Haver’s data services are provided through the DLX platform; delivering tools for data management, visualization, modeling and publishing. DLX is designed to increase productivity and integrates with Excel, PowerPoint, and major statistical software packages; MatLab, R, Python, SAS, E-views and Stata. DLX component application DLXVG3 offers precision graphics, publishing, analytic tools, and easy navigation for all Haver databases.

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Chart and compare multiple data series with accompanying data table of values

Advanced functions (growth rates, moving averages, aggregation, seasonal adjustment)

Analytical tools (cycle charts, scatterplots, trend lines, and recession shading)

Complete graph customization (axis scaling, sizing, formatting, styles)

Excel and PowerPoint direct export and complete integration (dynamic spreadsheets and presentations update on a click)

DLXVG3

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DLX Add-ins for all versions of Excel provide instant data updates of entire workbooks

Use DLXVG3 to locate data series codes from within any file, easily creating new spreadsheets for analysis

Edit date ranges, archive data, apply functions

Excel Spreadsheet Add-ins

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Haver offers timely, accurate, and professionally supported data via an update service, meeting the strictest demands of the institutional research community

AutoUpdate provides fast and reliable data updates within seconds of source releases

Timer service runs continuously on an hourly basis when DLX is running

Manual updates offer clients the independence to update data retrievals on any desired schedule

All database updates retrieve only the data series that have changed and send only the data points that have been updated; including revisions

Timely Updates

DLX software tools to convert data into many different formats needed for diverse analytical frameworks

Haver supports a DLX API permitting clients to leverage and build processes with DLX data

Database Compatibility

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Data Link Express

Platform Independent site delivering DLX Databases across any workstation or device.

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HaverView

[Matlab](http://matlab.com) by The MathWorks lets you access, visualize, and analyze historic time-series data to identify patterns or uncover complex relationships. From within a single environment you can:

- Access data from multiple sources including files, spreadsheets, databases, data providers, and the Web
- Store data in financial time-series objects to simplify data management, data transformation, missing-data handling, and date-math calculations
- Perform technical analysis with moving averages, oscillators, stochastics, and indices
- Create custom analysis routines and visualizations or animations to capture, present, and share your analysis processes and discoveries
- Customize your analysis environment with advanced functionality from signal processing, statistics, or econometrics

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MATLAB

[Stata Data Analysis and Statistical Software](https://www.stata.com) by StataCorp LP is an integrated statistical package designed for researchers of all disciplines. It provides the ability to do data analysis, data management and graphics and has features such as multiple imputation, factor variables, GMM, competing-risks regression, state-space modeling, predictive margins, and more.

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Stata

[SAS](https://www.sas.com) provides an integrated environment for predictive and descriptive modeling, data mining, text analytics, forecasting, optimization, simulation, experimental design and more. From predictive analytics to model deployment and process optimization, SAS provides a range of techniques and processes for the collection, classification, analysis and interpretation of data to reveal patterns, anomalies, key variables and relationships, leading ultimately to new insights and better answers faster.

[SASEHAVR](http://support.sas.com/documentation/cdl/en/etsug/67525/HTML/default/viewer.htm#etsug_sasehavr_gettingstarted01.htm) is a seamless interface between Haver and SAS data processing that enables SAS users to read economic and financial time series data that reside in a Haver Analytics DLX (Data Link Express) database. [SASEHAVR](http://support.sas.com/documentation/cdl/en/etsug/67525/HTML/default/viewer.htm#etsug_sasehavr_gettingstarted01.htm) requires both SAS/ETS and Base SAS Software.

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[RATS (Regression Analysis of Time Series) Econometric Software](https://estima.com) by Estima is a leading econometrics and time-series analysis software package. It provides ability to do linear and non-linear least squares, forecasting, SUR and ARIMA models and in addition, supports advanced techniques such as GMM, ARCH and GARCH models, state space models, and more.

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RATS

Session 1: Bootcamp Part 1

Visualization with GGPlot2 and data analysis

Session 2: Bootcamp Part 2

Session 3: Univariate Models Part 1

Session 4: Univariate Models Part 2

Session 5: Vector Autoregressions

Session 6: Cointegration and error-correction models

A popular open source option for statistical computing and graphics that is available on many UNIX platforms, Windows and MacOS

Estimating, evaluating, and forecasting ARIMA models

Understanding the concept of non-stationarity and testing for unit roots

Estimating autoregressions, granger causality tests, and impulse response functions

Understanding the concept of cointegration and testing using the Enger-Granger test

Estimating and forecasting with vector error correction models

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Teaches econometrics and forecasting at the University of Colorado Denver. He has over 15 years of econometric experience in both the private and public sector.

Daniel L. Jerrett, Ph.D.

Abdel M. Zellou, Ph.D.

Bootcamp and Econometric Tools 1 & 2

Econometrics Training: Applied Time Series in R

Session 5: Multivariate Models Part 1

Session 6: Multivariate Models Part 2

Haver partners with SmartMacro Labs to offer a two week immersive online course introducing participants to the power of the Python programming language. This applied hands-on training develops statistical economics skills with a concentration on economics and finance.

Gain proficiency in building modern time-series models in Python through real-world applications. Designed for professionals in both the public and private sector, the course does not require prior experience, assuming only that participants have a basic understanding of regression and statistical concepts.

Proficiency working in Jupyter notebooks and the Python environment

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Remote Training: Applied Time Series in Python

Resilient US economy pushing up Blue Chip 2026 outlook

Andrew Cates

**The Global Monetary Policy Consensus**
The latest Blue Chip Financial Forecasts survey points to a notably more balanced global monetary policy outlook over the coming year. In contrast to the pronounced easing bias that dominated much of the past two years, expectations are now more symmetric, with a similar number of central banks projected to raise rates as to ease policy. Japan is seen delivering further tightening, while Canada is expected to initiate an interest rate hike in coming months. In Australia’s case, this tightening guidance was reinforced this week, with the Reserve Bank lifting its policy rate by 25 basis points. Elsewhere, and in contrast, the euro area, UK and US are expected to move in the opposite direction.

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**US manufacturing activity**
The second chart underscores the recent improvement in US economic momentum, highlighted by an unexpected surge in the January ISM manufacturing PMI. After spending much of the past year hovering below the 50 threshold consistent with stagnation, the index jumped sharply back into expansionary territory, signalling a renewed pickup in industrial activity. This rebound has coincided with a broader run of stronger-than-anticipated US economic data, as reflected in the upswing in the Citigroup Economic Surprise Index. Together, these developments point to a US economy that continues to display notable resilience, complicating expectations of monetary easing in the near term.

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**US Bank Lending Standards and Financial Stress** 
The next chart turns to US financial conditions, highlighting the latest readings from the Senior Loan Officer Opinion Survey. The net proportion of banks tightening lending standards on corporate loans and mortgages is now more modest by historical standards, and well below the extremes seen during past episodes of financial stress. Some easing in credit headwinds has occurred alongside relatively subdued readings on the OFR Financial Stress Index, which continues to hover below its long-run average. Together, these indicators suggest that the US financial system has continued to avoid the kind of acute stress typically associated with sharp slowdowns in credit availability—helping to underpin the recent resilience in economic activity.

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**Semiconductor Sales**
The fourth chart highlights the renewed surge in global semiconductor sales, with momentum strengthening sharply over recent months across the Americas, China and the broader Asia-Pacific region. After the cyclical downturn in 2022–23, sales have rebounded to fresh highs, reflecting a powerful revival in demand for advanced chips and related technologies. This upswing has taken place amid intense investor preoccupation with artificial intelligence, with expectations that AI adoption will drive a sustained wave of capital spending on data centres, cloud infrastructure and high-performance computing. In contrast, semiconductor sales in Europe remain comparatively subdued, reflecting the region’s smaller footprint in high-end chip manufacturing, weaker industrial demand, and the ongoing impact of slower economic growth. While semiconductors are inherently cyclical, markets have increasingly interpreted the current rebound elsewhere as structural rather than purely cyclical—underpinned by the belief that AI represents a transformative and durable source of demand growth.

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**Large-Scale AI Models**
The next chart illustrates the rapid proliferation of large-scale AI models globally, with newly updated data for 2025 pointing to a further sharp acceleration in development activity. The United States continues to lead by a wide margin, while China has also seen a steep rise in model deployment in recent years, underscoring the intensifying technological competition between the two economies. Growth in the UK and other regions has been more modest by comparison, highlighting the increasingly concentrated nature of AI innovation. Taken together with the surge in semiconductor sales, these trends help explain the market’s strong preoccupation with AI as a potential driver of future productivity and investment cycles—although the geographic concentration of activity also raises questions about the uneven distribution of any resulting economic gains.

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**An AI Bubble?** 
The final chart draws on the latest Blue Chip Financial Forecasts special questions, highlighting market participants’ perceptions of the economic gains likely to be delivered by artificial intelligence. While a sizeable share of respondents still believe that financial markets may be overestimating AI’s potential benefits, an increasing proportion now judge current expectations to be broadly accurate, with only a small minority viewing the gains as underestimated. Notably, this represents a softening in scepticism compared with the survey results from last month, when concerns about excessive market optimism were more pronounced. The shift suggests a growing acceptance that AI-related investment and innovation could translate into meaningful economic impacts—though uncertainty remains high around the scale, timing and distribution of these gains.

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Financial markets have experienced renewed gyrations in recent weeks, as shifting geopolitical risks, questions around Federal Reserve independence, renewed talk of US dollar “debasement,” and ongoing enthusiasm surrounding artificial intelligence have combined to drive volatility across asset classes. These cross-currents have also contributed to a degree of rotation away from high-flying technology stocks, as investors reassess valuations and the timing of anticipated AI-driven gains. Against this backdrop, the charts in this week’s COTW highlight several important themes. Policy rate expectations now appear more balanced globally, marking a clear shift away from the one-sided easing bias of the past two years (chart 1), even as resilient US data—underscored by the unexpected jump in the January ISM index and a run of positive economic surprises—continues to complicate the outlook for monetary easing (chart 2). At the same time, US financial conditions remain relatively benign, with limited evidence of widespread credit stress or aggressive tightening in lending standards (chart 3). Meanwhile, the sharp rebound in semiconductor sales and the accelerating rollout of large-scale AI models underscore why investors remain so focused on the AI narrative, even as Europe lags behind due to weaker industrial momentum and a smaller footprint in advanced chip production (charts 4 and 5). Finally, while some scepticism about AI’s ultimate economic impact persists, the latest survey results suggest a moderation in concerns that markets are materially overestimating its gains (chart 6). Taken together, these developments paint a picture of a US economy that remains more resilient than many had anticipated, set against a financial landscape increasingly shaped by powerful—if sometimes competing—narratives around geopolitics, policy, and technological transformation.

Charts of the Week: Balanced Policy, Resilient Data and AI Narratives

Winnie Tapasanun

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**Total job openings** fell 5.6% m/m (-12.9% y/y) to 6.542 million in December after a downwardly revised 7.0% decline to 6.928 million in November (previously -4.1% m/m; 7.146 million), according to the Job Openings and Labor Turnover Survey. December marked the third consecutive m/m fall and the lowest level since September 2020. The job openings rate declined to 3.9% in December, the lowest since April 2020, from 4.2% in November, remaining below a record-high 7.4% in March 2022. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings. Significantly, the drop in job openings also lowered the **ratio of job openings to unemployed individuals** to 0.872 in December—the lowest since March 2021—from 0.890 in November, down from 1.085 in December 2024 and a pre-pandemic 1.211 in February 2020. A reading of 0.872 implies there were about 0.87 open jobs per unemployed person—indicating fewer openings than unemployed workers. December was the fifth time in six months that this ratio remained below 1.0.

**Private sector job openings** fell 6.8% (-12.5% y/y) to 5.804 million in December after a 6.6% fall to 6.227 million in November, registering the third successive m/m decline and the lowest level since September 2020. The private sector job openings rate fell to 4.1% in December, the lowest since April 2020, from 4.4% in November. The December m/m decline in private sector openings reflected drops of 27.7% (-36.9% y/y) in financial activities, 20.2% (-25.5% y/y) in professional & business services, 14.4% (-5.1% y/y) in trade, transportation & utilities, and 5.2% (-12.4% y/y) in private educational & health services. To the upside, private sector openings in the following categories rose m/m in December: other services (21.1%; 11.0% y/y), mining & lodging (17.6%; 0.0% y/y), information (13.5%; -4.7% y/y), manufacturing (8.5%; 0.5% y/y), leisure & hospitality (7.5%; -17.2% y/y), and construction (2.8%; 42.4% y/y). Meanwhile, government job openings rose 5.3% (-15.6% y/y) in December, the first m/m rise in three months, after a 10.6% drop in November.

**Total hiring** rebounded 3.4% (-1.5% y/y) to 5.293 million in December, the first m/m increase since September, following a 4.6% decrease to 5.121 million in November. The hiring rate edged up to 3.3% in December from 3.2% in November, though it remained below pre-pandemic levels. **Private sector hiring** rose 3.1% (-0.4% y/y) to 4.978 million in December, the third m/m rise in four months, after a 4.0% decline to 4.826 million in November. The private sector hiring rate rose to 3.7% in December from 3.5% in November, the same as in October and September. The December m/m increase in private sector hiring was led by a 32.1% jump (42.3% y/y) in information, followed by gains of 24.0% (-4.6% y/y) in financial activities, 23.5% (0.0% y/y) in mining & lodging, 6.5% (-4.8% y/y) in private educational & health services, 4.2% (-4.9% y/y) in trade, transportation & utilities, 3.6% (6.1% y/y) in construction, 3.4% (7.9% y/y) in leisure & hospitality, and 1.8% (-4.3% y/y) in manufacturing. To the downside, private sector hiring in professional & business services (-5.2%; +0.5% y/y) and other services (-4.3%; -16.5% y/y) declined m/m in December. Meanwhile, government hiring rebounded 6.4% (-16.3% y/y) in December, the first m/m rise since September, following a 13.5% drop in November.

**Total separations** rose 2.1% (3.3% y/y) to 5.251 million in December after a 1.5% rise to 5.144 million in November, marking the third m/m increase in four months and the highest level since September. The total separations rate edged up to 3.3% after holding at 3.2% in November and October. Private sector separations rose 1.6% (4.2% y/y) to 4.932 million in December, the highest level since June, while government sector separations jumped 10.4% (-9.1% y/y) to 319,000 following two consecutive m/m declines. **Total quits** (voluntary separations initiated by the employee) increased 0.3% (3.5% y/y) to 3.204 million in December, the third m/m rise in four months and the highest level since June, after a 7.4% rebound in November. The quits rate (a measure of workers’ willingness or ability to leave jobs) held at 2.0% in December and November, slightly below 2.3% in February 2020. Private sector quits eased 0.2% (+4.5% y/y) following an 8.4% November rebound. **Layoffs and discharges** (involuntary separations initiated by the employer) increased 3.6% (5.6% y/y) to 1.762 million in December, up for the third time in four months, after an 8.1% drop in November. The layoffs & discharges rate remained at 1.1% in December and November, marginally below 1.3% in February 2020. Private sector layoffs grew 4.3% (7.8% y/y) following a 7.3% November decrease.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

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- Job openings down 5.6% (-12.9% y/y) to 6.542 mil., third straight m/m decline.
- Hiring up 3.4% (-1.5% y/y) to 5.293 mil., first m/m increase since September.
- Separations rise to a three-month high; quits reach a six-month high; layoffs rebound.

U.S. JOLTS: Openings Drop to Lowest Level Since Sept. ’20; Hiring Rebounds in December

Sandy Batten

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Initial claims for unemployment insurance jumped 22,000 to 231,000 in the week ended January 31 following an unrevised 209,000 in the prior week. The four-week average rose to 212,250 from 206,250. The Action Economics Forecast Survey looked for 213,000 claims to have been filed. Winter Storm Fern and the accompanying very cold temperatures could have provided a temporary boost. Historically speaking, claims remain at low levels.

The total number of unemployment insurance beneficiaries—also known as “continuing claims”—increased by 25,000 to 1.844 million in the week ending January 24, from a downwardly revised 1.819 million in the prior week (previously 1.827 million). The insured unemployment rate remained at 1.2% in the week of January 24, unchanged from the previous eight weeks.

The insured unemployment rate varied greatly across individual states and territories. In the week ending January 17, the highest unemployment rates were in Rhode Island (2.83%), New Jersey (2.77%), Massachusetts (2.67%), Washington (2.54%), and Minnesota (2.45%). The lowest rates were in Florida (0.30%), North Carolina (0.42%), Louisiana (0.43%), Alabama (0.46%), and Arkansas (0.47). Rates in other notable states include Illinois (2.15%), California, (2.08%), New York (2.02%), Pennsylvania (1.91%), and Texas (1.09%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986.

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- New claims jumped 22,000 to 231,000, the highest level since December 6.
- Continuing claims rose to 1.844 million from 1.819 million.

U.S. Initial Unemployment Claims Surged in Latest Week

Robert Brusca

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German real orders in December adjusted for inflation rose strongly again, gaining 7.8% month-to-month after rising 5.7% month-to-month in November. Foreign orders were up by 5.6% in December compared to 5.2% in November. Domestic orders surged by 10.7% in December after rising 6.4% in November and 10% in October.

**Real sales**
Real sales were mixed in December with overall sales falling 1.4% month-to-month mostly on weakness in capital goods sales.

**Broad categorical acceleration**
Many flows are accelerating this month. Sequential growth rates show acceleration. Total real orders accelerate from a year ago, to the current year, to six-months, and to three-months. Sales growth rates for consumer goods, consumer nondurables, and intermediate goods all show accelerations in gear. The exceptions are foreign orders that are not as strong over six months compared to their 12-month growth. And on the sales side, consumer durables sales and capital goods sales are weak.

**Quarter-to-quarter**
Quarterly annualized growth is complete for Q4 with this report. Foreign orders are the ‘weak flow’ expanding at a 13.6% annual rate – certainly not a weak growth rate. But domestic real orders are up at an astounding 101.9% annual rate. The net impact on the total real orders growth is to lift it to a pace of 44.1%. 

**Order ranking is very strong**
The table provides two rankings: one based on the level of variables and the other based on its year-on-year growth. The rankings this month for real orders overall, foreign, and domestic orders all reside in their top 80th to 90th percentiles- extremely strong based on level or growth. Sales do not follow suit. This gives us some reason to suspect that there is some lumpiness involved in the manufacturing data as distinct from strength. That will be something to watch. Overall mining and manufacturing sales growth is essentially at its historic median at a rank of 49.8. However, capital goods, intermediate goods and manufacturing sales all have rankings at or above their medians - as high as a 61-percentile standing for capital goods.

**Industrial confidence**
Industrial confidence for Germany, France, Italy and Spain (the EU’s big-four economies) show rankings based on these survey levels that are much lower at the 11th percentile for Germany, the 42nd and 36th percentiles, for France and Italy, respectively. Spain scores better with a 61.8 percentile standing on its industrial confidence measure. 

On balance, there is now an accelerating profile that is broad in sales trends and especially strong order trends. Perhaps Europe, under the pressure to stimulate its miliary capabilities, has a core of demand to help drive output ahead more consistently. This is something to watch in the coming months.

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Germany

German Orders Gain Pace- Clear Uptrend

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The U.S. ISM Services PMI held at 53.8 in January and December following ISM’s latest seasonal adjustments, slightly up from 52.4 in November, according to today’s report by the Institute for Supply Management, indicating expansion in the services sector for the 19th consecutive month. The January index was above 52.6 in January 2025 and a low of 49.4 in June 2024 but below a high of 55.5 in October 2024 and a record-high 67.5 in November 2021. The 12-month average was 51.8, pointing to continued growth in the U.S. services sector. The Action Economics Forecast Survey had expected 53.6 for January.

Haver Analytics constructs a composite index combining the services index and the manufacturing reading. This index increased to 53.7 in January from 53.1 in December and 51.9 in November, signaling expansion for the eighth straight month and at the fastest pace since October 2024. The latest figure was above 52.3 in January 2025 and a low of 49.3 in June 2024, while remaining below a record-high 66.7 in November 2021. These series date back to July 1997.

In the latest services survey, the business activity index advanced to 57.4 in January after increasing to 55.2 in December, indicating continued expansion in business activity for 19 straight months and at the fastest pace since October 2024. The index was up from a low of 50.0 in June 2024 but below a record-high 70.9 in November 2021. An increased 25.4% of respondents (NSA) reported higher activity in January while a reduced 17.7% reported an activity decline. The new orders index fell to 53.1 in January after rising to 56.5 in December, reflecting expansion in new orders for the eighth straight month. The index was above its recent low of 47.2 in May 2025 but below a high of 61.0 in February 2023 and a record-high 69.2 in October 2021. An increased 22.5% of respondents (NSA) reported higher new orders in January while 20.5% reported declines. Meanwhile, the supplier deliveries index (NSA) increased to 54.2 in January from 51.8 in December, indicating slower supplier delivery performance for the 14th straight month after one month in faster territory in November 2024.

On the labor front, the employment index fell to 50.3 in January after rising to 51.7 in December, showing employment activity in the services sector expanded for the second consecutive month, albeit at a slightly slower pace. The latest reading was above a low of 43.5 in December 2023 but below a high of 54.1 in June 2023 and a high of 58.9 in April 2021. In January, 13.8% of respondents (NSA) indicated higher employment while 16.2% reported declines.

On the inflation front, the prices index rose to 66.6 in January from 65.1 in December, indicating prices paid by services organizations for materials and services had risen (i.e., above 50) since June 2017. The index was above a low of 53.9 in March 2024 and a low of 55.1 in June 2023 but significantly below a record-high 83.7 in March 2022. An increased 33.4% of respondents (NSA) reported higher prices in January while only 2.0% reported price declines.

Additionally, the new export orders index dropped to 45.0 in January after rising to 54.2 in December, showing new export orders contracted for the sixth time in seven months and at the lowest level since March 2023. The imports index fell to 48.2 in January from 50.3 in December, registering the fourth contraction in five months and the lowest level since October. The inventories index decreased to 45.1 in January from 54.2 in December, indicating inventories contracted after expanding in December and November. The inventory sentiment index edged up to 54.3 in January from 54.1 in December, showing continued expansion since May 2023. The backlog of orders index increased to 44.0 in January after falling to 42.6 in December, marking the 11th straight month of contraction. These series are not seasonally adjusted and not included in the ISM Services PMI total.

The ISM Services PMI is a composite index consisting of four equally weighted diffusion indexes: Business Activity, New Orders, Employment, and Supplier Deliveries. A reading above 50 indicates expansion in the services sector; below 50 suggests contraction. Supplier Deliveries is the only ISM index that is inversed; a reading above 50 indicates slower deliveries. The ISM figures are available in Haver's **USECON** database, with additional detail in the **SURVEYS** database. The expectations figure from Action Economics is in the **AS1REPNA** database.

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- ISM Services PMI 53.8 in Jan. & Dec., above expectations and the 12-month avg. of 51.8.
- Business Activity (57.4, 19th straight month of expansion), New Orders (53.1, eighth consecutive month of expansion), Employment (50.3, second successive month of expansion), and Supplier Deliveries (54.2 vs. 51.8).
- Prices Index (66.6) shows prices rising since June ’17, the fastest pace in three mths.

U.S. ISM Services PMI Holds Steady in January; 19 Straight Months of Expansion

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U.S. nonfarm private sector payrolls rose 22,000 (0.2% y/y) in January following a downwardly revised 37,000 increase in December (previously 41,000) and a 74,000 gain in November, according to the ADP National Employment Report. The three-month average change was +44,000 in January, the same as in December. For all of 2025, the average monthly gain was 33,000. The Action Economics Forecast Survey expected a 45,000 increase in January.

The overall monthly gain continued to be driven by service-producing industries. Goods-producing firms added only 1,000 jobs in January. However, this was the first monthly increase since last April. Manufacturing employment fell 8,000 while construction employment rose 9,000, its first monthly gain in six months. It does not appear that the Trump Administration tariff increases have yet generated a rebound in the manufacturing sector. Service-producing employment increased 21,000 in January, the smallest monthly gain in seven months. Gains were concentrated in health and education services with a 74,000 increase in jobs, the largest monthly gain since last May. By contrast, professional and business services lost 57,000 jobs in January.

Employment in very small firms (1-19 employees) continued to support overall job growth with a 30,000 rise in January, the seventh consecutive monthly gain. By contrast, employment in firms with 20-49 employees fell 30,000 in January, the fifth consecutive monthly decline. Employment at medium sized firms (50-499 employees) gained 41,000 in January, its largest monthly gain since December 2024. Employment at firms with 500 or more employees fell 18,000 in January, the first monthly decline since May 2025.

Wage growth for job changers slowed to 6.4% y/y in January from 6.6% in December. The pace of job-changer wage growth has generally been relatively steady over the past year or so but has slowed slightly over the past five months. Wage growth for job stayers edged up to 4.5% y/y in January from 4.4% in December. This growth has fluctuated between 4.4% and 4.5% for the past 10 months.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

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- Total private employment rose a less-than-expected 22,000 in January.
- Goods-producing industries added only 1,000 jobs while service-producing industries produced 21,000 jobs.
- A 74,000 surge in education and health services jobs more than accounted for the overall January gain.
- Manufacturing lost 8,000 jobs. Manufacturing has lost jobs in every month since March 2024.

U.S. ADP Private Employment Edged Up in January

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Composite PMIs for January show fewer reporters weakening in January compared to December with only about 40% of the reporters getting weaker month-to-month. The sequential data weakening versus strengthening shows that over 12 months 43.5% of reporters weakened, over six months 26.1% weakened, while over three months 43.5% weakened indicating that over this period, and - in recent months as well - the broad sequential periods are showing improvement as the underlying trend for global composite activity.

In January, 5 of 25 reporters had PMIs below a diffusion reading of 50, indicating contraction, compared to none in December and two in November. Over three, six and 12 months, the number of outright contractions varies between 2 and 4 based on average data. The percentile standing for ranked data over the period back to January 2022 shows a 61.7 percentile standing for the average of all of them, and a 61.9 percentile standing for the pooled data median. There is a stronger 85.7 percentile queue standing for an average of the United States, the United Kingdom, and the European Monetary Union where conditions have been firming although slowly..

The queue percentile standings across these 25 reporters’ composite indexes show that nine of them have rankings below their medians on data back to January 2022. Among all 25 reporters, only in France has 12-month, 6-month and 3-month average PMI readings below 50 in each of those time segments. France also has readings below 50 for its composite diffusion in two of the last three months.

When we look at rankings over a period, we also are interested in knowing what the performance has been over that span where we're creating these rankings. On these data back to 2022, only 6 reporters have average readings below 50, indicating persistent contraction. For the composite that's below 50, those reporters are Germany, France, Zambia, Ghana, Egypt, and Kenya. Only Egypt at 48.9 has an average reading below 49. Clearly the sense of contraction across this set of countries is small, moderate, and short-lived. At the other end of the spectrum, there are readings of 55 or greater for Sweden, India, Saudi Arabia, and the UAE; Singapore logs a reading at 54.4 for diffusion value.

The average and median data show that the readings have very gradually been drifting higher; however it's definitely a very gradual phenomenon. Looking at smoothed data, 12-month averages show 10 countries with readings below their respective 12-month averages of 12-months ago. However, only six of these show a reading that's one diffusion point or more weaker than it was one year ago. The biggest step back is from Brazil with a 4.5-point step back; the next biggest is Russia with a 2.1-point step back and Russian of course is engaged in war. There is a step back of about one point reported by Spain, the U.K., the UAE, Singapore, and Qatar. On the same metric, step ups of two points or more include Germany, Sweden, Zambia, and Nigeria with step ups of one point or more in Kenya, Australia, Ireland, and the U.S.

Over the whole 4-year period, the average country was in contraction for 14 months, a bit more than one year, accounting for 28.6% of the time. Over the last 2 years, the average country was in a state of contraction for 5.2 months or 21% of the time. Over the last year, the average country was in contraction 2.2 months or 18% of the time. The time spent under contraction has steadily fallen across the group. Over four years, three countries dominate the contraction with France, Egypt, and Kenya in contraction more than half the time (Egypt 89% of the time; France 71% of the time). Over 2 years, only Egypt and France were contracting more than half the time (Egypt 79% of the time; France 91% of the time). In the past one year, five countries are in a contractive state more that 50% of the time (France<91%>, Egypt<75%,> Brazil<75%>, Russia<50%> and Hong Kong<50%>). France and Egypt have serious structural issues. Only Saudi Arabia and the UAE have experienced no contractions over these periods (Ireland comes close, Singapore comes close, too). The top three countries dominate the contraction profile; that is France, Egypt, and a roving member, accounting for 29% of the contractions over four years, 40% over two years and 53% over the last year. These are countries with structural issues.

On balance, the composite PMI data are improving. On the chart the uptrend is visible, a definite tendency. These metrics are moving higher, but they are crawling at a very slow pace. It's encouraging that this improvement is also occurring in an environment in which inflation is improving or holding stable.

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S&P Composite PMIs Creep Higher

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I have offered the table (below) as a presentation of French inflation statistics that is ‘too early’ largely because the report comes with a headline and without supporting detail. But the headline is too intriguing to wait for the details to emerge. To try to bridge that gap, I present the French detailed data for the CPI with the trends calculated based on a one-month lag. I also supplement that with the current report from Germany where the topical HICP reading for January is available, as it is for France. But Germany has also issued its domestic CPI data with detail. So, I present the domestic CPI trends without lag for Germany as a way to gain some better understanding about what's going on with inflation in the euro area and to gain perspective on France.

**French-German comparisons; French results**
Of course, Germany is not France. We can't simply assume that the trends that we're seeing in Germany in January will translate through to France. But what we can do is notice what similarity/difference is there and point out that the sharp lowering of inflation in France is a French phenomenon and not a phenomenon that is shared by Germany. Therefore, the trend is not likely broadly applicable to the European Monetary Union.  French inflation is running at only 0.4% over 12 months (!), annual rates of 0.2% over six months and three months; these are exceptionally low rates of inflation.  In January, the French HICP index fell month-to-month by 0.1%.

**German trends**
The German behavior is not really similar to this with the HICP at 2.1% over 12 months and then rising to annual rates of 2.8% over three months and six months, substantially similar to the sorts of numbers reported for headline inflation in the United States. The German domestic CPI reports slightly improving trends with annual inflation at 2.1%, six-month inflation at 2.1% at an annual rate, and at 1.6% over three months, inflation is tucked inside of the ECB 2% target over three months. The German CPI excluding energy - the early proxy that we have for the core rate - is at 2.4% over 12 months, 2.5% over six months and then drops to 2% annualized over three months. The month-to-month German data have been well behaved but not as weak as the monthly inflation numbers for the HICP headline monthly in France.

**Different inflation in France and Germany; but a similar trend?**
So we have two bits of evidence here: one is that French inflation has really been behaving and it's quite weak. The other is that while German inflation is running at a higher pace and generally above the ECB target, there are also signs that German inflation is starting to come down over more recent periods.

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**An unusual macroeconomic event… in progress**
These observations, in some sense, clash with the early PMI data that show widespread improving breadth in January across global manufacturing PMI reporters. Manufacturing is showing signs of firming while the inflation picture is showing signs of coming under control at least in the European Monetary Area. While we tend to think of growth and inflation as going hand-in-hand, that is of inflation as being pro-cyclical, that's not a rule, and we see a departure from that usual pattern in these unfolding data. Will they continue to unfold that way?

**What do you believe?**
All of this raises questions as to whether the inflation portion is real, whether the manufacturing growth portion is real, or whether they are both real and that monetary policy has been able to, because of its careful implementation, support growth and help to bring inflation lower at the same time.

**Conventional trend unfolding in the U.S.**
These are intriguing questions and we're going to continue to ask them and watch trends in the months ahead. The U.S., early in the year, has reported out a very strong manufacturing ISM value that also has shown some pressure in its pricing gauge, a more conventional hint that growth is picking up and inflation might be picking up along with it.

**The tariff stick**
Of course, there's a lot to consider here, a lot of irons are in the fire, a lot of contrary policies being run. There is a big change in U.S. tariff policy with the U.S. using the big stick and geopolitical relationships are resetting as well, with the two effects having some interaction with one another creating some difficulty for analysis.

**Growth warming up in the U.S., and a new Fed chair… in waiting**
U.S. economy is showing signs of some significant pickup in growth in a recent ISM report on manufacturing. Inflation, that has not showed much tendency to decline recently, continues to run over the top of the Fed's target; however, there's been a new Federal Reserve Chairman nominated and there's a great deal of talk and discussion in the U.S. about what that means. What will he bring to the table? Everyone knows full-well that the President has been looking to get interest rates reduced! Nonetheless he has promoted for Federal Reserve chairmanship a former FOMC member with the known voting record who has tended to lean to the hawkish side of policy. This is a person who also supports shrinking the Fed’s balance sheet. As a result of these contrary pieces of analysis, there's a good deal of uncertainty in the U.S. about what the nomination of the new Fed chair, Kevin Warsh, is going to mean for policy. Once he has been approved, and Mr. Powell has departed in May, what then? It is indeed starting out to be an interesting year. Interesting trends and interesting unanswered questions.

Europe

Inflation Tamed in France’s ‘Too-Early’ January Inflation Report

Michael J. Moran

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The Employment Cost Index rose at an annual rate of 3.0% in the final three months of 2025 (0.7% not annualized). The latest observation reinforced the deceleration that began in the latter part of 2022 and returned the change to the range in place before the pandemic - albeit the upper portion of that range.

Most of the deceleration occurred in the goods-producing sector, where the latest increase of 2.5% (annual rate) trailed the average of 3.9% in the prior three quarters. The service sector saw compensation growth of 3.1%, down from an average of 3.5% in the prior three quarters. The difference between the performances of goods and service is not surprising, as compensation growth in the goods-producing sector tends to be more volatile, and it has typically been softer in the past few years.

Fed Chair Jerome Powell has argued recently that labor costs are not a driving force behind above-target inflation, and recent results on the employment cost index support this view. While the increase in compensation of 3.0% in Q4 is a percentage point above the Fed’s target, businesses can maintain profits without passing along the full extent of the increase. Productivity growth, which has been strong recently (average growth of 2.3% in the past eight quarters), can effectively offset compensation growth and dampen the inflation impulse.

The chart on the upper right shows quarterly growth in total compensation less the 8-quarter increase in productivity (the 8-quarter average smooths the high degree of volatility in productivity growth). This metric, which gives insight into the likely path of inflation, has been below 2.0% for the past 6 quarters, with the latest increase totaling less than 1.0%. (the chart ends in 2025-Q3 because productivity statistics for Q4 are not available).

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Total compensation in the ECI includes both wages and benefits. In the third quarter, both components rose by the same amount (0.7% quarter-to-quarter, or 3.0% at an annual rate). This balance is a shift from the pattern of recent years, when wages typically posted firmer growth. The advantage to wages in the past few years, in turn, represents a break from the more common tendency for benefits to grow at a faster pace.

The employment cost index measures the change in the cost of labor, free from the influence of employment shifts across occupations and industries. It is provided by the Bureau of Labor Statistics and is available in Haver’s **USECON** database. Consensus estimates from the Action Economics Forecast Survey are in Haver’s **AS1REPNA** database.

- Vigorous growth during the pandemic-related recovery gives way to moderate advances recently.
- Labor costs seem in line with the Fed’s inflation target.

Employment Cost Index: Continued Deceleration

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