Daily Economic Briefing: February 8, 2010
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Global data summary
• The US payroll report appears to have had a calming influence on markets. Although the 20K payroll job loss was
near consensus, the details of the report were positive, including the increasingly solid trend in the growth of hours
worked and labor income. Equally important, the likely precursors of hiring, including a rising workweek and the use of
temps, are flashing green. The accompanying chart shows that the growth of hours worked recently has broken with the
jobless recoveries of 1992 and 2002, and is tracking more closely in line with the robust employment and GDP recoveries
of 1975 and 1983. This week we will learn a bit more about state of the US labor market via tomorrow’s JOLTS survey and
Thursday’s jobless claims report.
• Japan’s Cabinet Office reported that its proxy for NIPA-based real consumer spending rose 0.6%m/m, underscoring
the importance of using this index to track consumer spending rather than the index of household expenditures or retail
sales. The consumption proxy rose 2.5% for 4Q as a whole, the same as 3Q, and higher than we had assumed (1.5%). More
generally, it is noteworthy that Japanese consumption growth has grown at a reasonably strong pace over the past 3
quarters, above that of the US and especially Europe (see page 2). That said, Japanese consumption fell much harder in
2008 for reasons that we do not fully understand.
• Japan’s Economy Watchers survey continued to rebound in January, similar to the other business surveys. Our
Japan team has said that a recovery in the business surveys is necessary to confirm their view that the expansion is
being maintained. Sentiment was hit hard in late 2009, and our team attributed this in part to the tightening in
financial market conditions (soaring yen, falling stock maket). Domestic financial conditions improved sharply in
December and early January, although they have given back some ground since.
• Taiwan reported a booming 12.7%m/m increase in exports in January, which is likely to be a precursor to last
month’s performance across much of EM Asia. The outsized gain reflects a combination of good underlying momentum in
external demand and the front-loading of activity ahead of the February Lunar New Year holidays (which occur next week)
Taiwan’s data feature an impressive broadening in the growth of exports by destination from China and other Asia to the
US and Europe.
ENDS