Today: U.S. JOLTs! Everything else is slower.
- October Retail Sales: +0.3% vs. +0.2% expected, -0.3% in September.
- Ex-auto +0.3% vs. +0.4% expected, -0.2% prior.
- Last two months: total sales: 0.0%
- Motor vehicles & Parts: –0.7%
- Building Material: –0.2%
- Clothing: –1.0%
- Department stores: –1.4%
Where is the oil tax cut going? Savings! The rule of thumb in retailing is that “as back to school sales go, so go Christmas sales”…
(…) While the most widely-reported headline number was a miss (4.735 million job openings versus 4.8 million expected and 4.835 million previous, revised up to 4.853 million) the internals suggest the marginal worker is gaining confidence and moving in to the market by switching jobs via quits. The quit rate hit its highest level of the expansion (2.0% for all positions, 2.2% for private positions, and 0.8% for government positions) continuing roughly on-trend but representing a dramatic jump versus last month (…)
While wage growth hasn’t kicked in yet, the quit rate is a good sign that employees are gaining confidence and seeing demand; the marginal worker is seeing enough wage enticement to jump ship, and that marginal worker is an increasingly large share of the total labor force.
The context for this improvement in quits is an extremely low level of firings. Layoffs remain near all-time lows.
As a result, total separations rate is still quite low but ticking up, driven by good seperations: quits by workers seeking better opportunities (and likely higher wages) elsewhere.
While the number of job openings ticked down and missed expectations, it’s still on-trend with explosive growth to the upside that went parabolic in Q2 of this year.
On balance this was a very strong report, about as strong as could be expected without raising questions about the validity of the underlying data. Higher worker turnover is unambiguously good for wages, as it represents a more efficient functioning of the labor market during a period of rising labor demand. (…)
Eurozone GDP Shows Meager Expansion The eurozone economy expanded last quarter at a sluggish rate, underscoring concerns that the region is stuck in a rut of declining investment and high unemployment.
(…) Gross domestic product in the 18-member eurozone grew 0.6% last quarter on an annualized basis, the European Union’s statistics office, Eurostat, said Friday. GDP grew 0.2% on a quarterly basis. The figures were slightly better than expected, but still left GDP about 2% below its precrisis peak in 2008. (…)
GDP in Germany, which accounts for about 30% of economic output in the eurozone, was just 0.3% higher at an annualized pace, or 0.1% on a quarterly basis, offsetting the second quarter’s decline. Higher levels of consumer spending and exports offset weakness in business investment.
French GDP expanded at a 1.1% annualized pace after contracting slightly from April to June. But the rise was driven mostly by inventories, meaning more goods produced by French firms sat on store shelves rather than being consumed. That could weigh on activity in coming months as those stockpiles are drawn down. (…)
Italy’s GDP, meanwhile, contracted 0.1% on a quarterly basis. It was the 11th decline in the past 13 quarters, according to BNP Paribas , and left GDP 9% below precrisis levels.
One bright spot was in Spain, the region’s No. 4 economy. Its GDP grew 0.5% on a quarterly basis, which translates into annualized growth of around 2%. (…)
Aggregate financing in October was 662.7 billion yuan ($108 billion), the central bank said today in Beijing, down from 1.05 trillion yuan in September and lower than the 887.5 billion yuan median estimate in a Bloomberg survey of analysts. New local-currency loans were 548.3 billion yuan, and M2 money supply grew 12.6 percent from a year earlier.
Sales of new passenger cars in China remained sluggish by the country’s standards in October, rising 6.4% from a year earlier to 1.7 million, as the slowing economy hurt demand.
The year-over-year growth was the same as in September, which was the weakest since February 2013, when car lots were closed for the weeklong Spring Festival holiday.
In the first 10 months of the year, sales of new passenger vehicles rose 9.8% to 15.86 million units, said the China Association of Automobile Manufacturers, a government-backed industry group. (…)
October is traditionally a strong month for car sales in China. But sales of Volkswagen AG brand cars in China were flat from a year earlier at 230,000 units, while Ford Motor Co. reported lower car sales in October for a second consecutive month. Nissan Motor Co. said its sales in China fell 9% in October from a year earlier and cut its sales target for this year to 1.27 million vehicles from more than 1.4 million.
Growth in total automobile sales, including passenger and commercial vehicles, dropped to 2.8% in October from 20% in the same month last year.
(…) Gross domestic product expanded 0.7 per cent in the third quarter, compared with the same period last year, Russia’s Federal Statistics Service said in a preliminary estimate on Thursday, and down from 0.8 per cent in the second quarter.
The drop was less pronounced than expected, a situation for which economists credit the agricultural sector and a partial revival in industrial production, due to import substitution programmes.
Russia’s harvest was stronger this year than in 2013, which boosted agricultural production in the third quarter. According to monthly data released by the government in October, agricultural output increased 16.6 per cent in September, cushioning continued weakness in most other sectors.
(…) Retailers say the miniboom seems to be especially strong in big cities like Moscow and St. Petersburg, where consumers are wealthier. In Yekaterinburg, the Ural Mountain industrial center, the City Center mall on Lenin Avenue says sales are down about 50% from last year.
Car sales were down 9.9% last month, according to data released Wednesday, but that was the smallest decline in months. In part, that was due to a government-subsidy program for replacing old cars that took effect Sept. 1, according to the Association of European Business, which collects the figures. (…)
To keep sales going, M-Video is trying to delay passing on any devaluation-related price increases on imported goods as long as possible, he said.
Olga Slobodskaya, a lawyer from St. Petersburg said she bought a new Apple laptop last week before ruble prices went up. “The shop assistant was very kind to explain to me that as long as I’m planning to buy it anyway, it is better to do it without delay,” she said.
At previous exchange rates, Apple products cost as much as 30% more in Russia in dollar terms than in the U.S. Now, with the drop in the ruble, the dollar-equivalent prices are roughly even.
Sergei Kurlovich, who owns an Internet wine shop in Moscow, says his October sales tripled from the month before. “With the falling ruble and lower disposable income, people tend to stay at home with a bottle of wine rather than pay a premium in a restaurant,” he said.
Wealthier Russians who have savings have scrambled to pull them out of ruble-denominated accounts and switch into dollars or euros, according to bankers.
Demand for safe-deposit boxes has also surged among Russians worried about bank failures—the boxes are used to store large sums of cash in dollars or euros, according to bankers. (…)
Production vaulted past nine million barrels a day last week for the first time since 1986, the Energy Information Administration said.
IEA Suggests Oil Prices Rout Could Continue A rout in oil prices is likely to continue into the first half of 2015 unless global output is reduced, the International Energy Agency said.
(…) Though the IEA expects demand growth to pick up throughout next year after falling to its weakest level in five years in 2014, it forecasts demand will fall steeply at the start of 2015 compared to the end of this year. Meanwhile, robust oil supply shows no sign of abating. (…)
According to the IEA, OPEC’s output fell by 150,000 barrels a day in October as small reductions from several of the group’s members offset higher output from Libya. However, overall production of 30.6 million barrels a day still remained well above the group’s agreed output ceiling of 30 million barrels a day—the sixth month in a row that the group has over-produced, the IEA said. (…)