In December, employment plunged 693 000 according to the ADP report. This is clearly below the consensus estimate of -493 000 and the downwardly revised November figure (-476 000). Looking at the details, employment dropped 473 000 (from -304 000) in the service providing sector, 220 000 (from -172 000) in the goodsproducing of which 120 000 (from -101 000) in the manufacturing sector. Is the weaker than expected result partially due to the revised approached in the estimation process? It will be interesting to see whether this new approach by ADP delivers a better estimation of the non-farm payrolls. Assuming government payrolls are broadly unchanged in December, the ADP report would point to a 700 000 decline in payrolls.
EMU: German unemployment shows first rise since January 2006
In Germany, the number of people unemployed rose 18 000 in December, while the consensus was looking for a rise of 10 000. The previous figure was upwardly revised from -10 000 to -4 000. The number of jobs created dropped from 31 000 in October to 23 000 in November and the number of vacancies fell 9 000 in December. The unemployment rate stayed unchanged at 7.6% in December, while the November figure was upwardly revised from 7.5% to 7.6%. These data indicate that the German labour market is showing its first signs of deterioration.
Euro zone PPI plunged 1.9% M/M in November after falling 0.8% M/M in the month before. On a yearly basis, PPI dropped to 3.3% Y/Y (from 6.3% Y/Y) while the consensus expected producer price inflation to come out at 4.4% Y/Y. Excluding energy, producer prices fell 0.8% M/M in November.
