Daily Insight
Group Economics Macro & Financial Markets Research
11 May 2016
Q2 payback in eurozone Nick Kounis Head Macro & Financial Markets Research Tel: +31 20 343 5616 nick.kounis@nl.abnamro.com Maritza Cabezas Senior Economist
German and French industrial production weak in March…
…providing an early sign that Q2 GDP will slow sharply after Q1 surge
US job openings strong, but expected to slow down in the coming months
Labour market tightening cooling down a bit…
…as other indicators measuring jobs market dynamics lose some momentum
Tel: +31 20 343 5618 maritza.cabezas@nl.abnamro.com
Industrial production data slump in Germany and France Weak industrial production data in Germany and France in March provided an early sign that the eurozone economy slowed in Q2 after the surge in growth in Q1, which may itself be revised down. German industrial production fell by 1.3% mom following a 0.7% fall in February (revised from -0.5%). Although factory orders, which lead production, rose strongly in March, this follows weakness in previous months and the underlying trend is one of rather modest growth (orders were up by 0.6%in Q1). Meanwhile, French industrial production declined by 0.3% mom after a 1.3% fall in February (revised from -1%). Trends in the less volatile manufacturing sector were softer still (-0.9% following -1.4%). We think the eurozone economy remains on a modest recovery trajectory, which is unlikely to boost underlying inflationary pressures any time soon. US job openings lagging nonfarm payrolls mn
change in 000s
6000 5500 5000 4500 4000 3500 3000 2500 2000
600 400 200 0 -200 -400 -600 -800 -1000 00
02
04
06
Job openings (lhs)
08
10
11
13
15
Nonfarm payrolls (rhs)
Source: Bloomberg
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Daily Insight – Q2 payback in eurozone – 11 May 2016
US job openings strong, but historically are lagging nonfarm payrolls The US Job Openings and Labour Turnover Survey (JOLTS), which is watched as a complementary measure of the labour slack in the economy showed job openings surging to 5.8 mn in March, up from the revised February level of 5.6 mn. The 149k increase, which was led by better labour demand in the service sector, brought job openings to the second highest level on record since the JOLTS data were first published in 2000. However, historically job openings tend to lag nonfarm payrolls. It’s likely that job openings may slow in the coming time, in line with an economy growing at a softer pace (see chart above).
Hiring and separations, indicators of labour market dynamics, slow On top of this, in the same report, other indicators, which measure the dynamics in the labour market slowed in March. Hiring declined to 5.3 mn (previous: 5.5 mn), and the hires rate fell to 3.7% (previous: 3.8%). Elsewhere, the quits rate – one metric of labour market confidence – was unchanged on the month at 2.1%, while the total separations rate fell to 3.5% (previous: 3.6%). Combining these data with the jobs market report from the Bureau of Labor Statistics suggest that the labour market is less strong than in the past year, when hiring and separations for instance, where clearly pointing to less slack in the labour market. We expect job growth to moderate this year.
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Daily Insight – Q2 payback in eurozone – 11 May 2016
Day
Date
Sunday Sunday
08/05/2016 08/05/2016
Monday Monday Monday
09/05/2016 09/05/2016 09/05/2016
Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday
10/05/2016 10/05/2016 10/05/2016 10/05/2016 10/05/2016 10/05/2016
Wednesday Wednesday Wednesday
11/05/2016 11/05/2016 11/05/2016
Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday
12/05/2016 12/05/2016 12/05/2016 12/05/2016 12/05/2016 12/05/2016 12/05/2016 12/05/2016
Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday
13/05/2016 13/05/2016 13/05/2016 13/05/2016 13/05/2016 13/05/2016 13/05/2016 13/05/2016 13/05/2016 13/05/2016
Time
Country
Key Economic Indicators and Events
Period
Latest outcome
Consensus
CN CN
Imports Exports
Apr Apr
-10.9 -1.8
-4.2 0.4
08:00 11:10 19:00
DE US US
Manufacturing orders - % mom Fed's Evans speaks on Economy and Policy (nv) Fed's Kashkari speaks (nv)
Mar Mar Mar
1.9 -1.2 -1.2
1.0 1.0 1.0
03:30 06:30 08:00 10:30 12:00 16:00
CN NL DE GB US US
CPI - % yoy CPI - % yoy Industrial production - % mom Trade balance - GDP mln NFIB small business optimisme - index US Job Openings by Industry
Apr Apr Mar Mar Apr Mar
2.3 0.0 -1.3 -3830 94 5757
2.3
CN CN CN
Property prices index - % yoy Property prices index - % yoy M2 money growth - % yoy
Apr Apr Apr
1370 2336 13.4
10:00 11:00 13:00 13:00 14:00 17:00 17:45 19:30
NO EC GB GB IN US US US
Policy rate - % Industrial production - % mom Policy rate - % BoE size of asset purchase programme - GBP bn CPI - % yoy Fed's Mester speaks about inflation dynamics (v) Fed's Rosengren speaks (v) Fed's George speaks on economy (v)
May 12 Mar May 12 May Apr
0.5 -0.8 0.5 375 4.8
06:30 08:00 08:00 11:00 14:30 14:30 14:30 16:00 16:00
NL DE DE EC US US US US US KR
GDP - % qoq CPI - % yoy GDP - % qoq GDP - % qoq Retail sales - % mom Prod. prices index excl food and energy - % mom Prod. prices index - % mom Univ. of Michigan cons. confidence - index Business inventories - % mom Policy rate - %
1Q P Apr F 1Q P 1Q Apr Apr Apr May P Mar May 13
0.3 -0.1 0.3 0.6 -0.3 -0.10 -0.1 89.0 -0.1 1.5
-0.1
ABN AMRO
0.6
0.5 -0.3
840.7 1347.2 13.5
0.0 0.5
0.5 -0.2 0.5
0.4 -0.1 0.6 0.6 0.7 0.10 0.3 89.8 0.1
0.6 0.5 0.8
Source: Bloomberg, Reuters, ABN AMRO Group Economics (we provide own forecasts only for selected k ey variables and events)
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