Brisk Job Gains Ease Fed’s Path U.S. employers hired at their strongest pace this year in October and wage growth showed signs of picking up, indications of labor-market vigor likely to reassure Federal Reserve officials as they weigh raising interest rates in December.
Nonfarm payrolls rose a seasonally adjusted 271,000 last month, the Labor Department said Friday. Revisions showed employers added a combined 12,000 more jobs in September and August than previously estimated, bringing the year’s average to 206,000. The unemployment rate fell to 5%, a level Fed officials expected it to reach by year’s end and near the 4.9% rate they project as normal in the long run.
Average hourly earnings of private-sector workers rose at a 2.5% annual pace in October. (…)
Many of the hires in October were in domestically oriented service sectors that are largely immune to overseas turbulence, including retail, food services, health care and construction.
Some of the latest hiring could reflect retailers getting an early jump on what they expect to be a strong holiday season. Retail jobs rose by 44,000 in October, and major retail chains like Macy’s and Target are offering more hours and higher pay to attract workers for the holidays. Even for nonsupervisory workers in the retail sector, average hourly pay rose 2.7% over the past year to $14.90 an hour, outpacing the overall annual wage growth.
The dollar gained sharply against the euro and the yen. Yields on Treasurys rose, with the rate-sensitive two-year note at 0.889%, the highest close since May 2010. (…)
Note that even though manufacturing had zero new jobs in October, 271,000 jobs were created elsewhere, best since December 2014. Job growth was broadly based as the private diffusion index reached 61.8%, also its best level of 2015. Retailers added 44,000 jobs, the most since November 2014, likely saying that sales are not bad at all.
Speaking of manufacturing, Canadian manufacturing payrolls rose 6,500 in October, equivalent to 65,000 in U.S. terms, underscoring the effect of the 25% drop in the Loonie. BTW, private sector jobs in Canada jumped 41,300 in October, some 413,000 in U.S. terms! And wage growth reached 3.1% YoY.
Which brings the wage issue at the forefront:
Once AHEs start to accelerate, they are like a runaway train, going from +2.0% to +4.0% in roughly three years, eventually forcing the Fed to hike to stop the train. It happened in 1987-88, in 1996-97, and in 2005-06.What’s happening in the auto industry is symptomatic:
[UAW President Dennis] Williams took an unconventional path in this round of contract talks by starting with Fiat Chrysler, the smallest and weakest company. Workers there rejected the first agreement the UAW reached by a 2-to-1 margin. Williams went back to the bargaining table and won additional wages and benefits and workers then ratified it by a 2-to-1 margin.
UAW-represented workers at Fiat Chrysler Automobiles approved a new four-year agreement with the carmaker after negotiators revised a rejected, earlier deal that failed to provide a pathway for entry-level Tier 2 workers to achieve full pay.
The Fiat Chrysler deal set an eight-year path from hiring to top pay, which goes from $17 per hour to nearly $30 per hour. Fiat Chrysler workers hired after 2007 won a ratification bonus of $3,000, and those hired before 2007 got $4,000 bonuses.
That deal will raise Fiat Chrysler’s hourly wage costs—including all benefits—by 12% to nearly $54 an hour from $48, according to people familiar with the financial details of the contract.
(…) The deal included “substantial economic gains†for members, the union said in an e-mailed statement that didn’t provide financial details. Along with raises for hourly workers and better health-care plans for entry-level staffers, Ford’s UAW members will get $10,000 — $8,500 for ratification plus a $1,500 advance on profit-sharing payouts — if they accept the deal, said the people, who asked not to be identified because members haven’t yet seen the details. GM workers got an $8,000 ratification bonus, double what senior Fiat Chrysler Automobiles NV workers got. (…)
Like the pacts at GM and FCA, the Ford deal also includes two 3 percent hourly wage raises and two bonus checks equal to 4 percent of pay for the veteran workers. Ford workers will also be eligible for an annual competitiveness bonus of $1,750, compared with $1,500 at GM, the people said. (…)
Ford’s average labor cost, including benefits, is about $57 an hour, or $10 more than at the U.S. operations of Fiat Chrysler or Toyota Motor Corp. and $2 more than at GM, according to the Center for Automotive Research in Ann Arbor, Michigan.
General Motors Co.’s tentative agreement with the United Auto Workers was rejected by skilled-trades workers, preventing ratification of a contract that would have delivered more than $2 billion in improved wages and benefits over the deal’s four-year term. (…)
More than 55 percent of members voted to accept the agreement as 58 percent of the production workers, the larger group, favored it, the UAW said Friday in an e-mailed statement. Both units are supposed to approve a contract for it to be ratified, according to the union’s rules, though there have been exceptions. (…)
“They could go back and renegotiate the terms of the deal that apply to skilled trades,†said Harley Shaiken, a labor professor at the University of California at Berkeley, said in a telephone interview. “The skilled have always been more independent and they know they are key to making the plants run effectively. They have been independent and powerful since the formation of the union.†(…)
The union had secured higher pay and top-level health-care benefits for entry-level production workers, who would be able to make as much as $29 an hour — up from a maximum of $19.25 now — and get medical coverage with no premium like traditional UAW workers do. Members of both worker groups were to get $8,000 for approving the pact.
UAW Vice President’s name is Jimmy Settles!
And in case you missed these:
- Oct. 20: Fedex approved a contract for pilots with a 10% signing bonus and 3% pay increases for 6 years.
- Oct. 21: NetJets to hike pilot pay 30% over 5 years.
- Oct. 22: ADP said that average hourly wages for same job employees rose 3.5% in Q3, from +2.5% in Q2 and +1.9% in Q1.
- Oct. 23: Pulte said it is paying more to attract and retain labor.
- Oct 26: United Air reaches tentative deal with wage hike for maintenance workers The deal provides for a 25 percent raise for United’s highest-earning technicians, to $46.15 per hour. It also includes an offer for a $100,000 buyout for at least some workers and furlough protection.
Back to AHE: simple math: employment is +2.0% YoY, add the +0.3% increase in the workweek, = hours worked +2.3%. AHEs are up +2.5%, so the nominal income proxy is +4.8%. Inflation: 0.0%. Real labor income: +4.8%!
If the Fed thinks that consumer expenditures will stay muted with such real income growth, it will rapidly get behind the curve.
BTW:
Outstanding consumer credit, a reflection of nonmortgage debt, rose $28.9 billion, or at a 10% annual rate, in September, the Federal Reserve said Friday, the largest percentage increase since April 2014.
Revolving credit, mostly credit cards, rose at a 8.7% annual rate. In August, it rose at an annual rate of 5.3%. Nonrevolving credit, made up mostly of auto and student loans, increased at an annual rate of 10.5%, up from a rate of 5.7% in August.
And not to put you to sleep on this but be informed that mattress unit sales jumped 9.9% in September. On a trailing three-month basis, September mattress units increased 4.9%.
(…) There are several reasons for believing that inflation expectations will shift away from deflation in the coming months:
1. Global industrial production has started to rebound
(…) All these drags on industrial activity have now started to abate, and output growth has rebounded quite sharply from the low points in mid year. (…)
2. Inflation rates in the advanced economies have stopped falling
Almost all the decline in headline inflation rates seen in the advanced economies this year has stemmed from the collapse in commodity prices. This episode is now over.
It is almost certain that the 12-month inflation rates in both the US and the euro area will soon start rising again. Much of this will happen automatically, as the base effects from falling commodity prices a year ago disappear from the picture. Even if commodity prices fall further, the comparison with the rate of decline a year ago will improve.
The graph shows the results of an inflation forecasting model estimated by Juan Antolin-Diaz at Fulcrum, incorporating the behaviour of core and headline inflation, the exchange rate and crude oil prices. The most pertinent conclusion is that headline inflation is set to rise sharply in the imminent future, especially in the US where inflation will be back at 1.5 per cent by January.
More importantly, core inflation (excluding food and energy) has already started to rise, notably in the euro area, and it is likely to track gradually higher throughout 2016. (…)
3. Inflation expectations in the markets have started to rise again
Inflation expectations have not yet returned to pre-shock levels, especially in the US, where the threat of Fed tightening is probably overhanging the markets. Nor are they yet in line with the central banks’ 2 per cent inflation targets. But they will probably continue to rise as headline inflation recovers sharply in coming months. As the credibility of the 2 per cent targets are reinforced, deflation becomes less likely.
4. China devaluation risk has abated for now
One of the root causes of the deflation scare in August was the bungled devaluation of the Chinese renminbi, at least in its communication to the markets. Producer price inflation in China has been negative for 3 years, and investors have been concerned that this deflationary impetus would be exported to other countries via a large devaluation of the renminbi.
However, the Chinese authorities now seem to have decided that this would not be in their best interests, if only because it would threaten the renminbi’s entry into the SDR, which now seems imminent. China’s foreign exchange reserves rose unexpectedly in October, and the markets’ perception of Chinese devaluation risk has abated, for now at least.
For all these reasons, the danger of global deflation stemming from the 2014/15 commodity shock has passed its peak. Inflation expectations in the bond markets, and therefore nominal bond yields, may not have fully recognised this.
Supporting material from U.S. Global Investors:
China Exports Slump as Global Demand Shrinks China’s exports fell in October for the fourth consecutive month, as diminishing global appetite for the country’s goods weighed on a once-powerful engine of its growth.
Not easy to decipher China trade numbers given opacity, poor reporting, price swings and exchange rate movements. Here are some of the facts as far as I could find this morning:
- China’s General Administration of Customs said October exports fell 6.9% year-over-year in dollar terms, after a drop of 3.7% in September. The October figure was worse than the median 4.1% decline forecast by 11 economists in a survey by The Wall Street Journal.
- Imports in October fell by a sharper-than-expected 18.8% from a year earlier, after a 20.4% fall in September. China’s trade surplus widened in October to $61.64 billion from $60.3 billion in September. (…)
- While the value of China’s imports declined by 15% year on year in the first nine months, volumes fell 4%.
- Stripping out price, volumes of Chinese imports in October fell a more modest 2.6 per cent from a year earlier, according to estimates from Oxford Economics.
- China’s trade-weighted exchange rate was 8.5 per cent stronger in September than a year earlier, making Chinese exports less competitive.
- Overseas shipments dropped 3.6 percent in October in yuan terms, the customs administration said Sunday, compared with a 1.1 percent decline in September. Imports fell for a 12th straight month, declining 16 percent in yuan terms, after a 17.7 percent decrease the prior month.
- In the first 10 months of the year, Chinese exports to the US were up 5.2 per cent from the same period in 2014, while exports to countries in Asean were up 3.7 per cent, according to Chinese customs figures.
- Exports to the EU, Japan and Hong Kong — which serves as a transit point for exports to many other parts of the world — fell by 4.1 per cent, 9.5 per cent and 12.2 per cent respectively.
Economic Liberalization As China’s slowdown continues, Beijing is delaying key economic-liberalization policies in hopes of propping up growth.
(…) “Reform itself faces huge problems,†said an attendee at the Sept. 22 meeting, which gathered officials of the National Development and Reform Commission—the planning agency—and the finance ministry, according to the minutes, reviewed by The Wall Street Journal. “It’s doubtful that any reform dividends can be translated into economic growth in the foreseeable future.†(…)
In the weeks following, China has taken new steps to slow plans that had been meant to loosen control over the financial system, adding to similar delaying moves since summer. Some steps have the effect of keeping industries on life support. On Oct. 23, the central bank scrapped its cap on deposit rates. But it backed away from freeing interest rates from its control, as it was previously expected to do, saying it feared that might raise funding costs for businesses and consumers.
Other steps seek to hold money in the domestic economy rather than letting it flow abroad. On Oct. 30, the central bank and other agencies dialed back on plans for Shanghai’s free-trade zone, a testing ground for financial overhauls, that would have let residents more easily buy foreign assets. (…)
“The outlook for the economic situation is quite pessimistic,†a finance-ministry official said at the Sept. 22 meeting, “and probably is worse than people think.†(…)
“Stability now trumps everything else.†(…)
China is moving to open markets in an “orderly†way, Mr. Yi wrote, a switch in tone for a central banker who long talked about “speeding up†market opening. (…)
Beijing is very serious in its fight against too big a slowdown in economic growth. ISI calculates that there have been 79 stimulus measures approved in 2015. The party has now placed economic stability above everything else. A Ministry of Finance official said that China needs to revisit its deficit-to-GDP and debt-to-GDP ‘redline.’
Positive signs are emerging: house prices are firming and passenger vehicle sales are up 11.3% YoY in October following a government tax cut from 10% to 5% on small-engine car purchases. Vehicle sales are back on trend as this ISI chart illustrates.
Thailand remains a distant last place in terms of economic growth among its Southeast Asian peers, plodding along at roughly half the rate of Malaysia, Indonesia and the Philippines. The Bank of Thailand expects a lacklustre 2.7 per cent growth this year.
The country’s export-driven economy has suffered nine consecutive months of contraction in overseas sales, while private consumption struggles under record levels of household debt.
Millions of rural Thais have seen their incomes evaporate because of weak prices for agricultural commodities, especially rice and rubber. (…)
EARNINGS WATCH
Factset:
With 444 (88%) of the companies in the S&P 500 reporting actual results for Q3 to date, more companies are reporting actual EPS above estimates (74%) compared to the 5-year average, while fewer companies are reporting sales above estimates (46%) relative to the 5-year average. In aggregate, companies are
reporting earnings that 5.4% above the estimates. This surprise percentage is above both the 1-year (+4.8%) average and the 5-year (+4.8%) average.
The blended (combines actual results for companies that have reported and estimated results for companies yet to report) earnings decline for Q3 2015 is now -2.2% (-2.1% last week). If the Energy sector is excluded, the blended earnings growth rate for the S&P 500 would jump to 4.5% from -2.2%.
The blended revenue decline for Q3 2015 is now -3.7%. In aggregate, companies are reporting sales that are 0.1% above expectations. This surprise percentage
is below both the 1-year (+0.7%) average and the 5-year (+0.7%) average. If the Energy sector is excluded, the blended revenue growth rate for the S&P 500 would jump to 1.4% from -3.7%.
At this point in time, 75 companies in the index have issued EPS guidance for Q4 2015. Of these 75 companies, 56 have issued negative EPS guidance and 19 have issued positive EPS guidance. Thus, the percentage of companies issuing negative EPS guidance to date for the fourth quarter is 75%. This percentage is above the 5-year average of 72%.
Thomson Reuters’ tally shows total EPS down 1.1% in Q3 which includes Energy down 57% and Materials down 15.3%. The average growth for the other 8 sectors is +6.4% compared with +7.8% in Q2 for the same 8 sectors.
Trailing 12-month EPS are now $119.19, only $0.08 below their level after Q2. The current forecast is for TTM EPS to be $118.34 after Q4, 0.7% lower.
Note that S&P’s own tally gives TTM EPS at $103.63 after Q3, 15% below TR’s. This is due to S&P’s treatment of asset impairment charges taken by Energy and Materials companies in the last 12 months due to the collapse of commodity prices. S&P calculates that ex-Energy, its tally of EPS would be up 0.2% YoY in Q3.
TR’s tally of corporate pre-announcements is more positive than Factset’s. TR has 81 companies having pre-announced with 17 positive and 54 negative (67%). These compare with 15 positives and 56 (71%) negatives at the same time last year.
Big Banks Could Be Forced to Raise Up to $1.19 Trillion in New Securities Global financial regulators published new rules that aim to stop banks from becoming “too big to fail†in an effort to prevent a repeat of the experience of the 2008 financial crisis.
(…) The new standards aim to make banks change the way they fund themselves to better weather a crisis, a requirement that could force some firms to issue billions in new securities and debt and possibly dent profits.
The rules will apply to the world’s top 30 banks, such as HSBC Holdings PLC, J.P. Morgan Chase & Co. and Deutsche Bank AG, which the FSB classifies as “systemically important.†Banks are considered to be systemically important if their failure would pose a broad threat to the economy. (…)
Under the plan, large lenders will have by January 2019 to hold a financial cushion of at least 16% of their risk-weighted assets in equity and debt that can be written off. The minimum total loss absorption capacity, or TLAC, requirement will gradually increase, reaching 18% of assets weighted by risk by January 2022.
Banks supervisors estimated that the 18% standard would require banks to raise €1.11 trillion ($1.19 trillion) of loss-absorbing securities by 2022.
The rules also see a requirement for the leverage ratio—the ratio of capital held by a bank against its total assets. The minimum standard requires large banks to hold at least 6% of their total assets as capital by 2019, rising to 6.75% by 2022. (…)
Still, the new rules are more favorable to banks than what was seen in the regulators’ original proposal launched last November, which suggested the minimum TLAC requirement could be as high as 20%. (…)
SENTIMENT WATCH
(…) David Kostin, chief U.S. stock strategist at Goldman Sachs Group Inc., forecasts that the S&P 500 will average a total annual return of 5% for the next 10 years, including 2% from dividends and 3% from price gains.
He forecasts that the S&P will fall about 4% between now and year-end, not including dividends, leaving the index down about 2.9% for 2015. He projects a 5% index gain in 2016, with dividends adding 2% more.
His reasoning: Higher interest rates will hold back stock gains by making money less easily available. With stock prices well above average by most measures, the ratio of prices to earnings should decline as rates rise, meaning stocks will likely rise more slowly than profits.
“That combination leads to a slowly rising stock market,†Mr. Kostin said. (…)
Not everyone is expecting weak stock performance. Stocks often have their biggest gains in the last three months of the year. Some predict a global economic revival next year, fueling more gains. Few expect an outright bear market, or a decline of 20% or more. (…)
Hedge-Fund Prodigy Takes a $300 Million Hit Star money manager Nehal Chopra’s Tiger Ratan Capital Fund LP has fallen about 33% in three months, one of the swiftest and most severe money-losing streaks in a bruising year for hedge funds.
(…) The Valeant position accounted for more than one-fifth of Tiger Ratan’s U.S. stock portfolio in its most recent public filings.
Tiger Ratan is also suffering losses from a bet on European cable conglomerate Altice NV, which as recently as last month was the largest holding in the firm’s portfolio, a person familiar with the matter said. (…)
Ms. Chopra, 35 years old, was a highly ranked tennis player as a teenager in her native India before she moved to the U.S. at age 18 to attend the University of Pennsylvania. Shortly after graduating from Wharton early, she went to work for Lehman Brothers Holdings Inc. and later hedge-fund firm Balyasny Asset Management LP. (…)
She obviously missed the lessons on judgment, prudence and common sense…and forgot she was managing other people’s money, too busy collecting her 2-20 fees. 
Takeover Loans Have Few Takers on Wall Street Wall Street banks are struggling to sell billions of dollars of buyout loans, a sign that investor appetite for riskier debt remains muted despite a robust autumn rally in other financial markets.
(…) For now, loan investors have lost their appetite only for the riskiest deals while relatively high junk credit ratings still attract buyers. Investment banks are growing reluctant to back new deals with heavier debt loads or in troubled industries like energy and pharmaceuticals. That in turn makes it harder for potential acquirers to capture takeover targets. The stresses contrast to a boom in sales of debt considered less risky, or investment grade.
The banks must sell the loans by year’s end to minimize holdings of risky assets that require capital charges under new regulations. But buyers have lost their taste for riskier loans because prices of such debt dropped sharply in September and October, saddling investors with losses. (…)
Since the start of October, 91% of global public-company takeovers have included cash as a portion of the consideration, the highest since the current M&A boom began two years ago, according to FactSet.
Cash, including sums borrowed from banks and raised in debt markets, accounts for 71 cents of every dollar committed to takeovers in the fourth quarter to date, up from 53 cents in the fourth quarter of last year.
The San Francisco-based company on Friday said it expects to sell 27 million shares at between $11 and $13 each in an initial public offering, much less than what some investors paid for their shares a year ago.
Square’s pricing could serve as a reality check for the more than 120 tech companies with valuations of at least $1 billion, a club that has ballooned this year. (…)
Square, which was co-founded and is now run by Twitter Inc. Chief Executive Jack Dorsey, agreed to give extra shares to certain investors in its last round if its IPO price was below the private financing. If Square goes public at $12, it will have to give 5.3 million shares, or about 1.6% of its total, to investors including venture-capital firm Rizvi Traverse Management LLC, J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. (…)
A March analysis by law firm Fenwick & West found that 30% of private companies valued at $1 billion or more had agreed to give investors protection against a down IPO. (…)
As of Nov. 6, at least 13 of 50 venture-capital-backed U.S. technology companies with IPOs since the start of 2014 were trading below the per-share value where they last raised money as a private company, an analysis of stock-sale documents by The Wall Street Journal shows. (…)
In recent weeks, startups seeking funding have lowered expectations for valuations and mutual-fund investors have marked down the value of their stakes in private tech companies. (…)
Square, used by businesses ranging from retail shops and restaurants to cabdrivers, counts Starbucks Corp. as one of its biggest customers. However, Square said Starbucks will stop using Square before the third quarter of next year. Last year, sales through Starbucks accounted for 17% of Square’s revenue.
Like many other Silicon Valley tech firms, Square has posted growing sales but swelling losses. The company said revenue rose 49% in the first nine months of this year, to $892.8 million. Over the same period, its loss widened to $131.5 million, from $117 million. (…)
OIL
The Saudis seem to be back talking oil up.
(…) Algeria, Iran and Venezuela—which have been heavily hit by lower oil prices in the past year—supported language in the report saying the group wanted to maximize revenue and restore the ability to either influence prices or production, the delegates said.
Those goals clashed with language advocating “fair†prices as a goal, which was proposed by OPEC’s central secretariat and supported by Saudi Arabia, the group’s kingpin, the delegates said.
Though it may seem like semantics, “it’s a debate that goes at the heart of the organization’s existence,†an attendee said.
The report is produced every five years and lays out a five-year outlook on the oil producer group’s goals, prospects and challenges. (…)
Officials have told the Financial Times that the world’s largest exporter will produce enough oil to meet customer demand, indicating that the kingdom is in no mood to change tack ahead of the December 4 meeting in Vienna of the producers’ cartel Opec.
“The only thing to do now is to let the market do its job,†said Khalid al-Falih, chairman of the state-owned Saudi Arabian Oil Company (Saudi Aramco). “There have been no conversations here that say we should cut production now that we’ve seen the pain.†(…)
For higher-cost producers, “$100 oil was perceived as a guarantee of no risk for investmentâ€, said Mr Falih. “Now, the insurance policy that’s been provided free of charge by Saudi Arabia does not exist any more.â€
Mr Falih, who is also health minister, forecast the market would come into balance in the new year, and then demand would start to suck up inventories and storage on oil tankers. “Hopefully, however, there will be enough investment to meet the needs beyond 2017.†(…)
“Now everyone is running to the exit and projects are being cancelled,†said Mr Falih. “That’s necessary, but what will happen five to 10 years from now? Investment is needed.â€
The scale of the global oil and gas industry’s spending cuts are making another surge in energy prices possible by diminishing future supply, Saudi Vice Minister of Petroleum & Mineral Resources Prince Abdulaziz bin Salman said.
Investments have been cut by $200 billion this year and will drop another 3 percent to 8 percent next year, marking the first time since the mid 1980s that industry cut the spending for two consecutive years, Prince Abdulaziz said in a copy of his speech for delivery to energy ministers in Doha Monday. Nearly 5 million barrels a day of projects have been deferred or canceled, he said in the remarks. (…)
Oil demand is expected to be 94 million barrels a day this year, rising 1.5 percent from last year, with about 2 million barrels a day of spare capacity, mainly held in Saudi Arabia, the prince said in the prepared remarks. Growth in Asia’s demand may slow “by efforts to efficiency enhancement and oil substitution,†he said.
“But the petroleum industry should not lose sight of the fact that scale matters,†with billions of people moving up into the middle class, the prince said. The size of the world’s middle class will expand from 1.8 billion to 3.2 billion in 2020, and to 4.9 billion in 2030, with the bulk of this expansion occurring in Asia, he said.
“Rather than being a commodity in decline, as some would like to portray, supply and demand patterns indicate that the long-term fundamentals of the oil complex remain robust.â€
Supporting material from U.S. Global Investors:
Meanwhile, U.S. shale oil production keeps falling at swift rates if the AAR rail stats are any guide (and they have been the best guide so far):
U.S. Class I railroads originated 101,167 carloads of crude oil in Q3 2015, down 9,901 carloads (8.9%) from the second quarter of 2015 and down 31,090 carloads (23.5%) from the third quarter of 2014, which is the peak quarter for rail crude oil originations. Our best estimate is that the average rail carload of crude oil today contains 682 or so barrels (somewhat more in North Dakota, somewhat less elsewhere). Using 682 barrels, the 101,167 carloads originated by U.S. Class I railroads in Q3 2015 was around 760,000 barrels per day.ï‚·
What’s driving the surge in inventories? It’s mostly retailers, which includes auto dealers, but manufacturers’ and wholesalers’ inventories also have been creeping up. But the figures aren’t wildly out of line with prerecession norms. (…)
(…) Gross domestic product—the broadest measure of a nation’s economic activity—shrank at an annualized pace of 0.8% in the July-September period from the previous quarter, government data showed Monday. That followed a revised 0.7% contraction in the second quarter. (…)
Trivia question: What was the annualized rate of core inflation in the Euro area during the last 3 months: 
