Tom Moeller

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<span id="articletext">
<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111a.jpg" align="right" border="0" height="265" width="353">Is the
consumer not attempting to borrow or is credit not being extended by
the lender? It's hard to say but the Federal Reserve reported
late-Friday that consumer credit outstanding fell by a record $17.5B
m/m during November following a $4.2B October decline that was revised
slightly deeper from the initial report. The latest was the fourteenth
monthly drop since summer 2008. Moreover, the 3.9% y/y pullback in
credit outstanding set another historic record as consumers retrenched
and took account of debt-laden personal balance sheets along with job
market deterioration. Consumer credit outstanding as a percentage of
disposable income fell to 22.1% from its 2005 high of 24.7%.
Nevertheless, these rates remain up from the low near 16% in
1992.</p>
<p>Usage of non-revolving credit (autos &amp; other
consumer durables), which accounts for nearly two-thirds of the total,
fell $3.8B after a $3.2B October increase. The 0.6% y/y decline
reflected a 13.2% drop in pools of securitized assets, an 11.2% decline
in finance company lending and a 7.2% drop in nonfinancial business
credit extensions. These were mostly offset by the federal government
&amp; Sallie Mae which expanded lending by more than two-thirds y/y
and commercial bank lending which rose 1.1%. The latter figure,
however, was down from 13% growth early in 2008.</p>
<p>Revolving credit
usage fell a record $13.7B during November as part of a pullback that
began late in 2008. The latest was part of a 9.3% y/y decline which
also was by far a record. Versus November 2009, finance companies
lowered lending by 37.9%, commercial bank lending fell 9.8%, pools of
securitized assets fell 5.8%, savings institutions pulled back 3.9%
y/y. Loans from credit unions offset some of these declines with a 6.2%
increase.</p>
<p> These figures are the major input to the Fed's quarterly
Flow of Funds accounts for the household sector.</p>
<p>Credit data are
available in Haver's <b>USECON</b> database. The Flow of
Funds data are in Haver's <b>FFUNDS</b> database.</p>
<p><b>Why
Are Banks Holding So Many Excess Reserves? </b>from the Federal
Reserve Bank of New York is available here <a href="http://www.newyorkfed.org/research/current_issues/ci15-8.pdf">here</a>.&nbsp;</p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111b.jpg" border="0" height="265" width="312">
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111c.jpg" border="0" height="265" width="312">
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Consumer
Credit Outstanding (m/m Chg, SAAR)</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</b></th>
<th scope="col"><b>September</b></th>
<th scope="col"><b>Y/Y</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b>&nbsp;</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Total</td>
<td>$-17.5B</td>
<td>&nbsp;$-4.2B</td>
<td>$-8.9B</td>
<td>-3.9%</td>
<td>1.6%</td>
<td>5.6%</td>
<td>4.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Revolving</td>
<td>$-13.7B</td>
<td>$-7.3B</td>
<td>$-8.0B</td>
<td>-9.3%</td>
<td>1.9%</td>
<td>7.8%</td>
<td>5.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; Non-revolving</td>
<td>$-3.8B</td>
<td>$3.2B</td>
<td>$-1.0B</td>
<td>-0.6%</td>
<td>1.4%</td>
<td>4.4%</td>
<td>3.6%</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">Irish Industrial Production:
Modern Vs Traditional Sectors</span><br>
<span id="byline">by <a href="/comment/Curley.html">Louise
Curley
</a> January 11, 2010</span>
<span id="articletext">
<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111d.jpg" align="left" border="0" height="265" width="353"></p>
<p>Recession continues in Ireland as Industrial production,
announced today, declined 8.0% from 106.2 (2005=100) in Octoberto 97.7%
in November. Ireland makes a distinction between its traditional
industries and those of relatively recent origin. The "Modern" sector
includes the following NACE industries reproduction of recorded music
(182), manufacture of chemicals and chemical products (20), manufacture
of basic pharmaceutical products and pharmaceutical preparations (21),
manufacture of computers, electronic and optical products (26),
manufacture of electric equipment (27) and medical and dental
instruments and supplies (325). All the rest of the industries make up
the traditional sector.</p>
<p>Month to month production in the Modern Sector has been
volatile but has shown little trend. For instance production in the
Modern sector declined 10.5% in November, but was down only 3.8% from a
year ago. Production in the Traditional sector, on the contrary, has
shown a definite downward trend. Although production in the Traditional
sector was down only 2.2% in November, it was 17.7% below the year ago
level. The attached chart shows total Industrial Production for Ireland
and production in the Modern and Traditional sectors. The relative
stability of production in the Modern Sector and the sharp decline of
production in the Traditional Sector are apparent.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>&nbsp;IRELAND</b></th>
<th scope="col"><b>Nov 09</b></th>
<th scope="col"><b>Oct 09</b></th>
<th scope="col"><b>Nov&nbsp; 08</b></th>
<th scope="col"><b>M/M % Chg</b></th>
<th scope="col"><b>Y/Y/% Chg</b></th>
<th scope="col"><b>2008</b></th>
<th scope="col"><b>2007</b></th>
<th scope="col"><b>2006</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Industrial
Production (2005=100)</td>
<td>97.7</td>
<td>106.2</td>
<td>108.0</td>
<td>-8.00</td>
<td>-9.54</td>
<td>106.5</td>
<td>108.3</td>
<td>103.0</td>
</tr>
<tr>
<td class="firstcol">Traditional Sector</td>
<td>84.4</td>
<td>86.3</td>
<td>102.5</td>
<td>-2.20</td>
<td>-17.66</td>
<td>100.3</td>
<td>104.7</td>
<td>101.6</td>
</tr>
<tr class="odd">
<td class="firstcol">Modern Sector</td>
<td>108.2</td>
<td>121.0</td>
<td>112.6</td>
<td>-10.50</td>
<td>-3.82</td>
<td>111.2</td>
<td>111.0</td>
<td>104.0</td>
</tr>
</tbody>
</table>
<span id="articletitle">French Industrial Output Recovers
Lead By A Rebound In Investment Goods </span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> January 11, 2010</span>
<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100111e.jpg" align="left" border="0" height="265" width="353"></p>
<p>French IP is on the mend. Yr/Yr its decline has been reduced
to under a 5% drop, at -3.8%. Over six months IP is expanding at a
growth rate of 6.1%. Output of consumer durable goods is holding back
the recovery although output of consumer durables rose in November.
Auto output surged in November.</p>
<p>France is seeing output rise in Q4 at a very modest annual
rate pace of 0.5%. Consumer durables output is falling at a 7% annual
rate in Q4. Consumer nondurables and capital goods output are creeping
ahead in the new quarter. Intermediate goods output is rising at a
strong 6.3%.</p>
<p>The industrial sector globally is making a strong recovery
from a disastrous drop in the recession. France&#8217;s recovery is about as
advanced as that in any major industrial country. Still it has lost
some momentum. This recovery continues to go in fits and starts.
France&#8217;s IP advance in November is heartening but it does not turn up
the speed of the expansion in any clear way.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="8" scope="col">French IP Excluding
Construction<br>
</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">Saar except m/m</td>
<td>Nov-09</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>3-mo</td>
<td>6-mo</td>
<td>12-mo</td>
<td>Quarter -to-date</td>
</tr>
<tr>
<td class="firstcol">IP total</td>
<td>1.1%</td>
<td>-0.6%</td>
<td>-1.2%</td>
<td>-2.6%</td>
<td>6.1%</td>
<td>-3.8%</td>
<td>0.5%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Consumer
Dur</td>
<td>1.2%</td>
<td>-1.5%</td>
<td>-3.1%</td>
<td>-12.9%</td>
<td>-9.1%</td>
<td>-11.7%</td>
<td>-7.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Consumer
Ndur</td>
<td>0.4%</td>
<td>-0.6%</td>
<td>1.9%</td>
<td>7.1%</td>
<td>3.1%</td>
<td>-2.2%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Capital</td>
<td>2.4%</td>
<td>-0.8%</td>
<td>-3.1%</td>
<td>-6.0%</td>
<td>12.4%</td>
<td>-0.7%</td>
<td>0.8%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Intermed</td>
<td>2.1%</td>
<td>0.1%</td>
<td>-1.6%</td>
<td>2.4%</td>
<td>13.9%</td>
<td>-3.7%</td>
<td>6.3%</td>
</tr>
<tr class="grey2">
<td colspan="8" class="firstcol">Memo</td>
</tr>
<tr>
<td class="firstcol">&nbsp;Auto</td>
<td>11.1%</td>
<td>-5.7%</td>
<td>-17.0%</td>
<td>-42.9%</td>
<td>75.5%</td>
<td>18.6%</td>
<td>-18.6%</td>
</tr>
</tbody>
</table>
</body></html>

Is the consumer not attempting to borrow or is credit not being extended by the lender? It's hard to say but the Federal Reserve reported late-Friday that consumer credit outstanding fell by a record $17.5B m/m during November [...]

U.S. Consumer Credit Usage DeclineReaches Historic Proportion

Robert Brusca

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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108e.jpg" align="left" border="0" height="265" width="353"></p>
<p>The OECD trend-adjusted leading indicators are showing strong
increases compared to past business cycles. The chart shows that
Europe, Japan, and the US have not been as synchronous and stronger
since the expansion from the 1973-75 recession. The expansion from the
1981-82 recession was stronger (at least eventually) for the US but it
took Japan until very late in the cycle to get stronger and Europe
never did show the strength in that cycle that it is showing now, while
it is still early in the cycle. Japan is not yet hitting a home run;
its LEI rise (which is positive over six-months) is still small, but it
also lagged in the recovery from the recession of 1981-82.</p>
<p>On balance the OECD data are impressive. They point to a
recovery in progress. Push the pessimists aside. The main industrial
economies are leading the way forward. It is important to look at the
trends a to not get to caught up in the month to month numbers which
always ebb and flow but whose natural ebb and flow seems more daunting
when the economy is still sputtering.</p>
<p>What we learn in looking at the these indicators and these
various economies&#8217; monthly releases is how much the stock markets
remains priced for good news but bond markets continue to mark jagged
paths as they go from fearing strong growth and inflation to showing
disappointment over current indicators that fall short of robustness.
This sort of back and forth is very much the usual way of things early
in economic recoveries. This recovery is so early in fact that the
label &#8216;recovery&#8217; has yet to be made official by the recession-dating
arbiters.</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 colspan="5" class="firstcol">Growth
Progression-SAAR</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">3Mos</td>
<td style="font-weight: bold;">6Mos</td>
<td style="font-weight: bold;">12mos</td>
<td style="font-weight: bold;">Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>11.4%</td>
<td>13.7%</td>
<td>6.3%</td>
<td>-9.7%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>12.2%</td>
<td>14.4%</td>
<td>5.7%</td>
<td>-10.4%</td>
</tr>
<tr>
<td class="firstcol">OECD.Euro-Area</td>
<td>12.4%</td>
<td>14.9%</td>
<td>8.5%</td>
<td>-11.0%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>10.8%</td>
<td>12.1%</td>
<td>0.7%</td>
<td>-9.8%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>12.2%</td>
<td>14.2%</td>
<td>4.9%</td>
<td>-10.1%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="5" class="firstcol">Six month
readings at
6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Recent six</td>
<td style="font-weight: bold;">6Mo Ago</td>
<td style="font-weight: bold;">12Mo Ago</td>
<td style="font-weight: bold;">18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>13.7%</td>
<td>-0.7%</td>
<td>-14.9%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>14.4%</td>
<td>-2.4%</td>
<td>-15.9%</td>
<td>-4.6%</td>
</tr>
<tr>
<td class="firstcol">OECD.Eur</td>
<td>14.9%</td>
<td>2.5%</td>
<td>-15.2%</td>
<td>-6.5%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>12.1%</td>
<td>-9.6%</td>
<td>-16.7%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>14.2%</td>
<td>-3.7%</td>
<td>-15.9%</td>
<td>-3.9%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol">Slowdowns
indicated by
BOLD RED</td>

</tr>
</tbody>
</table>
</body></html>

The OECD trend-adjusted leading indicators are showing strong increases compared to past business cycles. The chart shows that Europe, Japan, and the US have not been as synchronous and stronger since the expansion from the 1973-75 [...]

OECD LEIs Are Surging Especially Strong Is The Euro-Area

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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108a.jpg" align="right" border="0" height="265" width="353"></p>
<p>The latest jobs report was disappointing for those who hoped
for improved momentum in hiring, but diminishing weakness continued as
the predominant message. The Bureau of Labor Statistics reported that
nonfarm payrolls fell 85,000 last month after a 4,000 November increase
(revised from -11,000) and a 127,000 October decline (revised from
(-111,000). Together, the three-month average decline of 69,000 was the
smallest of the recent recession. Consensus expectations has been for
no change in December payrolls.</p>
<p>For 2009 as a whole, payrolls declined by 5.0 million, by far
the worst decline since WWII. To emphasize the message of a weak labor
market, the percentage term drop of 3.7% y/y also was the weakest of
the postwar period, edging out a 3.6% decline in 1945.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108b.jpg" align="right" border="0" height="265" width="353">
The payroll employment decline was accompanied by a stable
unemployment rate at 10.0%. Nevertheless, the latest was not far below
the postwar record of 10.8% reached late in 1982. For the year as a
whole the unemployment rate of 9.3% also was just below the record.
Last month, household sector employment fell a hard 589,000 (-3.8% y/y)
following a modest November increase. The decline was accompanied by a
661,000 shrinkage in the labor force (-1.0% y/y). This y/y decline was
the largest since early 1951. The number of individuals not in the
labor force rose a whopping 843,000 (4.2% y/y) with 6,306,000 (14.4%
y/y) who want a job now. (The household survey included modest
benchmark revisions.)</p>
<p>Elsewhere in the household survey of employment, the
unemployment rate including marginally attached workers and those
working part-time for economic reasons held near its high at 17.3%. For
the year as a whole this measure stood at 16.3% versus 10.6% last year
and 8.3% in 2007. The number of job losers on temporary layoff ticked
up 10,000 (0.5% y/y) following huge declines during the prior two
months. The number on permanent layoff fell by 275,000 (+57.2% y/y).
Another measure compromising the employment picture was a rise in the
median duration of unemployment to a record-high 20.5 weeks. The
percent of those unemployed for more than 27 weeks rose to 39.8%.</p>
<p>In the establishment survey, the decline in service sector
hiring of 4,000 owed to a 21,000 drop (-0.3% y/y) in government hiring.
The number of private service sector jobs rose a modest 17,000 (-2.0%
y/y) after a larger November increase.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108c.jpg" align="right" border="0" height="265" width="353">
For the year employment here
fell by 2.6 million (-2.8% y/y). Professional &amp; business
services jobs rose 50,000 during December (-3.1% y/y) while
administrative &amp; support jobs rose 42,400 (-3.9% y/y). That
included a 46,500 (-7.0% y/y) rise in temporary help services
employment which was the fifth consecutive monthly increase. Financial
activities employment rose 4,000 (-3.9% y/y) following declines that
steadily diminished earlier this year. Factory sector employment fell
again last month, by 27,000, which compares to -262,000 last January.
For the year as a whole factory sector jobs fell by 1.4 million and by
a record 10.7%. Construction employment fell another 53,000 and by
nearly one million for 2009 as a whole (-13.5% y/y), also by far the
record.</p>
<p>The diffusion index for private nonfarm payrolls ticked lower
to 40.0% last month but remained double the low of last March. For the
factory sector, the index ticked up m/m to 39.8%. It had fallen to a
low of 6.0% last January. These indexes are harbingers of future
payroll levels.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108d.jpg" align="right" border="0" height="265" width="353">
The length of the average workweek, often a harbinger of
future employment, held steady at 33.2 weeks, its highest level since
February. The workweek in the factory sector also held steady m/m at
40.4 weeks but the figure has been rising since a May low.</p>
<p>Average hourly earnings increased 0.2% after an upwardly
revised November increase. The 2.9% gain for the year as a whole was
its weakest since 2004. Earnings in the factory sector increased 0.3%
and by 2.6% for the year. The durable sector's earnings rose 3.4% y/y
while earnings in the private service sector rose a diminished 3.1%.
Construction sector earnings rose 3.4% y/y though that was up from 1.2%
growth in 2005.</p>
<p>The figures referenced above are available in Haver's <b>USECON</b>
database. Additional detail can be found in the <b>LABOR </b>and
in the <b>EMPL</b> databases.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Employment:
000s</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</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">Payroll Employment</td>
<td>-85</td>
<td>4</td>
<td>-127</td>
<td>-3.1%</td>
<td>-3.7</td>
<td>-0.4%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-11</td>
<td>-111</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp;
Manufacturing</td>
<td>-27</td>
<td>-35</td>
<td>-48</td>
<td>-9.9</td>
<td>-10.7</td>
<td>-3.3%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; &nbsp;
Construction</td>
<td>-53</td>
<td>-27</td>
<td>-56</td>
<td>-13.7</td>
<td>-13.5</td>
<td>-5.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp; Service
Producing</td>
<td>-4</td>
<td>62</td>
<td>-18</td>
<td>-1.6</td>
<td>-2.2</td>
<td>0.2%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.2</td>
<td>33.2</td>
<td>33.0</td>
<td>33.3 (Dec. '08)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3%</td>
<td>2.2%</td>
<td>2.9</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>10.0%</td>
<td>10.0%</td>
<td>10.1%</td>
<td>7.4% (Dec. '08)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
</body></html>

The latest jobs report was disappointing for those who hoped for improved momentum in hiring, but diminishing weakness continued as the predominant message. The Bureau of Labor Statistics reported that nonfarm payrolls fell 85,000 [...]

U.S. December Payroll Decline Is Modest Disappointment; 2009 Is Weakest Year Since WWII

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<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108a.jpg" align="right" border="0" height="265" width="353"></p>
<p>The latest jobs report was disappointing for those who hoped
for improved momentum in hiring, but diminishing weakness continued as
the predominant message. The Bureau of Labor Statistics reported that
nonfarm payrolls fell 85,000 last month after a 4,000 November increase
(revised from -11,000) and a 127,000 October decline (revised from
(-111,000). Together, the three-month average decline of 69,000 was the
smallest of the recent recession. Consensus expectations has been for
no change in December payrolls.</p>
<p>For 2009 as a whole, payrolls declined by 5.0 million, by far
the worst decline since WWII. To emphasize the message of a weak labor
market, the percentage term drop of 3.7% y/y also was the weakest of
the postwar period, edging out a 3.6% decline in 1945.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108b.jpg" align="right" border="0" height="265" width="353">
The payroll employment decline was accompanied by a stable
unemployment rate at 10.0%. Nevertheless, the latest was not far below
the postwar record of 10.8% reached late in 1982. For the year as a
whole the unemployment rate of 9.3% also was just below the record.
Last month, household sector employment fell a hard 589,000 (-3.8% y/y)
following a modest November increase. The decline was accompanied by a
661,000 shrinkage in the labor force (-1.0% y/y). This y/y decline was
the largest since early 1951. The number of individuals not in the
labor force rose a whopping 843,000 (4.2% y/y) with 6,306,000 (14.4%
y/y) who want a job now. (The household survey included modest
benchmark revisions.)</p>
<p>Elsewhere in the household survey of employment, the
unemployment rate including marginally attached workers and those
working part-time for economic reasons held near its high at 17.3%. For
the year as a whole this measure stood at 16.3% versus 10.6% last year
and 8.3% in 2007. The number of job losers on temporary layoff ticked
up 10,000 (0.5% y/y) following huge declines during the prior two
months. The number on permanent layoff fell by 275,000 (+57.2% y/y).
Another measure compromising the employment picture was a rise in the
median duration of unemployment to a record-high 20.5 weeks. The
percent of those unemployed for more than 27 weeks rose to 39.8%.</p>
<p>In the establishment survey, the decline in service sector
hiring of 4,000 owed to a 21,000 drop (-0.3% y/y) in government hiring.
The number of private service sector jobs rose a modest 17,000 (-2.0%
y/y) after a larger November increase.<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108c.jpg" align="right" border="0" height="265" width="353">
For the year employment here
fell by 2.6 million (-2.8% y/y). Professional &amp; business
services jobs rose 50,000 during December (-3.1% y/y) while
administrative &amp; support jobs rose 42,400 (-3.9% y/y). That
included a 46,500 (-7.0% y/y) rise in temporary help services
employment which was the fifth consecutive monthly increase. Financial
activities employment rose 4,000 (-3.9% y/y) following declines that
steadily diminished earlier this year. Factory sector employment fell
again last month, by 27,000, which compares to -262,000 last January.
For the year as a whole factory sector jobs fell by 1.4 million and by
a record 10.7%. Construction employment fell another 53,000 and by
nearly one million for 2009 as a whole (-13.5% y/y), also by far the
record.</p>
<p>The diffusion index for private nonfarm payrolls ticked lower
to 40.0% last month but remained double the low of last March. For the
factory sector, the index ticked up m/m to 39.8%. It had fallen to a
low of 6.0% last January. These indexes are harbingers of future
payroll levels.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108d.jpg" align="right" border="0" height="265" width="353">
The length of the average workweek, often a harbinger of
future employment, held steady at 33.2 weeks, its highest level since
February. The workweek in the factory sector also held steady m/m at
40.4 weeks but the figure has been rising since a May low.</p>
<p>Average hourly earnings increased 0.2% after an upwardly
revised November increase. The 2.9% gain for the year as a whole was
its weakest since 2004. Earnings in the factory sector increased 0.3%
and by 2.6% for the year. The durable sector's earnings rose 3.4% y/y
while earnings in the private service sector rose a diminished 3.1%.
Construction sector earnings rose 3.4% y/y though that was up from 1.2%
growth in 2005.</p>
<p>The figures referenced above are available in Haver's <b>USECON</b>
database. Additional detail can be found in the <b>LABOR </b>and
in the <b>EMPL</b> databases.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup><col><col><col><col><col><col><col></colgroup>
<thead><tr>
<th scope="col" class="firstcol"><b>Employment:
000s</b></th>
<th scope="col"><b>December</b></th>
<th scope="col"><b>November</b></th>
<th scope="col"><b>October</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">Payroll Employment</td>
<td>-85</td>
<td>4</td>
<td>-127</td>
<td>-3.1%</td>
<td>-3.7</td>
<td>-0.4%</td>
<td>1.1%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;Previous</td>
<td>--</td>
<td>-11</td>
<td>-111</td>
<td>--</td>
<td>--</td>
<td>--</td>
<td>--</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp;
Manufacturing</td>
<td>-27</td>
<td>-35</td>
<td>-48</td>
<td>-9.9</td>
<td>-10.7</td>
<td>-3.3%</td>
<td>-2.0%</td>
</tr>
<tr>
<td class="firstcol">&nbsp; &nbsp;
Construction</td>
<td>-53</td>
<td>-27</td>
<td>-56</td>
<td>-13.7</td>
<td>-13.5</td>
<td>-5.5%</td>
<td>-0.8%</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp; &nbsp; Service
Producing</td>
<td>-4</td>
<td>62</td>
<td>-18</td>
<td>-1.6</td>
<td>-2.2</td>
<td>0.2%</td>
<td>1.6%</td>
</tr>
<tr>
<td class="firstcol">Average Weekly Hours</td>
<td>33.2</td>
<td>33.2</td>
<td>33.0</td>
<td>33.3 (Dec. '08)</td>
<td>33.1</td>
<td>33.6</td>
<td>33.8</td>
</tr>
<tr class="odd">
<td class="firstcol">Average Hourly Earnings</td>
<td>0.2</td>
<td>0.2</td>
<td>0.3%</td>
<td>2.2%</td>
<td>2.9</td>
<td>3.8%</td>
<td>4.0%</td>
</tr>
<tr>
<td class="firstcol">Unemployment Rate</td>
<td>10.0%</td>
<td>10.0%</td>
<td>10.1%</td>
<td>7.4% (Dec. '08)</td>
<td>9.3%</td>
<td>5.8%</td>
<td>4.6%</td>
</tr>
</tbody>
</table>
<span id="articletitle">OECD LEIs Are Surging Especially
Strong Is The Euro-Area</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> January 8, 2010</span>
<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100108e.jpg" align="left" border="0" height="265" width="353"></p>
<p>The OECD trend-adjusted leading indicators are showing strong
increases compared to past business cycles. The chart shows that
Europe, Japan, and the US have not been as synchronous and stronger
since the expansion from the 1973-75 recession. The expansion from the
1981-82 recession was stronger (at least eventually) for the US but it
took Japan until very late in the cycle to get stronger and Europe
never did show the strength in that cycle that it is showing now, while
it is still early in the cycle. Japan is not yet hitting a home run;
its LEI rise (which is positive over six-months) is still small, but it
also lagged in the recovery from the recession of 1981-82.</p>
<p>On balance the OECD data are impressive. They point to a
recovery in progress. Push the pessimists aside. The main industrial
economies are leading the way forward. It is important to look at the
trends a to not get to caught up in the month to month numbers which
always ebb and flow but whose natural ebb and flow seems more daunting
when the economy is still sputtering.</p>
<p>What we learn in looking at the these indicators and these
various economies&#8217; monthly releases is how much the stock markets
remains priced for good news but bond markets continue to mark jagged
paths as they go from fearing strong growth and inflation to showing
disappointment over current indicators that fall short of robustness.
This sort of back and forth is very much the usual way of things early
in economic recoveries. This recovery is so early in fact that the
label &#8216;recovery&#8217; has yet to be made official by the recession-dating
arbiters.</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 colspan="5" class="firstcol">Growth
Progression-SAAR</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">3Mos</td>
<td style="font-weight: bold;">6Mos</td>
<td style="font-weight: bold;">12mos</td>
<td style="font-weight: bold;">Yr-Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>11.4%</td>
<td>13.7%</td>
<td>6.3%</td>
<td>-9.7%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>12.2%</td>
<td>14.4%</td>
<td>5.7%</td>
<td>-10.4%</td>
</tr>
<tr>
<td class="firstcol">OECD.Euro-Area</td>
<td>12.4%</td>
<td>14.9%</td>
<td>8.5%</td>
<td>-11.0%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>10.8%</td>
<td>12.1%</td>
<td>0.7%</td>
<td>-9.8%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>12.2%</td>
<td>14.2%</td>
<td>4.9%</td>
<td>-10.1%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="5" class="firstcol">Six month
readings at
6-Mo Intervals:</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">&nbsp;</td>
<td style="font-weight: bold;">Recent six</td>
<td style="font-weight: bold;">6Mo Ago</td>
<td style="font-weight: bold;">12Mo Ago</td>
<td style="font-weight: bold;">18MO Ago</td>
</tr>
<tr>
<td class="firstcol">OECD</td>
<td>13.7%</td>
<td>-0.7%</td>
<td>-14.9%</td>
<td>-4.2%</td>
</tr>
<tr>
<td class="firstcol">OECD7</td>
<td>14.4%</td>
<td>-2.4%</td>
<td>-15.9%</td>
<td>-4.6%</td>
</tr>
<tr>
<td class="firstcol">OECD.Eur</td>
<td>14.9%</td>
<td>2.5%</td>
<td>-15.2%</td>
<td>-6.5%</td>
</tr>
<tr>
<td class="firstcol">OECD.Japan</td>
<td>12.1%</td>
<td>-9.6%</td>
<td>-16.7%</td>
<td>-2.4%</td>
</tr>
<tr>
<td class="firstcol">OECD US</td>
<td>14.2%</td>
<td>-3.7%</td>
<td>-15.9%</td>
<td>-3.9%</td>
</tr>
<tr class="odd">
<td colspan="5" class="firstcol">Slowdowns
indicated by
BOLD RED</td>
</tr>
</tbody>
</table>
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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107d.jpg" align="left" border="0" height="265" width="353"></p>
<p>While governments around the world have taken strides to pump
up expenditures to keep economies going the consumer, largely, is still
not on board, at least not in Europe.</p>
<p>Total Euro-Area consumer spending is down by 0.3% in November
after being down in earlier months&#8230;seventeen down months in a row in
fact. Over three months the pace of contraction in Euro-consumer
spending remains about the same as over six months and only a bit less
than over 12-months.</p>
<p>Even motor vehicle registrations that had bumped up on special
government assistance plans across the various Zone countries fell in
off in November. German retailers continue to be hard-hit and to look
for a return of the consumer there.</p>
<p>Overnight Australia reported a 1.4% kick to November sales,
one of the few places besides the US where the consumer seems to be
aware that he has a wallet in his pocket or a purse over the shoulder.</p>
<p>Sustained recovery will require a return of the consumer. Even
in Europe the consumer is large proportion of GDP. Right now Europe
continues to benefit from export led growth; China pushes export led
growth; Japan pushes export-led growth. But for all that to work, the
European consumer, and Japanese consumer will have join in. The
consumer in the US appears to be back in gear but there is not enough
there to feed the global economy with US retail demand. The world
economy needs balance. Other countries must get their consumers in gear
because &#8216;everyone wants&#8217; to sell to the US but &#8216;everyone also wants&#8217;
the US trade deficit to shrink and these two &#8216;everyone wants&#8217; are in
deep conflict with each other. So if &#8216;anyone wants&#8217; logic and
consistency something will have to change.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="6" scope="col"> <b>Euro-Area Retail Sales</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>-0.2%</td>
<td>-0.2%</td>
<td>-2.6%</td>
<td>-2.4%</td>
<td>-3.9%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</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="6" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>0.3%</td>
<td>6.7%</td>
<td>9.6%</td>
<td>3.5%</td>
<td>26.9%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">NonFood Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>0.0%</td>
<td>0.6%</td>
<td>-2.1%</td>
<td>-3.6%</td>
<td>-2.7%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>0.6%</td>
<td>0.4%</td>
<td>2.9%</td>
<td>5.3%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
</body></html>

While governments around the world have taken strides to pump up expenditures to keep economies going the consumer, largely, is still not on board, at least not in Europe. Total Euro-Area consumer spending is down by 0.3% in November [...]

Euro-Nowhere Man Retail Sales In Europe Are Going Nowhere - But Not Very Fast

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<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107a.jpg" align="right" border="0" height="265" width="353">By the
smallest of margins, the job market deteriorated last week but the
trend continued its recent improvement. The Labor Department reported
that initial claims for jobless insurance ticked up 1,000 to open the
New Year at 434,000. Claims stand at the lowest level since late in
August, 2008 and were down from the recession peak of 674,000 hit last
March. Consensus expectations has been for 440,000. The four-week
moving average of initial claims also fell to a new cycle-low of
450,250.</p>
<p>Continuing claims for unemployment insurance during the
latest week again fell sharply. The 179,000 drop was part of a nearly
one-third decline since late-June. Continuing claims were at the lowest
level since January of last year. 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 fell to 5,005,750. This series dates back to
1966.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107b.jpg" align="right" border="0" height="265" width="353">Extended
benefits for unemployment insurance
dropped sharply to 296,534 during the third week of December. The
latest was down by one-half&nbsp; from the peak reached during
November of 597,688.</p>
<p>The insured rate of unemployment also fell to a
new low of 3.6%. The rate reached a high of 5.2% during late-June.
During the last ten years, there has been a 93% correlation between the
level of the insured unemployment rate and the overall rate of
unemployment published by the Bureau of Labor Statistics.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107c.jpg" align="right" border="0" height="265" width="353">The highest insured
unemployment rates in the week ending December 19
were in Alaska (6.7 percent), Oregon (5.9), Puerto Rico (5.8), Nevada
(5.6), Idaho (5.5), Pennsylvania (5.2), Wisconsin (5.2), Montana (5.1),
Washington (5.1), and Michigan (5.0). The lowest insured unemployment
rates were in Virginia (2.0), North Dakota (2.2%), Texas (2.4), Florida
(3.1), Wyoming (3.3), Maryland (3.4), Ohio (3.4), Maine (3.5), New York
(3.6) and Mississippi (3.7). 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>
<p> The
<b>minutes to the latest meeting of the Federal Open Market
Committee</b> can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20091216.pdf">here</a>.&nbsp;</p>
<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" style="color: black;">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b>1/1/10</b></th>
<th scope="col"><b>12/25/09</b></th>
<th scope="col"><b>12/18/09</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>434</td>
<td>433</td>
<td>454</td>
<td>-11.1%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,802</td>
<td>4,981</td>
<td>6.0%</td>
<td>5,835</td>
<td>3,345</td>
<td>2,552</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.6</td>
<td>3.8</td>
<td>3.5 (1/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</span>
</body></html>

By the smallest of margins, the job market deteriorated last week but the trend continued its recent improvement. The Labor Department reported that initial claims for jobless insurance ticked up 1,000 to open the New Year at 434,000. [...]

U.S. Initial Jobless Insurance Claims Nudge Higher

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<span id="articletext">
<p></p>
<p>
<img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107a.jpg" align="right" border="0" height="265" width="353">By the
smallest of margins, the job market deteriorated last week but the
trend continued its recent improvement. The Labor Department reported
that initial claims for jobless insurance ticked up 1,000 to open the
New Year at 434,000. Claims stand at the lowest level since late in
August, 2008 and were down from the recession peak of 674,000 hit last
March. Consensus expectations has been for 440,000. The four-week
moving average of initial claims also fell to a new cycle-low of
450,250.</p>
<p>Continuing claims for unemployment insurance during the
latest week again fell sharply. The 179,000 drop was part of a nearly
one-third decline since late-June. Continuing claims were at the lowest
level since January of last year. 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 fell to 5,005,750. This series dates back to
1966.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107b.jpg" align="right" border="0" height="265" width="353">Extended
benefits for unemployment insurance
dropped sharply to 296,534 during the third week of December. The
latest was down by one-half&nbsp; from the peak reached during
November of 597,688.</p>
<p>The insured rate of unemployment also fell to a
new low of 3.6%. The rate reached a high of 5.2% during late-June.
During the last ten years, there has been a 93% correlation between the
level of the insured unemployment rate and the overall rate of
unemployment published by the Bureau of Labor Statistics.</p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107c.jpg" align="right" border="0" height="265" width="353">The
highest insured
unemployment rates in the week ending December 19
were in Alaska (6.7 percent), Oregon (5.9), Puerto Rico (5.8), Nevada
(5.6), Idaho (5.5), Pennsylvania (5.2), Wisconsin (5.2), Montana (5.1),
Washington (5.1), and Michigan (5.0). The lowest insured unemployment
rates were in Virginia (2.0), North Dakota (2.2%), Texas (2.4), Florida
(3.1), Wyoming (3.3), Maryland (3.4), Ohio (3.4), Maine (3.5), New York
(3.6) and Mississippi (3.7). 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>
<p> The
<b>minutes to the latest meeting of the Federal Open Market
Committee</b> can be found <a href="http://www.federalreserve.gov/newsevents/press/monetary/fomcminutes20091216.pdf">here</a>.&nbsp;</p>
<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" style="color: black;">Unemployment Insurance (000s)</a></b></th>
<th scope="col"><b>1/1/10</b></th>
<th scope="col"><b>12/25/09</b></th>
<th scope="col"><b>12/18/09</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>434</td>
<td>433</td>
<td>454</td>
<td>-11.1%</td>
<td>573</td>
<td>419</td>
<td>321</td>
</tr>
<tr>
<td class="firstcol">Continuing Claims</td>
<td>--</td>
<td>4,802</td>
<td>4,981</td>
<td>6.0%</td>
<td>5,835</td>
<td>3,345</td>
<td>2,552</td>
</tr>
<tr class="odd">
<td class="firstcol">Insured Unemployment Rate (%)</td>
<td>--</td>
<td>3.6</td>
<td>3.8</td>
<td>3.5 (1/2009)</td>
<td>4.4</td>
<td>2.5</td>
<td>1.9</td>
</tr>
</tbody>
</table>
</span>
<span id="articletitle">Euro-Nowhere Man Retail Sales In
Europe Are Going Nowhere - But Not Very Fast</span><br>
<span id="byline">by <a href="/comment/Brusca.html">Robert
Brusca</a> January 7, 2010</span>
<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100107d.jpg" align="left" border="0" height="265" width="353"></p>
<p>While governments around the world have taken strides to pump
up expenditures to keep economies going the consumer, largely, is still
not on board, at least not in Europe.</p>
<p>Total Euro-Area consumer spending is down by 0.3% in November
after being down in earlier months&#8230;seventeen down months in a row in
fact. Over three months the pace of contraction in Euro-consumer
spending remains about the same as over six months and only a bit less
than over 12-months.</p>
<p>Even motor vehicle registrations that had bumped up on special
government assistance plans across the various Zone countries fell in
off in November. German retailers continue to be hard-hit and to look
for a return of the consumer there.</p>
<p>Overnight Australia reported a 1.4% kick to November sales,
one of the few places besides the US where the consumer seems to be
aware that he has a wallet in his pocket or a purse over the shoulder.</p>
<p>Sustained recovery will require a return of the consumer. Even
in Europe the consumer is large proportion of GDP. Right now Europe
continues to benefit from export led growth; China pushes export led
growth; Japan pushes export-led growth. But for all that to work, the
European consumer, and Japanese consumer will have join in. The
consumer in the US appears to be back in gear but there is not enough
there to feed the global economy with US retail demand. The world
economy needs balance. Other countries must get their consumers in gear
because &#8216;everyone wants&#8217; to sell to the US but &#8216;everyone also wants&#8217;
the US trade deficit to shrink and these two &#8216;everyone wants&#8217; are in
deep conflict with each other. So if &#8216;anyone wants&#8217; logic and
consistency something will have to change.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr>
<th colspan="6" scope="col"> <b>Euro-Area
Retail Sales</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td colspan="2">M/M</td>
<td colspan="3">Saar</td>
</tr>
<tr class="odd">
<td class="firstcol">&nbsp;</td>
<td>Oct-09</td>
<td>Sep-09</td>
<td>3-Mo</td>
<td>6-MO</td>
<td>12-Mo</td>
</tr>
<tr>
<td class="firstcol">Zone Total Value</td>
<td>-0.2%</td>
<td>-0.2%</td>
<td>-2.6%</td>
<td>-2.4%</td>
<td>-3.9%</td>
</tr>
<tr>
<td class="firstcol">Food,Bev Tobacco</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="6" class="firstcol">Registrations:</td>
</tr>
<tr>
<td class="firstcol">Motor Vehicle Reg</td>
<td>0.3%</td>
<td>6.7%</td>
<td>9.6%</td>
<td>3.5%</td>
<td>26.9%</td>
</tr>
<tr class="odd">
<td colspan="6" class="firstcol">NonFood
Country detail:
Volume</td>
</tr>
<tr>
<td class="firstcol">Germany Value</td>
<td>0.0%</td>
<td>0.6%</td>
<td>-2.1%</td>
<td>-3.6%</td>
<td>-2.7%</td>
</tr>
<tr>
<td class="firstcol">UK(EU) Volume</td>
<td>0.6%</td>
<td>0.4%</td>
<td>2.9%</td>
<td>5.3%</td>
<td>3.1%</td>
</tr>
</tbody>
</table>
</body></html>

U.S. Initial Jobless InsuranceClaims Nudge Higher

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<span id="articletext">
<p></p>
<p><img src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/100106g.jpg" align="left" border="0" height="265" width="353"></p>
<p>Total orders in the EMU area have fallen m/m in October after
six straight months of increasing. The Yr/Yr drop in orders is a still
substantial 15.2%. Foreign orders Yr/Yr are off by 13.4% while domestic
orders are off by 16.1%. Over three months the Zone&#8217;s domestic orders
are much weaker, falling at a 15.6% pace compared to foreign orders
that are off by just 3.5%. Over six months domestic orders and foreign
orders are up, and foreign orders are up on that span at a 20% annual
rate.</p>
<p>Country detail shows that Germany leads the EMU parade among
large economies. Its orders are still up by 3.5% over three months
despite a dip in October. Still all large EU countries are showing a
fall off in orders growth over three months compared to six months.</p>
<p>In a December report released today the Markit services
indices showed that despite this MFG order weakness in October the
services sector in EMU continued to improve though year-end. The EMU
services sector diffusion index from Markit moved up to 53.63 in Dec.
from 53.04 in Nov. While down on the month France shows the most
strength in the service sector among large EMU members</p>
<p>Still, the MFG sector is the cyclical one and orders data,
though lagging, show that some softening was occurring in October. The
more up-to-date market MFG diffusion surveys show us that MFG progress
has continued though year end but has slowed. EMU is being pulled along
by demand from outside of the region. Export orders continue to be the
driving the EMU expansion. Yet, the EMU currency, the euro, continues
to be high-valued, even if off peak, giving reason to wonder how long
the e-zone will be able to continue to be pulled ahead by its external
sector.</p>
</span>
<table border="0" cellspacing="0" width="100%">
<colgroup></colgroup>
<thead><tr><th colspan="10" scope="col"> <b>Euro Area and UK Industrial Orders &amp; Sales Trends</b></th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Saar except m/m</td>
<td style="font-weight: bold;" colspan="3">% m/m</td>
<td style="font-weight: bold;">Oct<br>09</td>
<td style="font-weight: bold;">Oct<br>09</td>
<td style="font-weight: bold;">Oct<br>09</td>
<td style="font-weight: bold;">Oct<br>08</td>
<td style="font-weight: bold;">Oct<br>07</td>
<td style="font-weight: bold;">Qtr-2<br>Date</td>
</tr>
<tr>
<td class="firstcol">Euro Area Detail</td>
<td>Oct<br>09</td>
<td>Sep<br>09</td>
<td>Aug<br>09</td>
<td>3Mo</td>
<td>6mo</td>
<td>12mo</td>
<td>12mo</td>
<td>12mo</td>
<td>Saar</td>
</tr>
<tr>
<td class="firstcol">MFG Sales</td>
<td>0.3%</td>
<td>-0.8%</td>
<td>2.0%</td>
<td>6.0%</td>
<td>4.8%</td>
<td>-14.2%</td>
<td>-3.0%</td>
<td>6.4%</td>
<td>2.4%</td>
</tr>
<tr>
<td class="firstcol">
Intermediate</td>
<td>-7.1%</td>
<td>6.7%</td>
<td>-3.3%</td>
<td>-15.6%</td>
<td>8.6%</td>
<td>-16.1%</td>
<td>-3.6%</td>
<td>8.6%</td>
<td>9.2%</td>
</tr>
<tr style="font-weight: bold;" class="odd">
<td colspan="10" class="firstcol">MFG Orders</td>
</tr>
<tr>
<td class="firstcol">Total Orders</td>
<td>-2.2%</td>
<td>1.7%</td>
<td>0.5%</td>
<td>-0.4%</td>
<td>18.3%</td>
<td>-12.2%</td>
<td>-15.2%</td>
<td>8.1%</td>
<td>-5.8%</td>
</tr>
<tr>
<td class="firstcol">E-13 Domestic MFG
orders</td>
<td>-7.1%</td>
<td>6.7%</td>
<td>-3.3%</td>
<td>-15.6%</td>
<td>8.6%</td>
<td>-16.1%</td>
<td>-12.6%</td>
<td>8.8%</td>
<td>-22.3%</td>
</tr>
<tr>
<td class="firstcol">E-13 Foreign MFG
orders</td>
<td>-2.6%</td>
<td>7.2%</td>
<td>-5.1%</td>
<td>-3.5%</td>
<td>20.1%</td>
<td>-13.4%</td>
<td>-17.6%</td>
<td>14.8%</td>
<td>1.4%</td>
</tr>
<tr class="odd">
<td style="font-weight: bold;" class="firstcol">Countries:</td>
<td style="font-weight: bold;">Oct<br>09</td>
<td style="font-weight: bold;">Sep<br>09</td>
<td style="font-weight: bold;">Aug<br>09</td>
<td style="font-weight: bold;">3Mo</td>
<td style="font-weight: bold;">6mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">12mo</td>
<td style="font-weight: bold;">Qtr-2<br>Date</td>
</tr>
<tr>
<td class="firstcol">
Germany:</td>
<td>-2.6%</td>
<td>1.5%</td>
<td>2.5%</td>
<td>5.5%</td>
<td>25.0%</td>
<td>-12.6%</td>
<td>-17.3%</td>
<td>11.3%</td>
<td>-4.7%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
France:</td>
<td>-9.2%</td>
<td>4.9%</td>
<td>2.7%</td>
<td>-8.5%</td>
<td>5.7%</td>
<td>-9.8%</td>
<td>-16.8%</td>
<td>5.7%</td>
<td>-28.6%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Italy</td>
<td>0.3%</td>
<td>5.5%</td>
<td>-8.7%</td>
<td>-12.6%</td>
<td>5.9%</td>
<td>-15.4%</td>
<td>-14.6%</td>
<td>5.6%</td>
<td>5.2%</td>
</tr>
<tr>
<td class="firstcol">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
UK(EU)</td>
<td>11.4%</td>
<td>1.6%</td>
<td>-11.7%</td>
<td>-0.1%</td>
<td>45.3%</td>
<td>1.0%</td>
<td>-9.0%</td>
<td>4.9%</td>
<td>57.4%</td>
</tr>
</tbody>
</table>
</body></html>

Total orders in the EMU area have fallen m/m in October after six straight months of increasing. The Yr/Yr drop in orders is a still substantial 15.2%. Foreign orders Yr/Yr are off by 13.4% while domestic orders are off by 16.1%. Over [...]

EMU Orders Take A Step Back

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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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.

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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

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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.

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- 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

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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: January 2010

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