U.S. PPI declined more than expectation...Disinflationary pressure persists?

The overall Final Demand Producer Price Index fell 0.4% during October (-1.6% y/y) following an unrevised 0.5% September decline. The economists expected a 0.2% increase.

Producer Price Index (SA, %)	Oct	Sep	Aug	Y/Y	2014	2013	2012
Final Demand	-0.4	-0.5	0.0	-1.6	1.6	1.3	1.9
Excluding Food & Energy	-0.3	-0.3	0.3	0.1	1.7	1.5	1.9
Goods	-0.4	-1.2	-0.6	-4.8	1.3	0.8	1.7
Foods	-0.8	-0.8	0.3	-4.2	3.2	1.7	3.0
Energy	0.0	-5.9	-3.3	-21.5	-1.0	-0.8	0.2
Goods Excluding Food & Energy	-0.3	0.0	-0.2	-0.1	1.5	1.1	1.8
Services	-0.3	-0.4	0.4	0.1	1.8	1.6	1.9
Construction	1.0	0.0	-0.1	2.3	3.0	1.8	2.9
Intermediate Demand - Processed Goods	-0.4	-1.5

While foods price declined faster, ex-foods price declined 0.3% from previous month as well. Disinflationary pressure seems to persist during current period.

But, consumption demand is increasing and expected to continue further as labor market conditions and wage improve recently. Although PPI tends to lead CPI with lagging for some months, under this improving environment, we should wait inflation data for coming months...

China Credit October : Lower than expectation, but Not Disappointed

In China, in October,

1) M2 growth accelerated to 13.5% y/y from 13.1%, outstripping PBOC’s target of 12%.

2) But, new loans halved to RMB 513.6bn from RMB 1.05tn in September, but it's because of seasonal effect mainly and were up 10.3% y/y.

3) And TSF slumped to RMB 476.7bn from RMB 1.3tn partly on the contraction of shadow banking.

Via BNP Paribas,

In October, both new loans and TSF were markedly below expectations, but M2 growth quickened to 13.5% y/y. We believe the disconnection was partly attributable to the fact that TSF now underestimates actual credit supply because local government bond issue is excluded from the tally. Current money and credit condition is accommodative for economic growth and interest rates have fallen materially. The reason that loose monetary policy has not shown effect to revive growth, in our view, is because fiscal policy is not expansionary enough. In economic downturns, government is needed to increase debt and leverage to provide cushions. And this is the cost the policymakers have to pay to stabilize growth in the short run.

U.S. Corp. Bond : Negative on Kinder Morgan Inc. (KMI)

C/S downgraded their investment view of Kinder Morgan Inc. from positive to negative early this week. They seemed to disappoint KMI's business management.

They downgraded because of;

1) CO2 business - less profitable industries and burden of capex as a long history issue...
2) Unreasonable dividend growth promises - considering capex and expected EBITA
3) Management's handling of the recent preferred offering - paying expensive...

C/S recommends EEP or ETP rather than KMI on a valuation side.

Equity price of KMI tumbled almost 50% from its highest level...

while corporate bond spread has widened somewhat faster...

Should I sell the KMI bond?
Cash flow in KMI seems somewhat firm... Above threats does not appear to be critical event for KMI's capability for payment...

U.K. Labor Market Report : Firm, not Weak

U.K. unemployment rate dropped to 5.3% in September slightly from previous month's 5.4%.
Average weekly earnings growth remained unchanged from August at 3.0% 3m/y as bonuses picked up in line with the consensus.

While Barclays Capital argues this labor market indices show signs of weakness with disappointed wage growth considering bonuses as a temporary factor, in below charts, overall conditions looks very firm for U.K. economy.

Long USD/KRW seems more attractive than Short EUR/USD

Time to long USD against KRW rather than short EUR... maybe tomorrow...T-T

Possible Treats for U.S. Banks due to TLAC? and How about Europe Banks?

Via, C/S in 1st November,

The Federal Reserve released the long awaited proposals on Total Loss Absorbing Capacity (TLAC). TLAC sets the bail-in debt requirements for systemically important banks and removes the last major regulatory overhang/uncertainty for the sector.

U.S. TLAC is not as stringent as it could have been, both in terms of the requirements and the compliance period. The U.S. proposal is largely consistent with the FSB's latest guidelines, and is not gold plated for U.S. banks. A key addition is a long-term debt requirement.

Our estimated TLAC shortfall for the entire sector is $87 bn, which is ~$33 bn less than the Fed's forecast. Our estimate includes anticipated RWA/leverage reductions, progress made by banks in 3Q15, and further increases in common and preferred stock issuances for regulatory capital purposes. The new, lower shortfall estimate significantly reduces concerns around a supply wall and should be positive for credit spreads.

Wells Fargo has the biggest shortfall at $46 bn. JPMorgan ($19 bn), Citi ($14 bn), Bank of America ($6 bn), and State Street ($2 bn) all have more manageable shortfalls that could be met within a year if desired. Bank of New York, Goldman Sachs and Morgan Stanley all have surpluses.

The U.S. proposal includes a separate long-term debt requirement in addition to TLAC. TLAC consist of Common Equity Tier 1, preferred stock and qualifying long-term debt. To meet TLAC and debt requirements, securities must be issued out of the parent-level, unsecured, be plain vanilla, have a remaining maturity of more than 1 year, and governed by U.S. law. OpCo subordinated debt will not qualify as TLAC. HoldCo's are restricted from issuing short-term liabilities and entering into derivative contracts with third parties. 

Our main concern is a provision to significantly increase the capital cost for holding TLAC-eligible bank bonds, including in trading desks. This provision could further reduce market liquidity and increase the volatility of credit spreads during periods of market stress. Although regulators aim to reduce contagion risk, it could have a negative impact on financial stability. In our view, a 5-day market making holding period exemption is inadequate.

The TLAC Requirements

U.S. GSIBs face two TLAC requirements: 1) a long-term debt requirement that must be fulfilled entirely using unsecured long-term HoldCo debt, and 2) a TLAC requirement that could be met with Tier 1 capital and/or unsecured long-term HoldCo debt. Under the proposed rules, the long-term debt requirement is defined as the higher of a) 6% of RWAs plus the bank's U.S. GSIB buffer, and b) 4.5% of its leverage exposure, which is the denominator of the Basel III supplementary leverage ratio (SLR). The eight U.S. GSIB capital buffers range from 1% to 4% of RWAs. In other words, the RWA-based long-term debt requirement ranges from 7 – 10% (of RWAs) depending on each bank's systemic importance, while the leverage-based requirement is a flat 4.5% (of leverage exposure). We note that the U.S. GSIBs are required to conform to this long-term debt requirement by January 2019.

cf> How about Europe Banks?

Return of worries about peripheries, PIGS, in Euro zone?

Fears about breaking Euro zone appear to come back again with PIGS' events.
They see this would be another headwind for not only FED's fund rate hike, but global financial markets' stability. Is it real risks?

1. What's next for Portugal?

via Barclays Capital,

The minority conservative government led by Prime Minister Pedro Passos Coelho was ousted yesterday after the parliament rejected his government’s programme by a vote of 123 to 107. Portuguese President Anibal Cavaco Silva, who asked Mr Passos Coelho to remain in office after the 4 October parliamentary election, now faces the choice of either asking Mr Passos Coelho to stay on and head a caretaker government until new elections can be held (by May-June 2016) or, more likely in our view, to ask the leader of the Socialist Party, Antonio Costa, to form an alternative government. Mr Costa has already signaled that he has the support of radical-left parties, the Communist Party and the Left Bloc. Together, these parties have an absolute majority of MPs in parliament. 

The elevated costs of political and policy uncertainty 

Political uncertainty is having already significant costs. Portugal 10y sovereign spreads have increased to over 215bp versus Bunds and more than 90bp versus 10y Spanish Bonos. The political uncertainty takes place against a background of still elevated private and public debt. Public debt stands at c.125% of GDP, and it continues to be rated below investment grade by three of the major credit rating agencies.Key to where Portugal’s funding costs and future ratings are heading will be the macroeconomic policies of the new government. A fundamental difference of the Socialist Party and its allies has been their proposal of less austerity. While Mr Costa has expressed his full commitment to take Portugal out of the Excessive Deficit Procedure as soon as possible by reducing the public deficit below 3% of GDP, it is not yet clear how this target squares with his proposals (and his allies’): to roll back some of the public sector wage cuts, unfreeze of pensions, reverse some privatizations (including the transport systems of Lisbon and Oporto), and cut the VAT on some goods and services. At the same time, the parties have pledged to boost public investment. In sum, the markets await the content of the economic and fiscal plans of the new government in order to assess whether they square with its overall fiscal objectives. 

Will markets settle after the appointment of the Socialist Party?  

Even if the Socialist Party is appointed to form a government (as we expect), we do not think that the Communist Party or the Left Bloc will enter Mr Costa’s cabinet in a full-fledged coalition. The support of these radical-left parties is likely to be on an “as need” basis and will depend on how close the Socialist’s proposals are aligned with their own parties’ agendas. These parties have already dropped some of their previous, more radical proposals, including a euro area exit and an upfront restructuring of Portugal’s public debt. However, we remain concerned about the strength of the alliance between these parties, given the traditional moderation of the Socialist Party and the much more radical stance of the other two. Minority governments in Portugal tend not to last their full term, and we do not rule out the possibility that Portugal may need to hold elections again within a year. Political uncertainty is likely to continue to weigh on Portugal’s funding costs, despite the very accommodative monetary policy of the ECB (Portuguese debt is part of ECB's PSPP programme) and the more benign macroeconomic conditions in Portugal and the euro area. 

This issue lead EUR to be broken the level of 1.07 against USD temporarily and bond yields in both core and peripheral countries in Euro zone to decline yesterday.

Uncertainty comes again? Yes, but it seems to continue for longer period unlikely.

1) Portugal's maybe new government already saw Syriza in Greece. 2) Aggressive policies could put the Portugal's status to the whole as funding costs arise with possible exception from PSPP programme. 3) They already confirmed they did not want the exit from Euro area.

Indeed, fiscal austerity maybe was very hard for people in Portugal. But, they are one of success case for recovery. So, new government should keep previous steps of fiscal policies in a big picture.

Volatility from uncertainty? Only for a while.

2. Spain, Catalonia lawmakers approved the process of breaking from Spain

Many starts worry about Spain as well. The consequence in Portugal could impact on Spain, they argue. 

Indeed, this is more likely scenario of uncertainty than Portugal issue. But, Catalonia faces headwind of the intervention by Constitutional Court....

Additionally, in 12th Nov., Fitch downgraded Catalonia's grade from BBB- to BB with negative watch. It may be not easy to conduct breaking for Catalonia...

3. Italy, Capital flights since Aug. last year, is the main reason for possible further monetary easing?

Someone cites money outflow from peripheral countries especially Italy to Germany in Target 2 to restart since late last year despite start of asset purchases, QE, is the main reason for possible expansion of QE or rate cut further for ECB.

In other words, rising imbalances is a threat for Euro area and caused dovish stance of ECB.

Mr.Eric Dor said in Mish's blog, (I correct some words thought as error)

Italy has a relatively stable current account surplus, increasing Target2 liabilities reflect a surge of financial outflows in the balance of payments.

It is therefore useful to examine the balance of payments of Italy to find out the exact cause of the recent surge of the Target2 liabilities of the Bank of Italia. Data of the balance of Payments have been published until August 2015. Over the 12 months from September 2014 to August 2015, the target2 liabilities of the Bank of Italia have been consistently increasing. It is therefore useful to compute the cumulated flows of the balance of payments of the country over this period.

Over this 12 months period domestic investors have bought foreign securities for an amount of €149 billion! This huge acquisition of portfolio investment foreign assets that was such a large financial outflow that it exceeded the net inflows of the current account surplus, the capital account surplus, and many other items of the financial account.
Huge financial outflows to buy foreign securities are thus the explanation of the recent increase of the liabilities of the bank of Italia to the Eurosystem. This observation can be confirmed by examining the flows of the balance of payments over the 12 months period from August 2013 to July 2014, during which the target2 liabilities of the bank of Italia consistently decreased.

When domestic investors sell government bonds, the proceeds increase their deposits on their bank accounts. In counterpart the reserves of domestic banks increase on the liability side of the balance sheet of the local central bank. 

It is thus clear that Italian investors, having sold Italian bonds to the Bank of Italia, partially used the money they received to purchase foreign bonds. But it only accounts for part of the huge purchases of foreign securities by Italian investors since August 2014. The increase of net purchases of foreign securities by domestic investors started well before the beginning of the implementation of the QE policy.

It is interesting to observe that the Eurosystem has recently purchased government bonds issued by Italy to other domestic investors than the banks of the country, in the context of the QE. Indeed Italian banks have increased their holdings of national government bonds during the period starting from August 2014. Banks keep their government bonds because they are useful collateral to obtain funding from the Eurosystem if needed, and because of regulation incentives.

 

Is it capital outflow? Maybe not. It seems that main purpose of QE is not to boost private credit through banking system, but to spur asset prices using private investment sector.

I think, in short, recent decline in net Target 2 balance of main peripheral countries in Euro area is not the threat for Euro system and economy. And expected additional monetary easing including possible expansion for QE may aim at robust asset price. This is maybe why a possibility that ECB could buy municipal bonds in asset purchase program referred yesterday.

So, this not signals risk aversion, but appetite...!


4. In Greece,

The negotiation for separate aid of bail out restarts... never problem...

French and Italian I.P. moderately increased contrary to German

In France and Italy, the second and third largest economy in Euro area respectively, industrial productions in September increased moderately from previous month in contrast of German data.

It signals economic recovery in Euro area keeps going on with slower pace despite disappointed German factory activities.

Low U.S. Imports Price weigh on Expectation of Short-term inflation, But Longer-run could be Different

Import/Export Prices (NSA, %)	Oct	Sep	Aug	Oct Y/Y	2014	2013	2012
Imports - All Commodities	-0.5	-0.6	-1.8	-10.5	-1.1	-1.1	0.3
Petroleum	-2.1	-6.0	-13.6	-48.0	-5.6	-2.6	-0.3
Nonpetroleum	-0.4	-0.2	-0.4	-3.4	0.1	-0.6	0.3
Exports - All Commodities	-0.2	-0.6	-1.4	-6.7	-0.5	-0.4	0.4
Agricultural	-0.1	-1.3	-2.5	-11.8	-2.7	1.6	2.4
Nonagricultural	-0.3	-0.5	-1.3	-6.1	-0.3	-0.7	0.1

U.S. sales at wholesale rose faster as well as inventories

Inventory/sales ratio is still high, but sales growth appears somewhat solid.
Somewhat robust wholesale indicators signal upward potential for 3Q GDP in U.S.

Inventories at the wholesale level rose 0.5% during September (4.5% y/y) following a 0.3% August increase. The rise was paced by a 1.3% jump (8.4% y/y) in furniture and a 0.5% rise (12.8% y/y) in automotive inventories.

Nondurable goods inventories increased 1.9% (7.5% y/y). The gain reflected a 2.3% rise (14.4% y/y) in apparel but petroleum inventories eased 0.6% (-18.2% y/y).

Sales in the wholesale sector improved 0.5% (-3.6% y/y) after two months of decline. Motor vehicle sales jumped 2.3% (5.9% y/y) though furniture purchases were off 2.7% (+4.6% y/y). Machinery equipment sales improved 0.2% (-3.6% y/y).

Nondurable goods sales increased 0.3% (-6.1% y/y) as apparel sales gained 1.9% (6.3% y/y).

The inventory to sales ratio held steady at 1.31.

Wholesale Sector - NAICS Classification (%)	Sep	Aug	Jul	Y/Y	2014	2013	2012
Inventories	0.5	0.3	-0.3	4.5	6.7	4.1	6.6
Sales	0.5	-0.9	-0.3	-3.6	4.3	3.0	6.2
I/S Ratio	1.31	1.31	1.30	1.20 (Sep. '14)	1.20	1.18	1.16

Chinese disinflation persists as food inflation dropped

The CPI inflation eased further to 1.3% y/y from 1.6% in September and 2.0% in August less than market expectation of 1.5%. This decline was by food inflation cooled to 1.9% y/y from 2.9% in previous month and dropped 1% m/m. Food inflation plunged with soared production of pork.

Non-food inflation moderated to 0.9% y/y with monthly gain of 0.1%.

PPI stayed at -5.9% y/y following previous month's.

Indeed, Chinese disinflation, not deflation, persists. Upside potential for inflationary pressure seems so weak for now. But, disappointed price index September was almost led by food inflation, the temporary factor. This is why we should not consider Chinese economy as the deflation yet.

U.S. Consumer Credit Surged as both revolving and non-revolving indicators soared

Somewhat solid growth of revolving credit signals reflatonary pressure on U.S. economy.

Consumer credit outstanding surged $28.9 billion during September following an unrevised $16.0 billion August rise. It was the largest increase rate, yoy 7.1% in postwar history. Expectations were for a $17.2 billion gain.

Separately, robust credit was led by non-revolving increased about 22 billion dollar from previous month while revolving credit grew 6.7 billion. Non-revolving is almost consist of auto-loan and borrowing of longer-period maturity. This is likely in line with spurred car sales recently.

On the other hand, revolving credit such as private credit card usage increased with pace of 4.7% from a year earlier and it's faster than previous years. Albeit this growth rate is lower than non-revolving, higher itself could signal reflation scenario in U.S. economy.

Consumer Credit Outstanding (M/M Chg, SA)	Sep	Aug	Jul	Y/Y	2014	2013	2012
Total	$28.9 bil.	$16.0 bil.	$19.5 bil.	7.1%	7.0%	6.0%	6.1%
Revolving	6.7	4.0	4.2	4.7	3.7	1.4	0.6
Nonrevolving	22.2	12.0	15.3	8.0	8.3	7.9	8.5

In France, the business sentiment starts rebounding...!

The Bank of France indicator moved up to 98.7 in October from 97.8 in September. It is still below its long-term average of 100. Nonetheless, the pick-up in this indicator has the Bank of France looking for growth of 0.4% in Q4 2015, up from a 0.2% gain estimated for Q3.

New orders of sub-index led the improvement of whole index like other developed countries' industrial sentiment index. They seem ready to expand their production activities unless another financial or economic shock comes.

New rules at banks to raise up in Debt or other securities

The plan, drawn up by the Financial Stability Board in Basel, Switzerland, is meant to ensure that the world's biggest lenders maintain sizable financial cushions that can absorb losses as a bank is failing, without threatening a crisis in the broader banking system.

Under the plan, large lenders will have until Jan. 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 Jan.2022.

For 18%, banks have to raise as much as $ 1.2 trillion...!

It means possible increase of issuance by global banks' debt, or bonds...

U.S. Employment : Why wage had hardly risen since financial crisis

Let's see employment condition in U.S. divided in ages.
Job gainers are the younger and the older only. Many of the younger would be part-timers and the older's jobs may be lower-wage jobs.

But, jobs in prime ages have increased even though it's pace has been very moderate.
And recent upward pressure for wage may signal for solid employment condition for them further.

Click to Enlarge

Tighter U.S. Swap spread and its Impact on JGBs

Via JPM, recent tighter U.S. swap spread impacts on USDJPY basis to wider to deeply negative and JPY swap spread.

These make the JGBs more attractive because both U.S. and Japanese Libor cost is cheaper and widened USDJPY basis, seen below chart, enhances hedge premium for investors delivering USD. So, JGB yields are stable with firm demands despite upward pressure in U.S. treasury yields.

JPM argues this is structural change in JGBs market, although they are neutral on the view of U.S. swap spread market.

However, as I posted previously, current tightening in swap market is mainly led by supply and demand sides mainly as corporate bond issuance increases rapidly and the dealers' positions are screwed.

Anyway, today's JGBs yield rose hardly as well...

Curious Stuffs - New Keynesian model is same as Neo-Fisherian in ZIRP?

From a paper in 2009 by Gauti Eggertsson, a staff of NY FED, a very distinguished New Keynesian economist:

Tax cuts can deepen a recession if the short-term nominal interest rate is zero, according to a standard New Keynesian business cycle model. An example of a contractionary tax cut is a reduction in taxes on wages. This tax cut deepens a recession because it increases deflationary pressures. Another example is a cut in capital taxes. This tax cut deepens a recession because it encourages people to save instead of spend at a time when more spending is needed.

Via the Money Illusion,

Elsewhere he showed that in a deep depression, the NK model suggested that artificial attempts to raise wages, such as FDR’s NIRA, could be expansionary.
Several economists have recently suggested that the NK model has NeoFisherian implications. If the Fed were to raise its fed funds target, the policy shift would be inflationary.

Eggertsson's logic is very clear.
AD curve has downward slope to the right normally because higher inflation causes tighter monetary conditions and decreased investment and personal consumption.

However, given nominal rate, for example it's zero, for a long time, households must increase to spend their money only if the inflation is expected to be robust, because it pushes real interest rate lower and makes current consumption cheaper than next. So, AD curve becomes upward slope-shaped.

On this AD curve, tax cut policy, for example, should lead the deflationary pressure, because;

1) AD curve is not affected by that. It means curve location remains. It's because households and companies only react on inflationary pressure given nominal rate for longer period.
2) AS curve moves down. It's the key. It's because more people may participate labor market for expecting more disposable income.
3) But, on the AD curve, people will face the headwind of declined "real" wage.
4) And so, the real economy will be suffered from deflationary pressure.

So, if we want to boost real economy, short-term interest rate should be raised. This should change the slope or shape of AD curve from downward to upward. (Below chart showed inverted case)

If then, the first movement of U.S. Fed would be much more significant for real economy than market participants expect...!!

If given nominal rate condition, unfortunately, fiscal policy, especially increasing government spending would be more powerful tool. Fiscal multiplier could be more than 1.0 in contrast of normal AD-AS model's lower than 1.0 caused by crowding out effect.

It's so curious and funny because this consequence is equal to Neo Fisherian's. The aspect of possible inflationary pressure even from Fed's fund rate hike or/and increasing arguments that fiscal expanding is need would be main theme next year's financial market.

And more likely, we should focus on whether the economic dynamics change from deflation to normal-inflationary environment as FED starts monetary tightening...!

U.S. Nonfarm Payroll signals upside potential for inflation as well as wage growth

U.S. October nonfarm payrolls gain 271K much more than market expectation with upside surprise at AHE, average hourly earnings. Although SEP payrolls were downward adjusted a little bit, total adjustments within previous two months increased by 12K. OCT expectation was about 180K.

This data increases the possibility of FED's rate hike in December according to many economists. Like I noted in previous posts, as nonmanufacturing PMI's employment and new orders sub index were robust, labor market in U.S. seem very solid.

Main features are below;

1) Payroll number shows U.S. labor market is not on full-employment condition yet. This means additional improvements and acceleration are possible for next year.

2) But, unemployment rate was down to 5.0% and U-6 unemployment rate declined further by 0.2%p to 9.8% which is relatively low since financial crisis. 1) and 2) maybe signal the possibility that U.S. economy starts to overcome the structural problem in labor market, even though this view could be exagerated.

3) Apparently, however, wage seems to get benefits from tailwind of labor market condition. Monthly gain of 0.4% and yearly gain of 2.5% are enough high to expect reflationary pressure over next period. Infact, YoY 2.5% is the highest level since mid 2009.

Especially with firm productivity as I noted in previous post, this may point possible inflation scenario comes somewhat quickly rather than deflation. In fact, as I commented previously, the inflation is not in line with labor maket condition. But, under current economic environment, upside potential for wage growth could signal unexpected inflationary pressure for coming months or quarters.

Right after releasing NFP data, U.S. bond market reacted to yield curve flatten especially in 5s30s which could mean longer-term economic condition maybe deteriorate as FED fund rate hike comes earlier. But, to end of daily market, 30 year yield rose almost like 5 year tenor at last. I think market, which has expected deflation scenario, starts to fear the reflatioary movement.

And there were some meaningful movements in global financial markets.

1) As I noted, U.S. yield curve was flatten a very little bit only.

2) German bund yield curve was bear steepen as 10 year yield rose by almost same with UST.

3) USD index, DXY, rose to the highst level since April this year, as EUR/USD plunged under 1.08 level.

I hold my main investment strategy in the global aggregate bond fund.

But, I change a view that EUR depreciation is in line with spread widening between UST and Bund under the expectation of monetary policies divergence.

As a member of ECB said infationary condition in Euro area improves from previous forecast, although EUR is depreciated against USD, long-end tenor yield in Euro area's gov't bond could soar. So, I have not to hedge my short Euro-area bonds position as short EUR against USD.

	OCT	SEP	AUG	YoY	2014
Payroll Employment	271	137	153	1.9%	1.9%	1.7%	1.7%
Previous	--	142	136	--	--	--	--
Manufacturing	0	-9	-19	0.5	1.4	0.8	1.7
Construction	31	12	8	3.5	4.8	3.7	2.1
Private Service Producing	241	159	146	2.5	2.2	2.2	2.2
Government	3	-12	28	0.5	0.0	-0.3	-0.8
Average Weekly Hours - Private Sector	34.5	34.5	34.6	34.6 (Oct.'14)	34.5	34.5	34.4
Private Sector Average Hourly Earnings (%)	0.4	0.0	0.4	2.5	2.1	2.1	1.9
Unemployment Rate (%)	5.0	5.1	5.1	5.7 (Oct.'14)	6.1	7.4	8.1