The December payrolls report came out broadly in line with expectations, while the previous figures were sharply downwardly revised. In December, employment dropped by 542 000 against the consensus expectation of 525 000. The November figure was downwardly revised from -533 000 to -584 000, and the October outcome was amended from -320 000 to -423 000. All revisions taken into account, employment dropped by 153 000 more than expected. The unemployment rate came out higher than expected, rising from an upwardly revised 6.8% to 7.2%, while the consensus expected a figure of 7.0%. The civilian labour force dropped from 154.6 million to 154.4 million and the number of people unemployed rose from 10.5 million to 11.1 million. Especially the goods-producing sector (-251 000 from -182 000) worsened as both manufacturing (-149 000 from -104 000) and construction (-101 000 from -85 000) deteriorated. In the service providing sector, another 273 000 (from - 402 000) jobs were cut, while the government sector added 7 000 jobs. Temporary help agency jobs remained weak (-81 000 from -86 000), while, education and health grew 45 000 (from 47 000). Another remarkable signal is that the average weekly hours worked declined from 33.5 to 33.3, clearly below the peak of 33.8 in April. In 2008, the total annual job loss was 2.589 million, the largest annual decline since 1945. Although the decline in employment was less than in November, the details suggested an eventually even weaker economy in December.
EMU: Retail sales rebound in November
In November, euro zone retail sales surprised on the upside, rising 0.6% M/M. The October figure was downwardly revised from -0.8% M/M to -1.0% M/M. Looking at the details, both food (0.5% M/M from -0.8% M/M) and non-food (0.6%M/M from - 1.10% M/M) products were rising. On a yearly basis, retail sales dropped by 1.5% Y/Y, while the consensus expected a decline of -1.7% Y/Y.
Both in France and in Germany, industrial production came out weaker than expected in November. French industrial production plunged by 2.4% M/M, while the previous figure was sharply downwardly revised. German industrial production dropped by 3.1% M/M from a revised -1.8% M/M in October. In both countries, the manufacturing sector was hardest hit. With both German and French industrial production significantly weaker than expected, we see the risks on the downside of expectations for the euro zone report, released on Wednesday.
Other: UK industrial production drops sharply
In the UK, industrial production showed the ninth consecutive decline in November. On a monthly basis, industrial production plunged by 2.3% M/M, while the consensus was expecting a drop of 0.5% M/M. The decline was due to a 2.9% M/M drop in manufacturing, while mining and quarrying (2.2% M/M) and oil and gas (2.0% M/M) were rising. Although the data are rather outdated, they confirm again that the UK manufacturing sector is seriously suffering from the global recession.
