6/10/2012: Irish Industrial Production - August 2012

Per CSO:

• Production for Manufacturing Industries for August 2012 was 0.7% lower than in July 2012. On an annual basis production for August 2012 increased by 0.2% when compared with August 2011.
• The seasonally adjusted volume of industrial production for Manufacturing Industries for the three month period June 2012 to August 2012 was 1.8% higher than in the preceding three month period.
• The “Modern” Sector, comprising a number of high-technology and chemical sectors, showed a monthly increase in production for August 2012 of 5.1% and there was a decrease of 0.9% in the “Traditional” Sector.
• The seasonally adjusted industrial turnover index for Manufacturing Industries decreased by 0.1% in August 2012 when compared with July 2012. On an annual basis turnover increased by 0.2% when compared with August 2011.

Here are some more detailed stats and dynamics:

• Volume of total Manufacturing output was down 3.43% in August compared to same month in 2007 (pre-crisis). 3mo average through August 2012 was up 1.78% on 3mo average through May 2012 and 3.75% ahead of the 3mo average through August 2011.
• August reading for Manufacturing marks the first m/m decline since February 2012.
• Volume of production in All Industries in August 2012 was down 4.68% on same period in 2007. 3mo average through August is 1.75% ahead of 3mo average through May and is 2.72% ahead of 3mo average through August 2011.
• Both Manufacturing and All Industries indicate improved 3mo averages as consistent with modest improvement in output dynamics.
• Volume of activity in Modern Sectors posted the highest reading since October 2011 and the second highest reading since the beginning of comparable series (January 2006). 3mo average through August 2012 is now 1.26% ahead of the 3mo average reading through May 2012 and is 6.59% ahead of the 3mo average through August 2011. Very strong performance in the sector.
• In Traditional Sectors, however, volume of activity fell 14.17% y/y and is now down 20.05% on August 2007 level of activity. 3mo average through August 2012 is down 1.78% on 3mo average through May and is down 4.34% on 3mo average through August 2011.

Chart to illustrate:

• As the result of the above trends, the gap between indices measuring the Volume of production in Modern and Traditional sectors has now widened to 51.5 - the highest reading since the all time record of 56.6 in October 2011.

It is worth noting that Traditional manufacturing sectors are usually associated with higher labour intensity than Modern sectors, implying the disconnection between improvements in overall Manufacturing index (volume) activity and the likelihood of jobs creation acceleration.

Turnover indices:

• Manufacturing sector turnover dipped marginally in August (-0.1% m/m) but is ahead, also marginally, on the annual basis (+0.19%). The index is down 6.9% on August 2007. 3mo average through August 2012 is 5.28% ahead of the 3mo average through May 2012 and is 3.29% ahead of the 3mo average through August 2011.

Lastly, New Orders index:

• New Orders index hit the highest reading in 2012 in August, up 3.4% y/y and 1.16% m/m, although the activity is still down 6.8% on August 2007. 3mo average through August 2012 is 5.5% ahead of 3mo average through May 2012 and 3.9% ahead of the 3mo average through August 2011.

The overall activity in the industrial production is clearly stabilizing at the recovery levels, but as noted above this is solely driven by the activity in Modern sectors.

6/10/2012: Correlation v Causation

An excellent, albeit very reader-friendly (yes, that's a draw back as it trades depth) discussion about the relationship between correlation and causality (link). H/T to Markus Sagebiel ( @msgbi )

6/10/2012: US Payroll Data for September 2012

So far, 2012 has been a volatile year for jobs creation in the US and the latest figures released yesterday confirm this volatility, albeit this time to the pleasant side. Expansion of NF payroll by 114,000 in September came in slightly below expectations, but alongside trend. More significant reading was accorded to the upward revisions for previous level of employment. NF payrolls for July went up from 141,000 to 181,000 and for August from 96,000 to 142,000 - a cumulated increase of 86,000 on previous estimates. However, private sector payrolls rose disappointing 104,000 some 30% below the consensus and up only slightly on 97,000 increase in August. Meanwhile hourly earnings were up 0.3% outstripping both expectations and August flat performance (+0.0%). Average weekly hours worked went up by statistically insignificant 0.1 hours to 34.5 hours.

On the optimism deflating side of things, we have Q1 average increases in NFP of 226,000, followed by Q2 increases in NFP of 67,000. Now we have Q3 at 145,700 average which is 146,200 monthly average. In other words, despite massive revisions, Q3 is not spectacular when it comes to jobs creation.

Headline unemployment figure showed most dramatic change in yesterday's report declining from 8.1% in August to 7.8% in September and bringing US unemployment to the lowest rate since January 2009. This accelerates decline of 0.2% in unemployment rate recorded in August. Good news - labour market participation rate rose from 63.5% in August to 63.6% in September. Which means more people were finding jobs. Alas, back in 2010-2011 the participation rate stood at 64.4% on average, ahead of the current level. And the number of those in employment rose by 873,000 against the drop of those unemployed by 456,000. But, again, that silver lining contains a sizable cloud over it: employment to population ratio rose to just around 58.5%, which is only slightly ahead of 58.4 in 2010-2011 and well behind 62.7% in 2003-2007 and 60.8% in 2008-2009.

However, the decline in unemployment is really an over-exaggeration of the actual labour market performance for a number of reasons:

• A number of commentators correctly pointed that household survey - the basis for calculating unemployment rate - has been returning very volatile readings.
• Ending of the emergency unemployment benefits during the summer also most likely contributed to pushing people into employment (something that would be consistent with increases in employment being predominantly in lower wages and part-time jobs - see below). It is worth remembering that emergency extensions to benefits were cut fully back in May. As the result, unemployment benefits extensions dropped by some 865,000 since May.
• Part-time involuntary employment accounts for 3/4 of the total gains in employment over June-September 2012 with numbers of part-time workers who would like to have a full-time job, but can't find one rising 582,000. Overall, U6 unemployment rate (those unemployed and underemployed) remained at 14.7% in September, showing that virtually all gains in the labour market in the US are low quality. And further confirming this, the percentage of long-term unemployed (in excess of 6 months) in total unemployment rose to 40.1% in September from 40.0% a month before.

See the chart (via Citi Research):

So to the Obama Camp optimists out there - the trend in jobs improvements is exceptionally weak, and at a risk of being derailed completely once electioneering-induced pause in fiscal adjustments is over comes January 2013. And to Mitt Romney Camp contrarians out there - the trend in jobs improvements is still present, if only in a sense of absent deterioration. 

Glass half-full and half-empty...


Update:  and here is an excellent post from the Sober Look blog on the sub-trends in US consumer credit 'growth'...

6/10/2012: Euro area bonds supply calendar for October 2012

Morgan Stanley October bonds supply calendar for euro zone sovereign bonds:

 

And summary of volumes for redemptions, coupons and new issuance:

Ireland's volumes above refer to coupon payments only.

6/10/2012: Art, Mathematics and Science

And to finish off the night of charts galore, here's something charts-graphs related of a softer variety: on art and maths . Enjoy!

5/10/2012: Remember when US was 'decoupling'?

Really cool stuff: Euro area and US default probabilities divergence (via Citi Research):

And on related note of Euro area divergence, US is posting some nice figures today on NFPs, implying this.

Now, remember the days when European 'leaders' were bragging about the US decoupling from the rest of the world?.. Well, it looks like the US, along with the rest of the world, is decoupling from Europe.