Category Archives: India

Payrolls, Vehicle sales, Carrier

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Year over year growth continues to decelerate, and wage growth remains critically low. And participation rates further evidence a massive shortage of aggregate demand, and it’s all only getting worse:

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Highlights

Payroll growth is solid and the unemployment rate is down sharply, but not all the indications from the November report employment are favorable. Nonfarm payrolls rose 178,000 in November to just beat out expectations with revisions no factor, as a sharp downward revision to October, now at 142,000, is offset by a nearly as sharp upward revision to September, now at a sizable 208,000. The unemployment rate fell a very sharp 3 tenths to 4.6 percent for the lowest reading of the cycle, since August 2007.

But now the less positive news. The dip in the unemployment rate is tied, not to greater growth in employment, but to a dip in the participation rate, down 1 tenth to 62.7 percent. And a headline negative in the report is a surprise 0.1 percent decline in average hourly earnings, the first negative reading of the year and more than reversing October’s very strong 0.4 percent gain and driving down the year-on-year rate from a cycle high of 2.8 percent back down to 2.5 percent where it last was in August.

But payrolls are positive and led in November by another major gain for professional & services, up 63,000, and a 14,000 gain for the temporary help subcomponent. Gains in these readings point to demand for short-term labor in lieu of finding full-time labor. Construction is another positive, up 19,000 and reflecting strength in residential building. A negative is an 8,000 decline in retail which indicates that retailers are not gearing up much for the holidays.

For policy makers, the unemployment rate is now at their long-term target though participation is soft — and inflation is still lagging, factors that will give the doves some debate points at what is otherwise likely to be a rate-hike meeting the week after next.

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We’ll see if Trump can do the Tea Party’s bidding as well as Obama did when it comes to keeping down the size of government:

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Car sales used to contribute to GDP growth. Not any more, seems:

Based on a preliminary estimate from WardsAuto, light vehicle sales were at a 17.75 million SAAR in November.

That is down about 2% from November 2015, and down 0.9% from the 17.91 million annual sales rate last month.

From John Sousanis at WardsAuto November 2016 U.S. LV Sales Thread: Light Trucks, Extra Days Boost November Volumes

With two extra selling days in November, U.S. automakers outpaced same-month year-ago sales on a volume basis, despite a 4.6% decline in the daily sales rate (DSR).

Strong light-truck sales were a key factor in November sales, as the industry delivered 1,372,402 LVs – 48,904 more than it did a year-ago, over the course of 25 selling days (vs. 23 last year).
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Year-to-date sales for the industry reached 15.783 million units, giving the first 11 months of 2016 a lead of just 17,542 units over like-2015 heading into December – and keeping alive the prospect that 2016 will break the single-year sales record set last year.

Read more at http://www.calculatedriskblog.com/#SD8fhLAodoqC8dsL.99

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So much for Trump ‘deal making’ hopes:

Trump’s deal with United Technologies includes $7 million in financial incentives provided by Indiana to keep 1,100 jobs at Carrier, the company’s heating and air conditioning unit, in the state. However, Carrier still plans to move roughly 1,300 other jobs to Mexico and close another facility in Indiana.

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Existing home sales, UK headline, Vehicle sales, India, Trump tweeting

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These sales are reported based on actual closings, and they look to have flattened around the 5.5 million/yr rate. But that was before lenders hiked mortgage rates due to Trumpenomics frears, and mortgage purchase apps did drop a full 6% last week. And this number is not ‘population adjusted’:

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Talk about cheerleading- the order book remains in contraction:

UK Factory Orders Rise in November: CBI

The Confederation of British Industry order book balance rose to -3 in November 2016 from an eight-month low of -17 the previous month and beating market expectations of -9. It was the strongest reading since June this year, before the Brexit vote, amid higher expectations for output growth in the next three months (+24 from +13 in October) and inflation (+19 from +8), while export orders fell (-11 from -6).

In other words, 0 or very near 0 growth forecast for 2016 vs 2015:

With an upward bias, November sales are forecast to end at a 17.7 million-unit seasonally adjusted annual rate, the third consecutive month the SAAR finished above the year-to-date total, which stands at 17.3 million through October.
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If November’s outlook holds firm, year-to-date volume will total 15.8 million units, a smidgeon above 11-month 2015’s 15.7 million, but keeping the prospect alive that 2016 could end as a record year.
Read more at http://www.calculatedriskblog.com/#yQFj4O6LyjwloQYQ.99

Pain and gain for India’s economy after drastic withdrawal of cash supplies: Analysts

By Saheli Roy Choudhury

Nov 21 (CNBC) — HSBC’s chief India economist, Pranjul Bhandari, said in a note that about 60 percent to 80 percent of India’s consumption basket is cash-intensive, including food, transport, real estate and restaurants. “We assume that growth for these components halve on the back of the monetary shock,” Bhandari wrote. She expected India’s full fiscal year gross domestic product (GDP) growth to be 0.7 to 1 percentage point lower.

A chief target of Modi’s demonetization efforts is India’s burgeoning shadow economy, which Bank of America Merrill Lynch (BAML) research analyst Sanjay Mookim estimates at 25 percent to 30 percent of GDP. In a note, Mookim said the immediate impact on the black economy could lead to a “much slower consumption,” especially once a new India goods and services tax (GST) kicks in next year.

Analysts pointed out there could still be some beneficial outcomes – first, it would cut the supply of black money circulating the economy and bring some of it into the formal economy over time. Secondly, the government could see tax gains if it succeeds in “unearthing unaccountable money” from the shadow economy, according to analysts from Singapore’s DBS Bank.

As they say, seems he’s ‘not quite right’…

Donald Trump is attacking foes on Twitter like he’s campaigning

Donald Trump tweeted 37 times between the election and Monday afternoon, and nearly half could be considered hostile or defensive.

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Euro consumer confidence, Military accounting, ECB thought…

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The beatings will continue until morale improves…
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The Collapse of Rome: Washington’s $6.5 trillion Black Hole

The Defense Finance and Accounting Service, the agency that provides finance and accounting services for the Pentagon’s civilian and military members, has just revealed that it cannot provide adequate documentation for $6.5 trillion worth of “adjustments” to Army general fund transactions and data. According to a report released July 26 by the by the Inspector General of the US Department of Defense, US military budget practices are out of control. The report notes,

“The Office of the Assistant Secretary of the Army (Financial Management & Comptroller) (OASA[FM&C]) and the Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) did not adequately support $2.8 trillion in third quarter journal voucher (JV) adjustments and $6.5 trillion in year-end JV adjustments made to AGF data during FY 2015 financial statement compilation. The unsupported JV adjustments occurred because OASA (FM&C) and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system-generatedadjustments.” (emphasis added)

(So maybe the ECB should float the idea of replacing Mario Draghi with one of the Governors of the Reserve Bank of Zimbabwe to show they are serious about meeting their inflation target?)

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Housing starts, High end weakness

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Falling off, as previously discussed, particularly multi family, which had been the driver:

Housing Starts
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Highlights
Pulled down by a big drop in multi-family homes, housing starts fell a steep 11.0 percent in October to a 1.060 million annualized rate that is far below Econoday’s low estimate. Starts for multi-family homes, which spiked in September following a springtime jump in permits for this component, fell back 25 percent in the month to a 338,000 annualized rate. Single-family starts fell a much less severe 2.4 percent to 722,000.

And there is important good news in this report. Permits are up, rising 4.1 percent to a 1.150 million rate that hits the Econoday consensus. Single-family permits are up 2.4 percent to a 711,000 rate with multi-family up 6.8 percent to 439,000.

Housing completions fell back in October, down 6 percent to a 965,000 rate that reflects lower work in the Northeast and Midwest. Homes under construction rose 0.9 percent to a recovery best 938,000 rate and are up a very strong 16.4 percent year-on-year, pointing, despite the slip in starts, to ongoing strength for construction spending, at least for October.

But the big drop in starts is definitely a negative for the near-term construction outlook, though the rise in permits points to subsequent strength.

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Sotheby’s Offers Employees Voluntary Buyouts to Cut Costs

Nov 13 (Bloomberg) — Sotheby’s is offering employees voluntary buyouts to cut costs after a drop in third-quarter revenue grabbed more attention from the company’s investors than its largest ever semiannual auction season.

San Francisco in housing ‘correction’

Nov 5 (CNBC) — San Francisco homes are still some of the priciest in the nation, but sales of those houses are showing significant weakness. September sales were down 19.5 percent in the city from a year ago, according to the California Association of Realtors.

“We’re going through a kind of correction, as we have a lot of new developments being built right now. The supply is definitely on the rise,” said Justin Fichelson, an agent at Climb Real Estate Group in San Francisco. “The market is not going to continue going up like we’ve seen in the past two years, because prices are already high.”

London Mansion Prices Fall 11.5% as Home `Bubble’ May Have Burst

Nov 12 (Bloomberg) — Prices of homes valued at 5 million pounds ($7.6 million) or more fell 11.5 percent on a per square foot basis in the third quarter from a year earlier, according to Richard Barber, a director at broker W.A. Ellis LLP, a unit of Jones Lang LaSalle Inc. Sales volumes across all homes in the best parts of central London dropped 14 percent in the period, the realtor said on Thursday.

“The bubble may already have burst” for the most expensive homes, Barber said. Now, “36 percent of all properties currently on the market across prime central London are being marketed at a lower price than they were originally listed at, with the average reduction in price being 8.5 percent.”

Luxury-Jet Market Value Seen Slipping for First Time Since 2009

Nov 15 (Bloomberg) — Global long-term spending on private jets is starting to slow for the first time since 2009 as slumping commodity prices sap demand in emerging markets, according to an industry forecast.

Deliveries for the 11 years ending in 2025 will be valued at $270 billion, Honeywell International Inc. said Sunday in its annual survey of the luxury-aircraft market. That’s down 3.6 percent from last year’s comparable projection, and snapped a streak of gains since the last U.S. recession ended.

The decline reflects weakness in Brazil, Russia, India and China, the group known as the BRIC countries, and the impact of political conflicts in the Middle East and Africa, according to Brian Sill, chief of Honeywell’s business and general aviation unit. Delays in some new plane models are also pushing back demand, he said.

Jet shipments will drop 2.6 percent to 9,200 planes, according to Honeywell, whose forecast had predicted fluctuations in deliveries but no drop in the planes’ list value in the post-recession years. Large planes that had spearheaded the recovery are now seeing slower growth.

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Employment chart, China trade, SNB

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The red line tends to drag down the blue line, often when deficit spending gets too low:
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Exports drop again, imports drop more, so the trade surplus grows, and the US should see more imports and fewer exports, while euro zone imports are down which adds to their trade surplus:

China’s Trade Drop Means More Stimulus Measures Are Coming

Exports drop for a fourth month, import declines match record

Trade surplus to help ease currency depreciation pressure

China’s exports fell for a fourth straight month and imports matched a record stretch of declines, signaling that the mounting drag from slower global growth will push policy makers toward expanding stimulus.

Overseas shipments dropped 6.9 percent in October in dollar terms, the customs administration said Sunday, a bigger decline than estimated by all 31 economists in a Bloomberg survey. Weaker demand for coal, iron and other commodities for China’s declining heavy industries helped drag imports down 18.8 percent in dollar terms, leaving a record trade surplus of $61.6 billion.
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Fiscal stimulus this year includes more infrastructure spending and expanding the lending capacity for the China Development Bank and other policy banks. The PBOC has also made repeated reductions to the amount of reserves required of lenders.

Exports to Japan slumped 9 percent in the first 10 months from a year earlier, while those to the European Union declined 3.7 percent. Shipments to Hong Kong dropped 11.7 percent during the same period.

Slowing Growth

Exports to the U.S., China’s largest trading partner, jumped 5.8 percent in the first 10 months from a year earlier, while those to the Association of Southeast Asian Nations increased 4.2 percent. Shipments to India rose 8.9 percent.

Imports from all 10 of the major trade partners listed by the customs administration declined in the first 10 months. Imports from Australia, a major source of China’s iron ore during the real estate boom, plunged 25.7 percent.

The record trade surplus helped spur a surprise increase in foreign-exchange reserves in October despite an erosion of holdings after the PBOC intervened to boost the yuan. The central bank’s stockpile rose to $3.53 trillion last month from $3.51 trillion at the end of September, the PBOC said Saturday.

“The large trade surplus could offset capital outflow” and curb expectations for the yuan’s depreciation, Liu Ligang, chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong, wrote in a note.

Looks like the Swiss National Bank, with about 550 billion in reserves in its portfolio obtained selling it’s currency for euro to hold the peg, may have been selling some of those euro to buy $ to buy US stocks:

SNB’s Stake in Apple, Microsoft, Exxon Rose in Third Quarter

By Catherine Bosley

Nov 4 (Bloomberg) — The Swiss National Bank owned more shares of Apple Inc., Microsoft Corp. and Exxon Mobil Corp. in the third

quarter, taking its U.S. equity portfolio to $38.95 billion.

Switzerland’s central bank held 10.3 million shares in the iPhone maker on Sept. 30, according to a regulatory filing made to the U.S. Securities and Exchange Commission and published on Wednesday. That compares with 9.4 million shares at the end of June, an increase of nearly 10 percent.

The SNB’s stake in Exxon rose by a similar extent, while in Microsoft it registered an increase of just over 9 percent.

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Draghi Comments, Global Comments

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ECB will do what is needed to keep inflation target on track: Draghi

By Stephen Jewkes

Oct 31 (Reuters) — “If we are convinced that our medium-term inflation target is at risk, we will take the necessary actions,” ECB president Draghi told Il Sole 24 Ore. “We will see whether a further stimulus is necessary. This is an open question,” he said, adding it would take longer than was foreseen in March to return to price stability. Draghi said inflation in the euro zone was expected to remain close to zero, if not negative, at least until the beginning of next year. “From mid-2016 to the end of 2017, also due to the delayed effect of the depreciation in the exchange rate, we expect inflation to increase gradually,” he said.

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Operating conditions deteriorate at a slower pace in October

Nov 2 (Markit) — The China PMI posted 48.3 in October, up from 47.2 in September. Total new business placed at Chinese goods producers declined for the fourth month in a row in October. That said, the rate contraction eased since September’s recent record and was only modest. Softer domestic demand appeared to be a key factor weighing on overall new work as new export business increased for the first time since June, albeit marginally. Nonetheless, a further decline in overall new orders led firms to cut their production schedules again in October.

Weakest deterioration in business conditions since May

Nov 2 (Markit) — The headline Taiwan Manufacturing PMI rose from 46.9 in September to 47.8 in October. Production at manufacturing companies in Taiwan continued to decline in October, as has been the case in each month since April. However, the rate of contraction eased further from August’s 35- month record to the slowest since May. Companies that cut output generally attributed this to poor economic conditions and fewer new orders. The latter was highlighted by a further fall in total new work in October. As was the case with output, however, the rate of reduction was the weakest seen in five months.

Manufacturing conditions deteriorate at weak pace

Nov 2 (Markit) — The South Korean manufacturing PMI posted at 49.1, down slightly from 49.2 in September. Production at South Korean manufacturers declined for the eighth successive month in October. According to anecdotal evidence, global economic uncertainty and poor demand conditions contributed to the latest fall in output. Supporting the fall in output was a decline in total new orders during the month. A number of panellists mentioned unstable economic conditions and a decline in sales from both domestic and international clients as factors behind the latest contraction.

S.Korea Oct exports post worst drop in over 6 yrs as global demand sags

Oct 31 (Reuters) — The trade ministry attributed the declines mainly to a sharp fall in ship contracts and low oil prices. Exports fell 15.8 percent on-year to $43.5 billion in October, their 10th straight month of declines and the sharpest fall since August 2009. Imports slumped 16.6 percent to $36.8 billion. The trade surplus fell to $6.7 billion in October from a revised $8.9 billion in September. The slump in exports was partially expected by economists as South Korea posted a record high in shipments last year.

Growth of manufacturing production wanes further

Nov 2 (Markit) — Posting a 22-month low of 50.7 in October (September: 51.2), the seasonally adjusted Nikkei India Manufacturing PMI waned. Output growth eased in October on the back of a slower increase in new orders. Rates of expansion in both production and order books were the weakest in their current 24-month sequences of growth, with panellists reporting challenging economic conditions and a reluctance among clients to commit to new projects. New business from abroad placed with Indian manufacturers rose for the twenty-fifth straight month in October.

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German Trade, Japan

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Exports down but so are imports, indicating a weak global economy and continued euro support from trade net flows:

Germany : Merchandise Trade
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German exports plunge at fastest pace since global financial crisis

Oct 8 (Reuters) — German exports plunged in August. Data from the Federal Statistics Office showed seasonally-adjusted exports sliding by 5.2 percent to 97.7 billion euros month-on-month, the steepest drop since January 2009. Imports tumbled by 3.1 percent to 78.2 billion euros, the biggest one-month decline since November 2012. Germany’s trade surplus narrowed to 19.6 billion euros. Germany’s auto industry accounts for roughly one in five jobs. It accounted for 17.9 percent of Germany’s 1.1 trillion euros ($1.25 trillion) in exported goods last year.

Out of the frying pan and into the fire:

Japan : Machine Orders
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Highlights
Core machine orders retreated for a third month in August. Core machine orders sank 5.7 percent on the month – expectations were for an increase of 3.2 percent. The monthly decline followed drops of 3.6 percent in July and 7.9 percent in June. On the year, orders were 5.2 percent lower. Total orders plunged 14.6 percent.

Manufacturing orders slid 3.2 percent while nonmanufacturing orders dropped 6.1 percent on the month. In an indication of weak international trade, overseas orders plummeted 26.1 percent on the month.

Needless to say, the government downgraded its view – said orders are marking time. Core machine orders are considered a proxy for private capital expenditures.

Japan out of deflation, Kuroda says

Oct 8 (Nikkei) — Japan has exited deflation and the overall inflation trend has risen steadily, Bank of Japan Gov. Haruhiko Kuroda said Wednesday. Kuroda emphasized price hikes, arguing that daily and weekly price indexes show a significant change from last year. Growth in the UTokyo Daily Price Index, which tracks changes in supermarket prices using data from Nikkei Inc., is hovering near 1.5%. Companies are passing higher labor and other costs on to customers, who are accepting the resulting price increases. Kuroda hinted that even a cut to inflation projections caused by the slump in crude oil would not be enough to merit more stimulus.

Japan’s August core machinery orders down 5.7% on month

Oct 8 (Kyodo) — Japan’s core private sector machinery orders fell a seasonally adjusted 5.7 percent in August from the previous month to 759.4 billion yen ($6.33 billion). The government cut its basic assessment, saying core machinery orders are “at a standstill.” Orders from the manufacturing sector dropped 3.2 percent to 347.9 billion yen in August, down for the third straight month, while those from the nonmanufacturing sector slid 6.1 percent to 422.1 billion yen for the second straight monthly fall. Overseas demand for Japanese machinery, an indicator of future exports, plunged 26.1 percent to 872.3 billion yen.

Japan service sector sentiment worsens in September

Oct 8 (Economic Times) — Japan’s service sector sentiment index fell to 47.5 in September, a Cabinet Office survey showed on Thursday. The survey of workers such as taxi drivers, hotel workers and restaurant staff – called “economy watchers” for their proximity to consumer and retail trends – showed their confidence about current economic conditions slipped from 49.3 in August. The outlook index, indicating the level of confidence in future conditions, rose to 49.1 in September from 48.2 the previous month. The Cabinet Office started compiling the data in comparative form in August 2001.

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Cartoon, US International Trade, India, Redbook Retail Sales, China Comments, Consumer Confidence

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As previously discussed, trade deficit increasing:

United States : International trade in goods

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Definition
The Census Bureau is now publishing an advance report on U.S. international trade in goods. The BEA will incorporate these data into its estimates of exports and imports for the advance GDP estimates. This is expected to reduce the size of revisions to GDP growth in the second estimates.

Just maybe the higher rates have been supporting the higher inflation? And supporting growth?

India cuts policy rate by bigger-than-expected 50 bps

Sept 29 (Reuters) — The Reserve Bank of India cut its policy interest rate to a 4-1/2 year low of 6.75 percent on Tuesday, in a bigger-than-expected move that, with inflation running at record lows, could help an economy in danger of slowing down.

A Reuters poll last week showed only one out of 51 economists had expected a 50 basis points cut in the repo rate , while 45 had expected a 25 bps cut.

The RBI had previously cut interest rates three times this year, lowering it by 25 basis points each time.

The RBI justified the bigger reduction, saying consumer inflation was likely be running at 5.8 percent, below the 6 percent target for January, thanks partly to the government’s efforts to contain food prices.

Redbook retail sales dismal and dragging along the lows:
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Barclays analysts visited China and came back saying it was one of the most bearish trips they’ve ever taken

Good number here but not confirmed by sales reports, at least not yet:

Consumer Confidence
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Layoffs, Claims, Trade

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Challenger Job-Cut Report
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Highlights
In perhaps the first warning of serious trouble from the oil patch, Challenger’s layoff count starts off the year with an elevated reading, at 53,041 for the highest reading since February 2013 and the highest January reading since 2012. Readings in December and November were much lower, at 32,640 and 35,940.

The energy sector represented roughly 40 percent of January’s cuts, at 20,193. Cuts in the energy sector were minimal in the fourth-quarter, averaging only 1,330 per month. The sector seeing the second largest number of cuts in January is retail, at 6,699 in downsizing following the holidays.

Jobless Claims
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Highlights
The jobs market is healthy based on jobless claims where initial claims, though up 11,000, came in at a much lower-than-expected 278,000 in the January 31 week, keeping the bulk of the improvement from the prior week’s revised 42,000 fall. The 4-week week average, down a sizable 6,500 in the week to 292,750, is trending right at the month-ago level in a comparison that points to another healthy monthly employment report for tomorrow.

Continuing claims, reported with a 1-week lag, are also at healthy levels though the month-ago comparison is less favorable. Continuing claims in the January 24 week rose 6,000 to 2.400 million while the 4-week average, though down 22,000, is at a 2.421 million level that is slightly above the month-ago trend. The unemployment rate for insured workers is holding at a recovery low of 1.8 percent.
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Negative productivity/jump in unit labor costs = over hiring given actual output?

Productivity and Costs
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Highlights
Nonfarm productivity growth for the fourth quarter declined an annualized 1.8 percent, following a 3.7 percent jump in the third quarter. Expectations were for a 0.2 percent rise. Unit labor costs increased 2.7 percent after falling an annualized 2.3 percent in the third quarter. Analysts projected a 1.2 percent gain.

Output growth softened to 3.2 percent in the fourth quarter, following a 6.3 percent jump the prior quarter. Compensation growth posted at 0.9 percent annualized after 1.3 percent the quarter before.

Year-on-year, productivity was unchanged in the fourth quarter, down from 1.3 percent in the third quarter. Year-ago unit labor costs were up 1.9 percent, compared to up 0.9 percent in the third quarter.

International Trade
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Highlights
The U.S. trade balance for December widened instead of narrowing as expected. Lower oil prices actually cut into petroleum exports.

In December, the U.S. trade gap grew to $46.6 billion from a revised $39.8 billion in November. Analysts forecast the deficit to narrow to $37.9 billion. Exports were down 0.8 percent after declining 1.1 percent the month before. Imports rebounded 2.2 percent after falling 1.8 percent in November.

Expansion in the overall gap was led by the goods excluding petroleum gap which increased to $49.7 billion from $46.3 billion in November.

The petroleum goods trade gap posted at $14.7 billion from $11.6 billion in November. Petroleum imports were up 7.7 percent while exports decreased 11.6 percent.

The services surplus was essentially unchanged at $19.5 billion.

On a seasonally adjusted basis, the December figures show surpluses, in billions of dollars, with
with South and Central America ($2.6), Brazil ($0.4), and United Kingdom ($0.1). Deficits were recorded, in billions of dollars, with China ($30.4), European Union ($12.7), Germany ($5.6), Mexico ($5.6), Japan ($5.4), Canada ($3.3), South Korea ($2.7), OPEC ($2.3), India ($2.1), Italy ($2.1), France ($1.1), and Saudi Arabia ($1.0).

Overall, the December number will likely lower estimates for fourth quarter GDP growth. But the good news is that the import numbers suggest that demand is moderately healthy.

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mtg purch apps, adp

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Weaker, and down 8% year over year, even with much lower rates.

MBA Purchase Applications
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Highlights
Mortgage application activity fell sharply in the 2 weeks to January 2, down 5.0 percent for purchase applications and down 12.0 percent for refinancing applications. The trend for purchase applications, which offers an indication on underlying home purchases, is clearly negative, at a year-on-year minus 8.0 percent.

The declines come despite low mortgage rates with the average 30-year rate down slightly in the 2-week period to 4.01 percent for conforming loans ($417,000 or less). Note that today’s report covers not the usual 1-week period but, due to a holiday for MBA, a 2-week period.
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Remember, this is now a forecast of Friday’s number, and not the ‘core’ ADP employment itself.

ADP Employment Report
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Highlights
ADP’s estimate for private payroll growth for December is 241,000 vs the Econoday consensus for 235,000 and against ADP’s upwardly revised 227,000 for November (initial estimate 208,000). Turning to government data, the corresponding Econoday consensus for Friday’s jobs report is 238,000 vs November’s 314,000.

Imports down, but exports down as well, which could be a trend as surveys have been indicating deceleration.

International Trade
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Highlights
The U.S. trade balance again narrowed and more than expected. And again, improvement was largely due to lower oil prices.

In November, the U.S. trade gap narrowed to $39.0 billion from a revised $42.2 billion in October. Market expectations were for the deficit to narrow to $41.5 billion. Exports were down 1.0 percent after gaining 1.6 percent the month before. But imports declined a sharp 2.2 percent after rising 0.7 percent in October.

Shrinkage in the overall gap was led by the petroleum goods trade gap which dropped to $11.4 billion from $15.2 billion in October. Petroleum imports were down 11.9 percent while exports rose 5.9 percent.

The goods excluding petroleum gap increased to $45.7 billion from $45.2 billion in October. The services surplus was essentially unchanged at $40.4 billion.

On a seasonally adjusted basis, the November figures show surpluses, in billions of dollars, with South and Central America ($4.3) and Brazil ($0.6). Deficits were recorded, in billions of dollars, with China ($29.8), European Union ($12.7), Germany ($6.3), Japan ($5.6), Mexico ($4.4), South Korea ($2.9), Italy ($2.3), India ($1.7), France ($1.6), OPEC ($1.6), Canada ($1.4), Saudi Arabia ($1.3), and United Kingdom ($0.2).

Overall, the November number will likely bump up estimates for fourth quarter GDP growth.

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