<td style="color: red;">-24.3%</td>
<td>2.6%</td>
</tr>
</tbody>
</table>
</body></html>

German orders were flat in February as they held the 5.1% m/m gain from the month before. Foreign orders built on a 3.7% gain in January by rising an additional 1.8% m/m as domestic orders gave back 1.9 percentage points of their 6.7 [...]

German Orders Hold Gains

Inflationary impact of surge in oil prices larger in Europe than in the US

Futures market thinks the price of oil will recede significantly over the next six months

Recent pickup in US defense orders could help support overall growth ahead

Cost of transporting crude oil has soared to series high

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

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

Is recent drop in sentiment signaling softer growth ahead?

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

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

AI-related outperformance of IP in Advanced Asia ex Japan

Resilient US economy pushing up Blue Chip 2026 outlook

US and China big leaders in adoption of AI models

Robust US demand for advanced technology products

China's export growth rotating away from the US

More pronounced upward revisions in countries more exposed to AI investment

Stable job openings and hiring rates point to cautious hiring

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

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

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

Tighter US immigration enforcement adversely impacting labor force

Economic policy uncertainty, while still elevated, is declining

Gradual disinflation and easier monetary policies across advanced economies

Largest October layoffs since 2003, led by technology

Subdued global shipping costs not yet pointing to supply chain problems

PMIs show still-elevated but slowing US inflation

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Tian Yong Woon

In this week’s Letter, we cover the latest developments and implications of the Middle East conflict for Asia, while also making space for other important themes, including artificial intelligence (AI). The Middle East conflict remains in a no deal state coming out of the weekend, though some early Monday optimism emerged in Asian markets following Iran’s reported offer to reopen the Strait of Hormuz (chart 1). Nonetheless, as the Strait closure drags on, so too do the fiscal costs of domestic fossil fuel subsidies across Asia, which have been shown to move closely with crude oil prices (chart 2). While such measures offer direct relief by cushioning household energy costs, they remain difficult to sustain over the long haul.

Over the week, we also saw a further fraying in regional monetary policy trends, with the Philippines hiking its policy rate for the first time in about two years amid inflation concerns, while Indonesia stood pat on rates (chart 3). Investor attention is likely to remain fixed on monetary policy this week, with the Bank of Japan due to decide on policy. Expectations for an April hike have faded amid the persistent Middle East conflict, though yen weakness continues to present a source of concern (chart 4). The week also brings China’s latest PMI readings (chart 5), adding to the recent run of hard data accompanying the Q1 GDP release.

Beyond the Middle East conflict, the evolution of AI continues to demand close attention. Before geopolitical tensions took centre stage, AI was the dominant market narrative — and that enthusiasm has hardly faded. If anything, recent developments suggest the story is broadening: use cases are expanding, scalability is improving, and access is widening beyond large corporates to the mass market — increasingly spilling into the realm of physical AI. It may well be this persistent wave of optimism that is helping to underpin equity valuations, even as the geopolitical backdrop darkens (chart 6).

**The Middle East conflict**
About two months in, we remain stuck in the limbo of the US-Iran conflict, which has left the Strait of Hormuz largely closed and much of the world starved of the critical oil flows needed to power the global economy. The back and forth between the US and Iran has persisted in recent weeks, with both sides again failing to reach a peace deal over the weekend, though Monday’s news of Iran offering to reopen the Strait has revived some hope in markets. In truth, commodity and market valuations do not hinge so much on a peace deal itself, but rather on the resumption of oil flows through the Strait, something that could materialise even in the absence of a formal deal, though any agreement that includes and credibly delivers such a reopening would likely be warmly received by markets. Until then, market gyrations are likely to persist, with prices fluctuating in response to each new snippet of news. And until then, the world will continue both to be starved of, while gradually adapting to, the drip feed of oil flows emerging from the Strait.

260427T1.jpg

**The fiscal costs of the Middle East conflict**
As the Middle East conflict drags on, so too does the strain on fiscal resources across parts of Asia, as the costs of energy-related subsidy programmes continue to mount. While such programmes have an immediate, direct, and tangible impact in shielding households from surging energy costs, they are far from sustainable, particularly if oil prices remain well above targeted levels or stay elevated for an extended period. As chart 2 illustrates, the costs of these explicit subsidy programmes tend to rise closely with crude oil prices, as seen in India and Indonesia. Other measures adopted elsewhere, such as drawing down oil reserves, may be less fiscally costly, but are similarly difficult to sustain indefinitely. In both respects, the clock is ticking, and the world continues to hold its breath as the conflict drags on.

260427T2.jpg

**The latest central bank responses to the conflict**
Over the past week, Asia saw two central bank decisions. The Philippines’ (BSP) opted to deliver its first rate hike in about two years, while Indonesia’s (BI) chose to stand pat on policy rates and instead committed to stepped up FX intervention (chart 3). This latest round of decisions points to a further fraying of what had been a broad regional monetary policy consensus, namely that central banks would delay additional easing while maintaining a high bar for outright tightening. Domestic considerations, however, remain paramount. In the Philippines’ case, the central bank has moved to rein in inflation, which is already showing notable signs of price pass through stemming from disruptions linked to the Strait of Hormuz. That said, BSP is not the first in the region to buck the reluctance to tighten. Singapore’s central bank had already tightened policy in mid-April, albeit through its own distinct framework, given its use of the exchange rate rather than policy rates as the primary channel for monetary policy.

260427T3.jpg

**The week ahead**
Looking to the week ahead, a major central bank decision looms in Japan. Market expectations for the Bank of Japan to deliver a rate hike at its April meeting have ebbed amid the persistence of the Middle East conflict, to which Japan remains particularly vulnerable given its reliance on oil imports flowing through the Strait of Hormuz. At the same time, inflation in Japan has yet to become a major concern, with recent readings having picked up but not yet entering troubling territory. One potential source of concern, however, lies with the Japanese yen, which has remained on a weakening trend since early last year (chart 4). That depreciation has been one of the key arguments underpinning calls for further rate hikes.

260427T4.jpg

The week also brings China’s latest PMIs into focus. March saw a divergence between China’s official PMI readings, which improved, and the unofficial readings from RatingDog, which instead pulled back. Nonetheless, both official and unofficial gauges remained in expansionary territory (chart 5), with investors now watching closely to see whether that resilience can be sustained amid ongoing stresses from the Middle East, or whether offsetting drivers can continue to keep Chinese business sentiment and prospects buoyant.

260427T5.jpg

**Beyond the strait**
Moving beyond the Middle East conflict, a whole host of developments continue to unfold globally, many of which have in fact helped offset some of the pessimism wrought by the Strait’s chokehold. One such development is artificial intelligence (AI), which had dominated headlines before the outbreak of the conflict and continues to advance at breakneck pace. AI capabilities are still rapidly evolving, while practical applications, such as physical AI embodied in humanoid robots, are beginning to show broader and stronger use cases. Production of such robots is also becoming increasingly scalable and within reach not just for industrial complexes and healthcare, but for the mass market as well. It is perhaps growing optimism around these prospects that has helped keep equity valuations buoyant, even in the face of the festering conflict in the Middle East. Moreover, while concerns over AI-driven job displacement persist, new opportunities are emerging as well, particularly for AI adopters, with a growing share of job postings in Western economies increasingly referencing AI-related skills, as shown in chart 6.

260427T6.jpg

Asia

Economic Letter from Asia: Not Just About the Strait

260424E.jpg

The onset of the war in Iran appears to have hit the German economy extremely hard as the Ifo survey shows very substantial and broad-based decline across its survey in April. The Ifo survey features readings for five sectors as well as an aggregate reading, and it surveys them for climate, current conditions, and expectations. The decline in the Ifo survey is present for all three concepts and across all five sectors, marking the weakening in April as a highly significant and extremely disturbing development. Only manufacturing in the current conditions survey escapes a month-to-month decline.

**The Ifo sequences**: The **climate** reading fell both overall and across each of the five sectors. **Current conditions** declined for the overall and for four of the five sectors, with manufacturing the sole exception. **Expectations** declined for the overall and for all sectors. Several of the sector declines were for a very substantial magnitude, especially when compared to historic changes in these indexes.

**Monthly changes in readings—severe broad deterioration**
The month-to-month change in the climate reading has weakened more month-to-month 19% of the time. That overall result, however, is boosted by manufacturing where the monthly change has been weaker 35% of the time (on data back to 2011). However, all other sectors have seen climate weaker m/m only 2.3% to 6.3% of the time! The current situation readings weakened, with the headline weakening more m/m 11% of the time. This was boosted by manufacturing, the only sector that improved on the month; its ranking on change was in its 85th percentile—quite good and truly stand-alone good news. The other current changes by sector ranged from construction being weaker 1.7% of the time, to retailing that has been weaker about 30% of the time in terms of m/m changes. Expectation changes were uniformly terrible, with the headline drop weaker only 6.3% of the time and sector change month-to-month weaker between 9% and 1.7% of the time. The monthly weakening was uniform and substantial. I document it with these calculations, but you can also see it on the chart above.

**Climate**: The bottom line is that the all-sector index for climate fell to -20.3 in April from -18 in March, placing it at a 10.5 percentile standing on data since 1993. The sector ranking is the highest for construction with a 42.2 percentile standing and the weakness for services at a 1.1 percentile standing—weaker than the table reading nearly 99% of the time. In terms of percentile standing levels or monthly changes, conditions are closing in on grim.

**Current conditions**: Current conditions saw the all-sector index slip to -5.3 in April from -2.4 in March. The headline ranking stands at a 9.8 percentile mark, making it—like the climate reading—weaker than its current reading only about 10% of the time. The strongest reading under current conditions is for construction which has a 60.6 percentile standing; it is the only ranking in the table above its historic median. Manufacturing, the only sector in the survey that improved month-to-month, has a 22.5 percentile standing, while services record the weakest percentile standing under current conditions, at an 8.4 percentile standing.

**Expectations:** The all-sector index for expectations fell to -25.3 in April from -19.9 in March, placing it at a 6.3 percentile standing. The percentile standings across sectors range from a high of 9.5% for manufacturing to a low of 1.5% for retailing. Up until earlier this year, the Ifo was showing signs of improvement; however, all of that has simply collapsed in the last month. Weakness is across economic concepts and sectors, as documented above. For reference, the table also gives a separate set of rankings on where the various indexes stand since the invasion of Ukraine, since that was another marked event that drove the index, that had been improving after Covid, down to lower levels.  Ranked even on this reduced scale looking at conditions only since the invasion of Ukraine, when conditions have generally been weaker, the current rankings across the Ifo survey remained extremely weak. This is a very disturbing survey for the German economy.

260424.jpg

Germany

German Ifo Plunges Everywhere

Andrew Cates

**Energy shock lifts inflation, trims growth**
The IMF’s latest WEO revisions for 2026 broadly reflect the classic stagflationary impact of the recent Middle East energy shock, with growth downgraded and inflation revised higher across most major economies. Higher energy prices act as a tax on real incomes while simultaneously pushing up costs. That said, the picture is not uniform: a number of economies—notably the US, China and India—have seen growth upgrades, reflecting stronger-than-expected momentum so far in 2026. By contrast, the UK stands out at the stagflationary extreme, combining one of the largest growth downgrades with a relatively strong inflation uplift—consistent with its weaker underlying momentum, greater energy sensitivity and more persistent domestic inflation dynamics. More broadly, while the global revisions remain modest—pointing to resilience in activity—the message is that disinflation is no longer a smooth glide back to target but increasingly contingent on energy prices and geopolitical developments.

260423Z1.jpg

**Markets largely shrug off rising economic pessimism**
Notwithstanding a more downbeat assessment from economists—including the IMF’s stagflationary tilt to the outlook—there has been remarkably little follow-through into financial markets. Measures of systemic stress in both the US and UK remain low by historical standards, suggesting that investors are, for now, largely looking through the Middle East conflict. There are several possible explanations: corporate profits remain resilient, the AI-driven investment narrative continues to dominate market thinking, and markets may be assuming that any energy shock will be temporary and contained. In effect, investors appear to be pricing a benign baseline in which geopolitical risks do not materially disrupt growth, inflation expectations or policy. The UK is a partial exception, with a somewhat more visible uptick in stress, which aligns more closely with the IMF’s more challenging growth-inflation trade-off and the economy’s greater sensitivity to energy prices.

260423Z2.jpg

**Volatility falls despite deteriorating growth surprises**
Market optimism is also increasingly at odds with the incoming data flow. Typically, equity volatility declines when growth surprises are positive and inflation surprises are benign. However, the recent pattern has broken that relationship. Growth surprises across the G10 have turned increasingly negative (our series is inverted in the chart below), yet volatility has continued to fall. In other words, markets are becoming less sensitive to weakening macro data, continuing to price a benign outlook even as the data deteriorate. This divergence reinforces the broader theme: investors are, for now, looking through both geopolitical risks and softer economic momentum, placing greater weight on resilience in earnings, the AI-driven narrative and the assumption that policy will remain supportive.

260423Z3.jpg

**Inflation Nowcasts Have Jumped**
Incoming data suggest that headline inflation has moved higher in recent weeks, broadly in line with expectations given the rise in energy prices following the Middle East shock. Nowcasts for CPI across the major economies show a clear rebound in March and April from the lows seen at the start of 2026, with the move occurring in a relatively synchronised fashion. This reinforces the view that the recent pickup in inflation is being driven primarily by a common external factor—energy.

260423Z4.jpg

**Energy shock not yet feeding into underlying inflation**
However, the detailed breakdown of March inflation outcomes suggests that this remains, for now, a largely headline-driven phenomenon. While headline CPI prints were firm across most economies, core inflation—stripping out energy and food—was more subdued and in some cases weaker. This indicates that there has been very limited pass-through from higher energy prices into broader goods and services inflation at this early stage. In other words, the shock is still being absorbed rather than propagated. That distinction is critical for policy and markets alike: as long as second-round effects remain contained, central banks may be able to look through the near-term rise in inflation, even as headline rates move higher.

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**Inflation Expectations Rising as Growth Sentiment Falters**
It remains early days, and much will hinge on how inflation expectations evolve from here. The latest ZEW survey for Germany already conveys the hallmarks of a classic stagflationary shock, with macroeconomic expectations weakening even as inflation expectations have ratcheted sharply higher. This shift is important: while the recent rise in headline inflation has so far shown limited pass-through into core, a sustained increase in expectations would raise the risk of second-round effects and make the inflation process more persistent. In that sense, the ZEW data highlight the key fault line in the current environment—whether the energy-driven shock remains contained, or begins to embed itself more broadly through expectations and pricing behaviour.

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Financial markets have remained notably calm in recent weeks despite rising geopolitical tensions in the Middle East, a more downbeat macroeconomic narrative and elevated uncertainty. Measures of financial stress and volatility remain low, and equity markets continue to look through both the conflict and softer data. That resilience sits alongside a more nuanced macro backdrop. The IMF’s latest WEO revisions point to a classic stagflationary energy shock—growth downgraded and inflation revised higher—although the global impact remains modest and uneven, with some economies still benefiting from stronger momentum (chart 1). At the same time, market pricing appears increasingly detached from the data flow, with volatility declining even as growth surprises have turned more negative relative to inflation (charts 2 and 3). Incoming inflation data reinforce the idea of a largely headline-driven shock, with nowcasts rising in line with higher energy prices but only limited pass-through into core inflation so far (charts 4 and 5). However, it remains early days. Survey evidence, such as the latest ZEW release, suggests that inflation expectations may already be responding in a more concerning way, with a marked rise alongside weakening growth sentiment (chart 6). Taken together, the key question for markets is whether this remains a contained, energy-driven shock that can be looked through—or whether it begins to embed more persistently via expectations, forcing a reassessment of the currently benign outlook.

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Charts of the Week: Risks Build, Markets Shrug

Sandy Batten

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The National Activity Index published by the Federal Reserve Bank of Chicago (CFNAI) slipped to -0.20 in March from an upwardly revised +0.03 in February (previously (-0.11). This is the lowest monthly reading since last November. Smoothing out the monthly volatility, the index's three-month moving average (CFNAI-MA3) declined to -0.03 in March from an upwardly revised +0.03 in February (previously -0.01).

This index is expressed in standard deviation units from zero (with a value of zero defined as trend real GDP growth). Research at the FRB Chicago indicates that readings on the 3-month average of -0.70 or below are consistent with the economy being in a recession. Therefore, even though the March reading on the 3-month average was negative, it indicates that the US economy is still growing, just slightly slower than trend, and is well away from recessionary conditions. The 3-month average would be much deeper in negative territory if the economy was at risk of contracting.

The National Activity Index is a composite of 85 economic indicators, grouped into four major categories: production and income; employment, unemployment, and hours worked; personal consumption and housing; sales, orders, and inventories. Three of the four broad categories of indicators used to construct the index decreased from February, and three categories made negative contributions in March. Production-related indicators contributed –0.20 to the CFNAI in March, down from +0.13 in February. The sales, orders, and inventories category's contribution to the CFNAI was –0.01 in March, down from +0.05 in February. Employment-related indicators contributed +0.02 to the CFNAI in March, up from –0.15 in February. The personal consumption and housing category's contribution to the CFNAI was –0.01 in March, down from a neutral value in February.

The CFNAI Diffusion Index, which measures the breadth of the change in the component series and is also a three-month moving average, increased to –0.04 in March from –0.08 in February. This is the highest reading since February 2025. A reading of zero indicates that all of the indicators are growing at their long-term average. If all of the underlying indicators in a given month are below their long-run averages, the diffusion index will equal -1. If all of the indicators are above their long-run averages, it will equal +1. Thirty-four of the 85 individual indicators made positive contributions to the CFNAI in March, while 51 made negative contributions. Forty-three indicators improved from February to March, while 40 indicators deteriorated and two were unchanged. Of the indicators that improved, 16 made negative contributions.

These figures are available in Haver's **SURVEYS** database.

- The monthly reading fell to -0.20 in March from an upwardly revised +0.03 in February.
- The three-month average slipped from +0.03 to -0.03.
- Despite the slip in March, the index points to near-trend economic growth and is well above recession territory.

Chicago Fed National Activity Index Slipped in March

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance rose by 6,000 to 214,000 in the week ending April 18, from 208,000 in the week ending April 11, revised from 207,000. The four-week average rose 750 to 210,750 in the week ending April 18, from 210,000 the April 11 week, revised from 209,750. The Action Economics/Haver Analytics Survey looked for 210,000 claims to have been filed.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—rose by 12,000 to 1.821 million in the week ending April 11, from 1.809 million in the week ending April 4. The four-week moving average rose to 1.812 million in the latest week from 1.811 million in the March 28 week. The insured unemployment rate remained at 1.2% in the week of April 11. It has remained at that level since the week of November 29, 2025.

The insured unemployment rate varied greatly across individual states and territories. In the week ending April 4, the highest unemployment rates were in New Jersey (2.51%), Massachusetts (2.37%), Rhode Island (2.31%), Washington (2.25%), Minnesota (2.11%), and California (2.02%). The lowest rates were in Florida (0.30%), Louisiana (0.31%), Arkansas (0.35%), Alabama (0.36%), North Carolina (0.39%), Tennessee (0.46%), South Dakota (0.47%), Kansas and Virginia (both 0.49%). Rates in other notable states include New York (1.92%), Illinois (1.82%), Pennsylvania (1.52%), and Texas (1.04%). 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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- New claims rose by 6,000 to 214,000.
- Continuing claims rose by 12,000 to 1.821 million.
- The insured unemployment rate remained at 1.2%.


Economy in Brief: 2010

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